Cheap Shots And Piling On

Karl Rove explains that Bush tried to rein in Fannie Mae and Freddie Mac; Matt Ygelsias explains that, since Bush never used the phrase "housing bubble", it never happened.  Not compelling!  This Times story from Sept 1999 tells us that the Clinton Administration was pressing Fannie and Freddie to offer more affordable loans - oops!

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

This old post noted efforts by Bush in both 2003 and 2005 to rein in Fannie and Freddie.  And I promised a cheap shot, so here we go - yesterday, Matt Y assured us that lefty commentators were both smarter and more pessimistic than their righty counterparts.  So let me cite this table-pounding insight from the smartest pessimist of all, Nobel-laureate Paul Krugman, writing about the parlous state of the economy in May of 2006: 

As I summarized it awhile back, we became a nation in which people make a living by selling one another houses, and they pay for the houses with money borrowed from China.

Now that game seems to be coming to an end. We're going to have to find other ways to make a living — in particular, we're going to have to start selling goods and services, not just I.O.U.'s, to the rest of the world, and/or replace imports with domestic production. And adjusting to that new way of making a living will take time.

Will we have that time? Ben Bernanke, the chairman of the Federal Reserve, contends that what's happening in the housing market is "a very orderly and moderate kind of cooling." Maybe he's right. But if he isn't, the stock market drop of the last two days will be remembered as the start of a serious economic slowdown.

Maybe the housing-led economy will all end badly, or maybe it won't!  Thanks for sharing - it's no wonder Times Select failed as a premium service. 

Comments

[Neo]

The Krugman stuff seems so ironic when Drudge has WE'LL SPEND OUR WAY OUT OF THIS just below a picture of Obama.

[fdcol63]

"We'll spend our way out of this mess ..."

By raising taxes from taxpayers, especially those filthy rich people.

When we in the government take this money away from people, it will leave less money in their pockets to spend in the economy.
And the filthy rich will take their money elsewhere and stop making those luxury purchases.

Of course, this means the economy will continue to spiral downward ....

But hey ... that's okay ... we'll just raise taxes again, and let government spend our way out of this mess.

Can anyone say "circle jerk"?

[Danube of Thought]

The Drudge headline pretty well sums it up. Does anyone else think there has been far too little discussion--just about none--concerning what, indeed, is the best way to stimulate an economy?

Krugman complained that we were getting rich by selling houses to each other. Now Obama says we're going to recover by giving some people's money to other people.

I'm not optimistic. But I guess that makes me smart...

[bad]

As I summarized it awhile back

As I've consistently said...

Krugman sounds like Obama. Blech

[MayBee]

I just can't think of another time when a President has demanded a huge spending bill from Congress, and fast.

It just doesn't seem to me a path to fiscal responsibility.

Yet I feel all hope may be lost when I see the CNN business anchor saying Obama has to be really really honest about how bad things are, so he can get what he wants.

For some reason, what he wants now seems very similar to what he wanted before the economy was so dire. Remember when the stimulus check was the answer to high gasoline prices?

[Sue]

MayBee,

I just can't think of another time when a President has demanded a huge spending bill from Congress, and fast.

It just happened with Bush. The slippery slope I warned about. What moral authority do republicans/conservatives have to say no?

[MayBee]

OK, so tell me why this kind of thing for mortgages wouldn't work:

Banks allow distressed homeowners (or homeowners in distressed areas) to write down the principal on their mortgages to come in line with market conditions.
But if the mortgage holder sells or refinances the house at a certain price, the bank gets to recoup some of it's loss.
I'm not a financial expert, obviously, so forgive my use of incorrect terms.

But people in Detroit that bought during the bubble aren't going to be able to sell their houses at their mortgage level any time soon. If they can write down they are paying the interest on, they can possible save their home ownership. The banks would take a loss on it, but not as much as if the house sits empty due to foreclosure and a bad market.
At the same time, the banks don't deserve to write down the principal only to have the homeowner make a huge profitable sale or refinancing. So they would be protected from that.

I could be suffering from lack of sleep and just babbling here.

[MayBee]

It just happened with Bush. The slippery slope I warned about. What moral authority do republicans/conservatives have to say no?

