And So It Begins...

From the Nooz.....

That's a very pretty screenshot of Drudge.  Note the nice red text at the top left?  Developing eh?  What needs to develop is that the Chinese need to take care of their own people, and that doesn't include loaning us unlimited amounts of money to blow on "stimulus checks" and make-work greenie garbage.  After all, at some point the lender is supposed to ask "heh, how and when are you gonna pay that back?" 

Has China finally woken up to the utter stupidity of our government, who created this mess in the first place, managed to steal $350 billion (of their money) via the TARP to give to the banks for bonuses and acquisitions, and now expects that China will just keep letting us steal their money over and over again?

One can hope the Chinese are smarter than we Americans. 

It would be tough for them to be dumber.

Over in Germany someone sure woke up.  The Bunds had a failed auction.  Not good.  Bundesbank had to take the rest of it down, meaning that investors simply weren't interested.  Heh, can we have some of that over here to force a little fiscal discipline down the throats of our feckless fools in DC?

CBO Sees record $1.2 Trillion '09 Deficit (not including Obama's stimulus program, which will be $500 billion - in the first year - more!)

Bloomberg had a fine gent from Institutional Risk Analytics on commenting after Paulson's "speechifying" who absolutely excoriated him in words I've yet to hear on any national television or radio show (psst: It's about time)

On that speech - Paulson seems to think we need to "redo" Fannie and Freddie.  Here's a hint Hank - get the government out of lending mortgage money entirely and let this nasty little thing called "The Market" do its job.  Prices will come in to where they should - where you'll need 20% down and won't be able to borrow more than 3x your income - but that's fine.  Its how it should be (and how it was before the "masters of the universe" stuck their greedy paws in the pie.)

Speaking of mortgages, here's a nasty.  October, prime borrowers were getting 5.6% with 0.6 points, Fannie's securities trading par at 5%.  60 basis points, roughly, inbound to Fannie, right?  Today, prime borrowers given 5% with an average 0.75 points, but Fannie's "par" is 3.8%.  The banks are making more than double what they were in October.  "Rate cuts", "Quantitative Easing", all good for the economy and the consumer?  Ha!  Once again the consumer gets bent over the table as a direct consequence of our government's policies as the "privileged few" are provided yet another means to screw you.  That's right - the banks margin has somewhere between doubled and tripled by padding their margin, stealing an extra $1500 "per customer" (on a $200k loan).  (Hattip folks on the forum)

Oh, and they're not content to just rob you for $1500 either.  This little ditty over at ML makes clear what some of these clowns are up to.  Here's the bottom line: Original loan, $1 million, current value $800k (ouch.)  New loan, $1.053 million, first two years, $878 and 1% interest, next year, 3% and $2633 ("here's where your payment triples!"), fourth year 5% and $4389 ("and here's where it nearly doubles again!"), fifth year aw crap that $45,000 they capitalized is due in full as a ballon, and by the way, you waived claims for predatory lending!  HOPE FOR HOMEOWNERS?  What sort of hope is this?  Hope that you bought a giant-sized tube of KY Jelly for the assault and a case of Preparation "H" for the aftermath?  How do you spell "instant bankruptcy"?  These bankers all need to be put in federal prison (for their own protection) lest the public decide to play "Banker Baseball".

Satyam effectively collapses in India (Hereeeeeesssss MADOFF!  Told 'ya there is never only one cockroach!)  Confidence?  I suppose if the sort of confidence you want is confidence that you'll get robbed, there's plenty of it.  Somehow, I suspect that's not what people are looking for.

ADP reported a horrifying employment number (negative 650,000, roughly) in front of the "official" number Friday.  Gee, you think that when companies and consumers have too much debt they can't spend any more?  (As an aside, have the clowns in Washington figured out that this applies to them too - that their credit card might get cut off?  No?  Better look at that top image from Drudge again....)

It now appears that both Credit Suisse and (as reported earlier) Goldman were aware of something hinky with Madoff as early as 2000.  Our SEC, on the other hand, despite explicit communications containing the math proving that the claimed strategy was impossible, did exactly nothing.  Oh, and as for Goldman - did Henry Paulson know there was something wrong with Madoff's fund, and if so, why didn't he prompt an investigation when he got to Treasury?  Let me guess - he assumed the scam was "front-running" and that "wouldn't be a big deal" (after all, everyone expects people on Wall Street to cheat, right - just not cheat them!)

Slowly - but certainly - the street and people are waking up, worldwide.

Our government is fast approaching the day when deficit spending simply won't be able to be done any more.  It will be one of those things that they say "couldn't be foreseen", even though I've been talking about it for quite some time.

Of course Obama could choose to demand that all these clowns on Wall Street force their bad debt out in the open and take their licks.

But that would require doing the right thing, instead of the easy thing.

Naw, we'll wait until its an "unforeseeable circumstance", and once again I will get to say "I told 'ya so!"

(PS: If you depend on that government deficit spending I hope you've been paying attention to my warnings and doing what you have to in order to solve that problem in your personal life.  Time may be running out at a much faster rate than I had thought.)