The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Think4Yourself who wrote (201162)	5/8/2009 3:36:47 AM
From: NOW	of 306849

5 Steps to a Financial Recovery Step 1. Get NPR to do a story in which they interview some important guy who says the stress tests were good and transparent and that the banks are OK. Step 2. Make sure that the NPR reporter is a nice guy who interviews the financial expert guy and thanks said financial expert guy for both the interview and for helping us all know now that, because of this "transparent process", we can trust that the banking system is OK. Step 3. Hope that millions of Americans listen to the story on ALL THINGS CONSIDERED, and that they not only feel better, but now when you talk to them about the economic situation they obediently parrot back the story that they heard on the radio and tell you that all is OK because the bank stress tests were good and transparent and the banking system is OK. Step 4. Watch with glee as all of the millions of Americans now feel more confident, and revel in joyful delight as they start to look for new loans for cars and homes and trips to Barbados and money to send their kids to Middlebury College. Step 5. Pop a bottle of Veuve Clicquot and celebrate the end of hard times. This is how our system works. Our leaders try to create an incipient reality with lots of soothing words; assuming that, over time, such words will in fact lead individuals to act in a manner that turns the words into reality. That's how we do it in the USA. We eliminate accurate mark-to-market accounting and we conjure up silly pretend stress tests and we secretly funnel money from the federal reserve to the banking industry and we turn our heads as the banksters concoct pretend balance sheets, and then we all say "yippee!" when the banks say that all is well in moneyland again. And our leaders parade about with each other and pat each other on the back and tell all of the people that they can get back to their normal spending, happy selves. Brilliant, right? There's just one teeny weeny problem with our "fake it 'til you make it" existence. It's called... DEBT * Of our $14.3 trillion GDP in 2008, 17% represents consumer debt ($2.5 trillion). * Trillions upon trillions of dollars in current mortgage debt cannot be serviced. * The productive value of debt has slipped under $1. In other words, 1 dollar of debt no longer even produces 1 dollar's worth of productive capital. * Debt is growing faster than GDP. * Tens of trillions of dollars in toxic derivatives remain hidden from view. Those assets were NOT part of the so-called transparent stress tests. * Our government is $10 Trillion in debt. * Retirement funds are under-funded by over a TRILLION dollars. (Another form of debt) * Social Security going forward is under-funded some $50+ TRILLION. I regret to report that we have reached the point at which words and lies cannot create a bright new yummy solvent fiscal reality. It's either a deflationary depression now or sovereign default and hyperinflationary depression later. Sorry 'bout that folks. No more words necessary. ashizashiz.blogspot.com

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