I think they just say it. You have to be able to say enough is enough.
I sometimes used to let my kids have a cookie before dinner, but I didn't let them eat the whole box of cookies instead of dinner. I had the moral authority to stop a little bit of bad behavior from becoming too much.

(JMH,I don't want to hear about my bad analogy :-) )

[matt]

the Chinese are balking at buying more U.S. treasuries, and I'm sure the Japanese are in the same boat. If they decide they have too much invested in the dollar, you're going to see another huge credit crisis, except this time the "full faith & credit" of the United States will go into free fall.

There does not seem to be any responsible fiscal plan in place anywhere yet. The politicians are muddling through, expecting everyone (citizens, financial institutions, foregn investors, governments) to buy into their version of events, even if it contradicts reality and reason.

Confidence is a funny thing. If the global financial herd decides the dollar is no longer a good haven, we are well and truly in trouble.

Throw in a couple few state bankruptcies, some more major institutions or corporations going BK, and you get the idea. It will take a world class team to sort this out, and so far, all we have are clown shoes.

[Pofarmer]

"It just doesn't seem to me a path to fiscal responsibility. "

Ya think???

Hannity has been having a ball quoting all the dingledorfs back in 2000 about how terrible it was for Bush to be talking down the economy and pointing out that we might have looming energy problems.

LOL.

Or not.

I need a drink.

[kim]

Swiss Francs and industrial diamonds, half each. Or EWA, for the optimists.
=================================

[Pofarmer]

Dollar lower

Dow lower

Commodities lower

Energy lower

This is not comforting.

[Rick Ballard]

"I could be suffering from lack of sleep and just babbling here."

Well, if you are, so is Treasury. There used to be a "moral hazard" argument to renegotiation of existing mortgages. That's sort of fallen by the wayside due to the slow witted (but nicely credentialed) bankers/economists who concocted the formulas/algorithms which underlay the marvelous MBS/CDS instruments missing the societal change which has reduced the value of a person's word to somewhat less than nothing (depending on the situation and relatively speaking). We're just damned lucky that the economics/finance geniuses were sharp enough to get the Bankruptcy Act revisions through in time for a sufficient number of debt serf collars to be manufactured. Otherwise, things might be getting serious.

[Rick Ballard]

MayBee,

Zombiegroup (speaking of mental midgetry carried to its logical conclusion) accepts the wisdom of your proposal. Obviously, they grow more intelligent by the moment. A tad late, perhaps. This has a bit of a Black Knight feel to it. (How far is it from Black Knight to Norwegian Blue?)

[Danube of Thought]

In the old days, we would simply say that the market has to clear. What congress and both the old and new administrations seem determined to do is to prevent it from clearing. I may be a victim of too much Austrian propaganda, but I don't think this is the proper course at all.

In other news, former SecDef Perry seconds Joe Biden's prediction. LUN.

[bad]

Rick, Kudlow wrote an article a couple of days ago saying there are signs the economy is bottoming out-the first step to recovery.

Is he on the right track? LUN

[RichatUF]

Maybee-

Mortgage Debt Forgivness: please consult a tax professional for your specific circumstances.

To answer your question in part, it can already be done. However the incentive structure with the last housing rescue bill and "advice" people have gotten from the media, people have been going into default thinking a refi would be as easy as their previous mortgage. And with Congress continuing to tinker with the mortgage finance industry no one wants to take the risk with marginal borrows that the existing programs could help (but those that have already been worked out still seem to go into default at about a 50% clip-a clue that perhaps those people shouldn't have gotten the house in the first place).

It would be so much more honest if the Treasury bought all the problem properties and gave them to the occupier because that is what the end game feels like.

FWIW

[steve sturm]

If only Rove and the rest of the Bush Administration had put as much effort into reining in Fannie and Freddie as they are in trying to deflect blame for the crash...

(as I posted), if Bush thought Fannie and Freddie presented a real threat to our economy, why didn't he push back against Democratic resistance a FRACTION of how hard he pushed when the Democrats stood in the way of his national security agenda?

[glasater]

Years ago I bought a very small franchise in a field related to the real estate market. Had many dealings with the folks in Michigan where business headquarters were located.
Trust me--there was never a real estate bubble in that beleaguered state.

