A Nation of Morons, Led by Idiots
by: Greg Newton
posted on: September 23, 2008
seekingalpha.com
Problem: Too-big-to-fail financial institutions
Solution: Bigger financial institutions ((BAC)+CFC+ML (MER)/(JPM)+BSC/BCS-(LEH) ad nauseum).
Problem: Lack of control over government spending.
Solution: Spend more, a lot more, borrow more, a lot more.
Problem: Fred and Treasury create serial bubbles, ending in tears.
Solution: Give Fred and Treasury more power.
Problem: Lack of price discovery and/or transparency in financial asset values.
Solution: Bury mortgages in government entity with neither accountability nor transparency.
Problem: Archaic and incompetently-implemented regulation creates over-levered institutions run by Jeff Skilling wannabes.
Solution: Bail out Skilling wannabes, witch-hunt the (relatively) innocent, and promise to regulate the already failed Ponzi scheme out of existence.
Wash, rinse, repeat.
There is only one thing necessary to understanding what is happening and it is this: no one at US banks, no one at the Federal Reserve and no one in politics can accept the reality that real estate assets in this country remain oversupplied, overpriced and overleveraged.
It is that simple.
TAF, TSLF, SuperSIV, TARP, none of that matters. No matter what acronym is created to disguise the fact that assets are overpriced, or what government intervention is created to prop up those asset prices, the market will inevitably overpower it. This time is not different. In fact, it is continuing to play out almost exactly as the Great Depression did... |
