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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (214842)	8/9/2009 11:48:00 AM
From: ChanceIs	Read Replies (1) \| Respond to of 306849

>>>The odds that these clowns actually averted disaster are next to infinitesimal. <<< I have been saying all along that the bad loans are bad, and saying otherwise is merely applying the proverbial lipstick to the pig. One can credit the Treasury/FED for averting a panic collapse. OTOH, many, many pundits had called it long before it happened, and they could have applied the breaks long, long ago. One might give them high marks for their response since say Jan 2008, but if you step back and look at the performance from July 2005, then the assessment must be extremely negative. Really the only thing that the FED/Treasury can do is print to avoid panic and do the same to socialize the losses to prevent the collapse of the "systemically important" institutions. Of course we all know that there have been many cases of "trust" breakups which may have increased the robustness of the economy. One might start the Standard Oil. The government loves to bash oil companies because their product is so vital to the economy. Yet the same argument is made regarding the large banks, and they get coddled. A major conclusion must be that the banks own Washington. But what about oil??? I read a book about Lyndon Johnson years ago. He was near starving in Texas and wanted to make a political career. Someone arranged a "donation" (legal I believe) from an oil company. He turned it down. He knew that years later it might come to haunt his prospects. Sure he could have become a state senator, but he had more lofty goals and didn't want to be hamstrung. Incredible. (I loathed Johnson BTW.) Bottom line is that the American populace loathes oil companies. Why they have this ambivalence about banks is a mystery to me. Memo to self: Apply Rothschild's maxum: Let us accept tings as they are and profit off the folly of the world. IOW, stop torturing yourself over the morals, lack of sense and the antipathy towards oil and the ambivalence towards banks. It is the reality. Accept it (and close your bank shorts). Real estate will still crater under the weight of unemployment and oil will rise under the pressure of increasingly falling production. The FED can't print oil and give it to the oil companies the way it prints money and gives it to the banks. There is always a buck to be made somewhere. He who sits gets rolled over. Oh. The FED can save the banks, but only at the cost of inflation and/or destroying the dollar. There is a buck to be made anticipating that. We are back where we were immediately preceding the Lehman collapse. Back then, every print and stimulate action punished the dollar and long bond - as it should. The Lehman collapse brought a panic and (perceived) flight to safety by embracing the dollar and Treasuries. I believe that we are seeing that unwind. I also think that we will have aftershocks and/or ringing for quite some time. There is another wave of real estate foreclosures coming, and that will cause some more bank failures. It can be surfed effectively, especially if one learned the lessons of the last few years.