[hrtshpdbox]

I can't figure how a lower dollar and lower commodity (including oil/energy) prices would be uncomfortable. Any downside to a dollar move has a corresponding upside; a lower dollar helps exports. Lower commodity prices are almost always a plus, though; falling prices, due to lower demand, helps provide the framework for eventual recovery. The Dow closed down 20 points; fear about tomorrow's unemployment number is probably vastly overdone - tomorrow should be a good upside day. With stocks, it's not such a bad thing if the government is spending (and printing the money to do it; they can't get it all by taxing the rich - most wealthy folks can figure out new loopholes to jump through when the situation warrants it).

[dk70]

Barron's had a front pager about getting the hell out of Treasuries.

Why would China/Japan or anyone for that matter want more?

[RichatUF]

hrtshpdbox-

But what about China not wanting dollars, or Japan, or GB, or KSA, or Russia(?), or Norway, or South Korea, or Dubai, or Abu Dhabi...

[naturalgasoilslumpautosfree]

BOA bought Merrill who got the bailout after Asian banks bought the mortgages. BOA sold it's China Bank stock interest after they forced China bank to pay allot of debt. It's wonderful how all these get along. China won't do anything until it talks to it's Merrill or BOA pal. They can guarantee things and maybe get Obama on the phone. He's an expert at loan criteria and opening up free loans for everyone. He's also an expert at getting 100s of billions in foreign aid. China is doing allot of that now and this is wonderful and beautiful too. So, maybe China will do the aid thing again and get to talk to Obama and his BOA Merrill pals for some more of that good capitalist deal making.

Fannie and Freddie was a civil right s issue, how Obama and his pals sued over the loan criteria. Try to stop that. It's like the foreign aid five year entitlements. Try to stop that. Fannie and Freddie were so bad I could smell them from a soccer game.

So, we need debt forgiveness like Joe's bank's 'grant loans.' We should work closer with our Comrades on foreign aid and maybe Obama will keep them from taking your house ''cause Obama is really the one that sold it.'

Maybe another food emergency emergency and we can argue about the price of gas emergency five year budgets?

Tax cuts are free cars and houses.

[PeterUK]

The Russian gas shutdown gains a new dimension - NATO involvement. NATO might intervene to aid its allies hit by the gas crisis.
"Just as you think you are out,the drag you back in".
And now a word from the PEBO.

[clarice]

Is the NATO warning one with more teeth than the EU warning? Should we respond to Europe as they did to us when we needed them and they balked at even sending defenseive weapons to Turkey as they were treaty bound to do?

[PeterUK]

Clarice,
Soft power,they are going to pay through the nose.Now,if you could just parachute me a camping stove,some thermals and some tins of Spam....

[narciso]

The lobbyists in the second case, including Rick Davis, (one of the useless advisors on the McCain bus) were marginally moresuccessful
in forestalling things, than in the former; with the Kuwaiti/Quatari/Saudi public relations program 'laundered' through white shoe firms. Plus the former didn't have the likes of Franks and Rangel, and co; calling
racism with every possible look into the GSE
market.

[MayBee]

RichUF- I wasn't asking for me!! I don't have specific circumstances.
The main thing I was trying to ask is if it would make it more attractive to banks if they could require they get some of the $$ back if the homeowner later goes on to sell the house at a price close to what they had written off.
Or if the market went back up again, the bank could readjust the principle back up (up to a % of the original principle) .

[MayBee]

glaster-Had many dealings with the folks in Michigan where business headquarters were located.
Trust me--there was never a real estate bubble in that beleaguered state.

One of my family members is one of the top real estate agents in the state. I know the Michigan housing market and the trouble it's gone through. There are definitely parts of Michigan that had bubbles, areas with large numbers of foreclosures, and a there is currently depressed housing market.

So, I can't really trust you on this one.

[Rick Ballard]

"Is he on the right track?"

Dunno, Bad. He's looking at things that I would look at and the signs aren't getting worse but the improvement could easily be erased. The problem that I have is that the over hype of how 'terrible' the economy is doing is so far out of whack with reality that it's become a factor in the recovery process. Prince Zero did his bit today to worsen the situation and if he keeps the babble up it could offset anything positive achieved by dumping dough on the grasshoppers.

I watch the HI (health insurance) contributions to FICA as a measure of economic 'reality'. They were up 3.83% in October YoY v 3.71% through Q3 (again, YoY). As a comparison, 2007 showed an increase in HI contributions of 5.84% over 2006.

So, translated into classical lefty stupidese, the change in the rate of increase is a "decline" of 36%.

Man, I could feel brain cells dieing by the million just writing that.

[Pal2Pal (Sara)]

Is the NATO warning one with more teeth than the EU warning? Should we respond to Europe as they did to us when we needed them and they balked at even sending defenseive weapons to Turkey as they were treaty bound to do?

Not that I would advise anyone to take my son's advice about world affairs as he is so far right, he makes Pat Buchannan look moderate, but his answer to the EU this morning was "Screw them, they wouldn't lift a finger to help us."

I tried to explain that it was a little more complicated than that, his answer was, "so screw them all!"

I sometimes doubt I gave birth to this hardline conservative spawn, but there you have it and most of his peers feel the same way. If they had their way, America should just blow the rest of the world right off the face of the earth.

[hrtshpdbox]

"But what about China not wanting dollars, or Japan, or GB, or..."

Is that the reality, though? The Dollar Index is lower than it was a few weeks ago, but considerably higher than it was in July, and right where it was through most of '07. Currency value will always be chiefly a reflection of relative interest rates; if 10-year Treasury's yield more than foreign paper, they'll be bought (with dollars). Now, the question of just how much debt the gov needs to float to finance any Obama adventurism (as well as the already-in-the-can TARP needs), and if anyone actually has the money to buy all those bonds...I guess that's something else (I just heard it peripherally, but I think Germany went straight to the printing presses to participate at the generally miserable U.S. Treasury auction a couple days ago). The ever-more-entwined de facto "new world economy" caused by global bailouts (and the resultant global need to inflate) should be a topic of lively debate for the economic theorists.

[clarice]

PUK:"Now,if you could just parachute me a camping stove,some thermals and some tins of Spam.... "

I have a better idea, parachute yourself in here until summer..

[Danube of Thought]

God, I do love this new clown who posted a while back: "It's Bush's fault because he didn't push back hard enough against the Dems." Boy, are these screwballs gonna miss W when he's gone.

[PeterUK]

Clarice,
Who would handle this end of the "Antiques and Objet d'art for Light and Heat" (Registered Charity)?

[RichatUF]

hrtshpdbox-

I suppose you could call be a dollar realist. The countries I listed are oil exporters and re-export manufacturers. China will stop using dollars when their largest market isn't the US and they don't have to pay for oil (and other raw materials) in dollars anymore. Oil won't be priced in dollars when the US isn't the largest oil import market anymore. The big scary Barron's article today can go right alongside their gold at $2000/oz editorial.

[clarice]

You might suggest that the antiques are too fragile to be handled in freezing households and therefore their sales will be temporarily suspended. Unless Russia caves to soft power, of course.

[RichatUF]

I suppose you could call be a dollar realist.-> I suppose you could call *me* a dollar realist.

I'm not even drinking.

[07]

NATO wants to kill Russians over gas now? Americans already kill people over oil and that Georgia guy got 3 billion from Joe and Obama for murdering his own people; what should a a NATO country in Afghanistan think?

[Carl]

Hrts at 6:05

"But what about China not wanting dollars, or Japan, or GB, or...

Is that the reality, though? The Dollar Index is lower than it was a few weeks ago, but considerably higher than it was in July, and right where it was through most of '07. "

That used to be a fair way to think of it. But it is a new day when the cheerleader in chief, the soon to be CEO of the world's largest borrower, in a huge speech designed to calm the markets, tells our lenders the world over:

"...And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."

I have borrowed a lot of money in my life, but I never told the lender that. Carter wasn't even that stupid. Even Clinton learned to respect the bond market.

Yea. That makes me want to stuff Rick's floorsafe with Benjies or US Bonds. I'm accepting Kim's suggestion of emeralds in addition to the diamonds, and Clarice's advice to mix industrial stones in with the D Flawless. My wife has been sent back out with a new shopping list.

[kim]

NATO wants to huff and puff. How the Hell can they turn on the gas?
===================================

[bgates]

his answer to the EU this morning was "Screw them, they wouldn't lift a finger to help us."
That wouldn't do at all. I suggest, "We are grateful to our European allies for teaching us to move beyond the barbaric anachronism of 'hard power'. Our new President was justly celebrated for his speech in Europe in which he spoke of 'a world that stands as one'. It appears that Russia wants to return to those heady days of unity. We couldn't be happier."

[PeterUK]

Clarice,
Seriously though,isn't the timing of all this remarkable? Looks like the world has looked at the PEBO and decided it is everyone for themselves.Looks like you have Jimmy Carter on downers.

[Danube of Thought]

Great Scott--"Kennedy Seen As Model For Re-Entry Women." Hell, I guess that's reason enough to appoint her to the Senate; what better way to re-enter? You have to read this nonsense to believe it was actually written. LUN.

[MostEmailedNews.com]

It's astonishing that there is so little regulation that these butthead wall st jerks could gamble on whether people were gonna pay there mortgages. What were they thinking! Now the house has 21 and we are all screwed.

- T

http://mostemailednews.com

[glasater]

MayBee--of course I was painting with a pretty broad brush and Michigan is a very large state area-wise.

The folks I was dealing with were up in the very most Northern part where they assured me things were bad five years ago and were advising me on pricing the product they offered via moi--virtual tours--from the local scene. So that's how I got the perspective.

No biggee and like politics--real estate is like local:-)

[MayBee]

Have you all seen this at Political Punch?
Tops will like it. It's a letter from John Conyers expressing his displeasure at the nomination of Sanjay Gupta:

"January 7, 2009

"Dear Colleague,

"Please join me in signing a letter to President-Elect Barack Obama that Dr. Sunjay (sic) Gupta not be nominated for the post of Surgeon General.

"I join in opposition with respected Noble (sic) Peace Prize award wining economist Paul Krugman, who has very serious concerns with having Dr. Gupta be the nation’s Surgeon General. (See January 6, 2009, New York Times Hosted Blog, 'Conscience of a Liberal.' Available at http://krugman.blogs.nytimes.com/2009/01/06/the-trouble-with-sanjay-gupta.)

"Also, there are highly experienced medical professionals who question whether Dr. Gupta has the necessary experience or even the medical background to be in charge of some 6,000 physicians or more who work in the United States Public Health Service. Gerard M. Farrel, Executive Director of the Commissioned Officers Association, stated in the January 7, 2008 Washington Post that Dr. Gupta will certainly face a 'credibility gap' because he never served in the National Health Service Corp, and furthermore, does not have the 'experience or qualifications to be the leader of the nation’s public health service.' Clearly, it is not in the best interests of the nation to have someone like this who lacks the requisite experience needed to oversee the federal agency that provides crucial health care assistance to some of the poorest and most underserved communities in America.

"For more information, please view my web site at www.house.gov/Conyers. ...

"Sincerely,

"John Conyers, Jr.

"Member of Congress"

[PeterUK]

"I join in opposition with respected Noble (sic) Peace Prize award wining economist Paul Krugman, who has very serious concerns with having Dr. Gupta be the nation’s Surgeon General."

That would be Paul Krugman MD?

[matt]

A big Kumbaya shout out to all of our friends in Europe....

from my understanding, they will be harnessing the natural gasbags in Brussels to help remedy the crisis. Then they can burn all their memos in an environmentally correct solar powered wind stove....that will keep them warm. Or they can all vacation in Marrakech. They're Europeans after all and have plenty of vacation time left at this time of year.

[Daddy]

Don't know much about the EU powergrid network, but...I seem to recall that France gets about 75 percent of its electric power from Nukes, but that the German's have tried to completely oust Nukes in favor of Enviro-friendly alternatives. If this goes on for an extended period during a cold as carp European winter, will be interesting to see if the German public starts making any noises about Enviro-unfriendly alternatives.

[bgates]

MayBee, have you seen that anywhere besides FreeRepublic? I couldn't find it on Conyers' site. At best that should be "respected Noble (sic) Peace (sic) Prize award wining (sic) economist Paul Krugman", and there could be a couple ideological (sic)'s in there too.

[bgates]

Dr. Gupta will certainly face a 'credibility gap' because he never served in the National Health Service Corp
Put him in at CIA, then.

[RichatUF]

test

[MayBee]

bgates- I got that from Jake Tapper at Political Punch (abc news).

[Pal2Pal (Sara)]

PUK: If you are going to parachute anywhere, may I get my vote in. It is 81 degrees here today, a nice room with a comfortable bed and satellite TV is all ready for you and the Jacuzzi is hot, the food hotter, and you would never have to play second fiddle to Mark Steyn like you would at Clarice's.

[MayBee]

I don't know. The website is wrong, too. Maybe Tapper has been punk'd.

[Pal2Pal (Sara)]

Via Reuters - President-elect Obama named four former Clinton administration officials to top defense positions, including former Pentagon comptroller William Lynn as deputy defense secretary. The other nominations are Michele Flournoy to become under secretary of defense for policy, Robert Hale as comptroller and Jeh Johnson to general counsel.

[clarice]

PUK:"Seriously though,isn't the timing of all this remarkable? Looks like the world has looked at the PEBO and decided it is everyone for themselves.Looks like you have Jimmy Carter on downers."

Soft power might be a good sell to kindergarteners. By the time one reaches Middle school, however, anyone with am I.Q. of triple digits, has caught on that the bullies will steal your lunch money if you aren't more clever than they are, stronger than they are or as rotten as they are.
Maybe it's different for kids who went to fancy private schools. (My college roommate did and reported she'd slip into her friend's limo to go home and avoid all that rough stuff..)

[PeterUK]

Thanks Ladies,
But we have a government to bring down and grind into the dirt.Beside I have just launched my tumbrel rental company.

[clarice]

PUK--TWO offers, now..and with me you'd also be behind my long suffering husband--San Diego's lovely this time of year..you can come visit here in Spring..

[clarice]

Darn!! Too late. Well the offer remains open should it be hard to type with icicles hanging from the tip of your nose.

[Danube of Thought]

Nevertheless, I think Soft Power is what we're going to see for a while. I think we will see it until its consequences are reaped; after that I don't have a clue. But again, being smart, I'm not optimistic.

[glenda]

I would be worrying about my wife's legal troubles, and how I was connected to them, if I were Rep. Conyers!! I'm no Gupta fan(of Clinton friends campaign/personal cash cow fame) though I think it's his uncle who sells our telephone #'s and addresses to telemarketers,, but he can be pleasant and informative which might get some teenager ignored by parents learn about AIDS, BC, and STD's. Also, get ignorant parents to be aware of learning disabilities, their own heart and diabetes risks, etc.

[Charlie (Colorado)]

I think Rick has a point, as does Kudlow. Guess what: The Dow was within noise of flat and overall has been a lot less volatile than it was a couple of months ago. Unemployment was up but less than expected. Amazon, Sears surprised to the good side. (Sun stock has nearly doubled.) Oil prices are stabilizing around $50/bbl, which surprisingly is what people were saying was a fair-value price a year ago. Gold is down 10+ percent from its high. Credit spreads are close to normal again. Money is cheap. The Soviets Russians are settling their gas issues with the EU. (The fact that they really need the cash doesn't hurt.) The Congress is performing its Constitutional function: obstructing the Executive. The One's halo is fading rapidly (see, eg, Harry Reid.)

Against that, we've got the business about it being a shame to aste a good crisis, and the worry we've seen expressed that the economy could improve quickly enough it will keep Obamas plans from working.

I don't think panic is justified.

[Charlie (Colorado)]

You know, Gupta slapped around Michael Moore about nationalized health care, and volunteered to do combat neurosurgery over the objections of CNN weenies who thought it raised questions about his "objectivity" --- which I continue to read as complaints that he was saving Eeevil American Soldiers.

I'm beginning to warm to Gupta.

[PeterUK]

Clarice,
The problem with liberal,except the 24 carat shits,is that they simply don't live in an environment where people not only think the unthinkable but do the unthinkable.
The number of times I have heard,"But why would he lie".Dodos,the lot of them.

[clarice]

Oh, bless you, Chaco.. I don't remember ever feeling this unsettled. I'm usually such an optimistic person.

[clarice]

Yes, PUK. They simply have no idea what most ordinary people live like, do they? To hear them slobber on and on about putting thugs back into their neighborhoods as fast as possible after convictions for horrid, violent crimes, ignores utterly what that means to people (unlike themselves) who have to live there...and so on and so forth..

Their mush headedness ends up immesirating those who least deserve it.

[clarice]

**immiserating***

[Danube of Thought]

My concern, Charlie, is that you are correct, and that things will recover (to an extent) in spite of Obama's nonsense, and the claim will be that it was because of it. All well and good if in fact there is a recovery, which is better than the alternative, but a lot of mischievous lessons might be learned by morons, which is very bad for the long term.

[PeterUK]

Well Clarice,they have elected one,he'll have the fillings out of their teeth.

[Pal2Pal (Sara)]

r.v. im·mis·er·at·ed, im·mis·er·at·ing, im·mis·er·ates
To make miserable; impoverish.

I love learning a new word. I got it from the context, but looked it up to be sure, as I do not remember ever seeing the word in print before.

[Rick Ballard]

"I don't remember ever feeling this unsettled."

Boy, I do. In '76-'79 I was bidding very competitive fixed price contracts that 'delivered' nine to twelve months out with labor contracts in hand that had COLA +1 adjustments that ticked up on a six month basis and suppliers who had stopped issuing price lists in '75. Now, it's true that Peanut is a much brighter man than Zero but the situation today is simply not as serious as inflation was then.

[PeterUK]

Downing Street agrees with every word Obama says about the economy. sorry folks you're screwed.

[glenda]

Chaco..
Panic, what panic? My husband keeps telling me to stop stimulating the economy.
I hope you're still here, Charlie...I got one of those special deals Dell sends all the time, but since I'm wanting to buy the Grandson a laptop, it's an Inspiron 6400/1525 with 3GB/250/ even a webcam,Intel duo, for a little over 500. For email-web-browser, a little gaming , is that a good buy?

[BobS]

PUK: Arent we supposed to belive EVERYTHING that NBC, NYT AND THE ONE utters

[BobS]

and that everything that REP pols does is criminal and anything a DEM pol does just doesnt happen as they coveniently forget the (D)

[Extraneus]

The fact that Republican "leaders" aren't already accusing Obama of ACORN-like plans to turn the U.S. into the world's biggest subprime borrower doesn't bode well for the future. I'm not sure we're completely doomed yet, but it'll apparently take some time to find a real leader. It obviously won't be McConnell or Boehner.

In the meantime, I'll look forward to the next video from Fred.

[Pofarmer]

I can't figure how a lower dollar and lower commodity (including oil/energy) prices would be uncomfortable. Any downside to a dollar move has a corresponding upside; a lower dollar helps exports. Lower commodity prices are almost always a plus, though; falling prices, due to lower demand, helps provide the framework for eventual recovery.

In my mind, it shows a general deflationary trend. You would like to see commodities moving against currencies, indicating export demand. Export demand for commodities is really, really flat right now. Yeah, deflation in commodities will be good for the rest of the economy, but it's not all that fun for a producer buying inflated stuff with deflated commodities.

[Pofarmer]

I don't think panic is justified.

Cynic.

[BobS]

Ex: thats why I pushed for Gingrich to be RNC chair. I cannot think of any other pol who's an ideas person and a visionary. Thats what Reagan - and Newt - did. I believe conservatism (you know I hate this) will only proper now here - online.

Mccain tried to say this in a recent interview: the new REP leadership would come from the govenors - Palin, Jindal, Sanford.

[Pofarmer]

that things will recover (to an extent) in spite of Obama's nonsense,

If he gets any of his nonesense in motion, I think you can safely count that out for a while.

[BobS]

If indeed Gateway Pundit is accurate and O is going to open up negotiations with Hamas or something similar, REPS will move forward quickly. This will be in time for 2010. And couple this with the idea that Leon wants to dismantle our intel apparadus, we'll be hit. Heaven knows I pray not. But Democrats have proved they cannot be trusted with anything unless it serves their own political agenda.

[clarice]

Rick:"but the situation today is simply not as serious as inflation was then."

We have a toss up it seems to me between deflation and inflation and it's anyone's guess what hits first and worst and then while inflation was horrific under peanut (my husband had just started his firm and financing was a concern and we wanted a house and 20% inflation was the norm for a while) I didn't also worry about D.C. being blown up.
As a tribute to the stupidity of your govt--all bridges to and from Va will be closed during the inauguration. It was already clear that if there was an incident even with all the bridges operating people would never be able to evacuate..now it's a certainty.

[Carl]

"I don't remember ever feeling this unsettled...

Boy, I do. In '76-'79 I was bidding very competitive fixed price contracts that 'delivered' nine to twelve months out with labor contracts in hand that had COLA +1 adjustments"

Or how about developing real estate in the early 80's with bank loans costing Prime+3 as Prime went to 20...

[BobS]

Please forgive the off-thread/rant topic. I don't seem to be able to grade all the papers I have and kids aren't responding to anything resembling a review for thei finals.

[clarice]

OK, BobS--we won't take off points for that. Today.

[Pal2Pal (Sara)]

Victor Davis Hanson

For just one week we should ban the verb “stimulate” and the noun “stimulus”—and substitute instead the more honest “borrow,” or “print,” or “debt”; as in “The government plans to borrow another $1 trillion for the economy,” or “The administration today decided to print another $300 billion in cash.” Or “Congress met to consider a $1 trillion debt program.” But as it is now, the euphemisms only take us ever more distant from reality, as trillions of dollars are bandied about as if they were mere five and tens in the government wallet.

[BobS]

The power of forgiveness is mighty in the mightiest

[BobS]

flip flop as you desire

[BobS]

a brillion here, a trillion there and pretty soon youre talking about real money

[Destridepechemode]

DC getting blown up isn't a problem. It's just too good a time to off Obamas. Hates Jews, does press conference after school blown up,CIA hates him, Dad an informant like him, kennedy and harvard appointees everywhere, impeaching him is embarrassing, train schedule is Bill's, commodity prices low like Congress ordered, depression, and they figured out his foreign aid cash and loan suing. So, it may not be a time traveling CIA agent on the nole,but as long as he's gotten rid of it's worth it fro everyone. Yes, harvard made trillions of Kennedy.

If they go bio terror, it's just a bunch of people trapped like rats dying, but I'll be they get Obama.

[Rick Ballard]

Clarice,

I really doubt that it will go to extreme in either direction. Charlie and Hrtshpbx laid out the correct (IMO) overview. Zero is an economic dunce and his performance today was as pathetic as peanut in a cardigan but the Fed and Treasury are running things - not the Congressional Clown Corps or Prince Zero.

My questions pertain to how the discredited bank/finance operations will successfully fashion the debt serf collars to a level which allows the serf to breathe while extracting the appropriate fine for his stupidity. If they cinch it up too tight, then the downturn will stretch out for a while. Too loose and the next bubble starts building too quickly. If the error in either direction is extreme then the trust which Wall Street threw in the gutter and flushed down the storm sewer will take even longer to rebuild.

Damned few people on Wall Street are worth the money they scrape off of deals - we'll see if there are at least a few left.

[Red]

---If only Rove and the rest of the Bush Administration had put as much effort into reining in Fannie and Freddie as they are in trying to deflect blame for the crash...--

The reason this effort on the part of Bush didn't go farther is because Barney Frank led the response in unison with the Congressional Black Caucus. The response was "Its RACIST" to want to reform Fannie Mae and Freddie Mac. Especially when the CEO of FM/FM was a black man -- a VERY rich black man.

Bush probably felt that being called Racist - on top of Hitler, Fascist, Dumb, Evil .... was just too much.

[Ann]

I am happy to hear that I am not the only one unsettled today. I have shook my head so many times that I fear it has turned into a permanent tic.

Maybe those UFO sightings are Zero's fellow comrades stopping in to see how he is doing with the teleprompter. (Creepy..I heard some of his speech on the radio but I knew exactly when he was turning his head.)

If Zero gets twelve more zeros (1 trillion) we are all screwed.

[PD]

John Conyers: "Please join me in signing a letter to President-Elect Barack Obama that Dr. Sunjay (sic) Gupta not be nominated for the post of Surgeon General."

I'm with him. Scandalous the way Obama overlooked Deepak Chopra, who could also double as SecDef.

[clarice]

You don't think people might have laughed at the daily enema guru as Surgeon General?

[PD]

Sun stock has nearly doubled.

Heh, good one.

[bad]

people might have laughed

Not me. I'd have roared til I passed out, woke up and howled some more.

[kim]

Gas deal passes. Big warm happy noises.
==========================