You can't make stuff like this up.

Mary Landrieu, the "illustrious" Senator from Louisiana, said the following in a letter to a constituent recently (which the recipient was kind enough to forward to me, and which you can read in full at the link):

"According to a report cited from the Federal Reserve Bank, it is estimated that a lender loses more than $50,000 per foreclosure. This calculates to a loss of more than $1.4 Quadrillion dollars thus far if foreclosure becomes inevitable for these 2.8 Million homeowners."

Oh really Mary?

Let me guess - you failed 5th grade Math?

See, I gave this problem to my 5th grade daughter, and this was her answer:

      2,800,000
     x   50,000
===============
140,000,000,000

That's $140 billion, not $1.4 Quadrillion (there's a bunch of missing zeros to get to that result.)

Now let me ask - did someone TELL Landrieu this, is she really that deficient in the mental department, or is she flat out lying to a constituent that she believes lacks the mental acuity to call her on it?

How do you get to be a Senator if you can't do basic 4-function mathematics? Or is it really much simpler - being a Senator has one qualification above all others - you must be willing to blatantly lie to your constituents, including doing so in writing, and hope they are too stupid to catch you?

More to the point, what does this say about our Congressfolk's estimate of We The People's intellectual capacity?

To run such a clear, crass and obvious load of crap in a written communication smacks of absolute incompetence, arrogance, intentional fraud or all of the above.

The intentional misdirection isn't limited to Congress. The banks are doing it too:

"Banks and securities firms, reeling from record losses resulting from the collapse of the mortgage securities market, are failing to acknowledge in their income statements at least $35 billion of additional writedowns included in their balance sheets, regulatory filings show."

And we as investors and members of the public (who should be shouting at regulators) are allowing it.

Speaking of liars, here's another group - "business economists":

"The U.S. economy will probably exit from a recession by the end of the next quarter as credit markets improve after a year of turmoil, according to a survey by the National Association for Business Economics."

Uh huh. Let's note that one of the identified "economists" is employed by Bank of America, who of course has a hell of an interest in you keeping your money in their bank (and their stock!) even as they play "let's absorb the Subprime King", Countrywide Financial. Never mind that non-performing loans are going parabolic over there and there is no sign that this is going to slow down any time soon.

Again, 5th Grade Math seems to be beyond these folks. The simple fact of the matter is that consumers, over the last four years, have been prodded to "spend spend spend" by withdrawing equity from their homes. We have engaged in the worst sort of intentional deceit upon the American Public via the so-called "trade groups" in the banking and real estate industries, and have prodded people to "buy that IPOD" (or Hummer!) and charge it to the house.

Now the house has stopped going up in value and is in fact declining. Desperate to maintain one's standing of living, consumers have turned to credit cards to feed their addiction to one of America's most powerful drug, the shopping mall.

This is great if you can pay the bill, but in fact Americans can't. Revolving credit outstanding grew at double-digit annualized rates last month but personal income on an inflation-adjusted basis has been declining in every month since October of last year.

The collision of these two realities is obvious and totally ignored by Bubble Television, which is, of course, heavily invested in getting you to that mall to spend more than you can afford - after all, those are the folks who buy advertising on that very same Bubble Television.

Oh, and those fantastic Realtors who were part and parcel of the bubble? They've now turned to, well, trying to make money in a horrible market.

Now that isn't a bad thing, is it?

Well, how about if you do it in this sort of fashion?

"We've been finding an increasing number of "hidden listings" of REO properties. A hidden listing is when a broker lists the property in such a fashion that it cannot be found by local agents working with buyers. This might be unintentional, due to gross negligence, or it might be fraud. The fraud end is clear. If the listing is hidden, eventually the REO owner will keep dropping the price until it is sold. At some point, when the price is low enough, the listing agent can call a friend to buy the property, which they will flip after closing. "

So now, having no more bubble houses that they can sell, we have "businesspeople" in the real estate sector turning to intentional obfuscation and robbery of the GSEs who have an allegedly implicit taxpayer guarantee. By the way, if you read the link you'll find that Mr. Morgan has attempted to alert Fannie to this - they ignored him despite being provided with proof.

You ignore Mr. Morgan at your own peril. Of the analysts in the Real Estate sector, he's the only one I've found that actually analyzes. You know, gets off his ass, travels, talks to people and looks? What all analysts are supposed to do, but essentially none actually do, including a few who have attempted to lambaste those of us who say "yes it really does suck and it really is getting worse."

This is fraud but nobody cares. We have fraud in our banks, we have fraud in our regulators, we have fraud in our GSEs, and we have fraud in our governments. The entire system is now one great big scam from top to bottom and we're supposed to believe that Obama or McCain is going to do something about it?

Like Hell. Both of those crooks are 100% invested in making sure that the people committing the fraud are allowed to continue doing so. Show me one shred of evidence otherwise. McCain was hip-deep in the Keating Five - or have you forgotten that, America?

Obama? He lambastes McCain for his involvement in the Keating scandal but show me ONE initiative he has put forward or pushed to stomp on the rampant fraud throughout our financial and housing systems.

You can't, because it doesn't exist.

NEITHER candidate gives a good damn if your pocket is picked, and in fact both explicitly and implicitly support you being robbed blind by these fraudsters, as every one of their proposals to "help the housing crisis" does exactly that - it steals from you via the tax system so the fraudsters can keep their ill-gotten gains and go on to plunder you again!

It will not change until and unless you get off your butt and tell your Congresscritter that you simply will not tolerate this any longer. That you will act in whatever fashion is necessary, up to and including organizing "mortgage payment strikes" among those who have been responsible, until these fraudsters, all of them including the investment bankers, are indicted and brought to trial. You will not shut up nor stop taking action until the money stolen is returned, the guilty punished, and the government stops coddling and rewarding those who have ripped off Americans to the tune of more than TWO TRILLION DOLLARS.

But you won't act, and as a consequence, your pocket will continue to be picked.

Of course you could simply join them! As is pointed out here, in some states you can simply stop paying your second mortgage if you have one. The lender won't foreclose because they will get nothing if they do; the house isn't worth as much as the first!

In fact, I am beginning to think that this sort of "retribution" is exactly what we need.

If the government isn't going to prosecute fraudsters in the system, then you may as well play the game their way. Go as far towards the edge as you can manage to without ending up behind a cell door, and screw everyone on the way you can find. Why not? The bankers have done it, The Fed is doing it, Congress did it to you already and the Realtors have been and are continuing to do it.

I see no reason for the people to act in a manner that is more ethical than the "paragons of business", Congress and our Central Bank do. None whatsoever.

This weekend Deutche Bank's CEO took his turn saying that the credit situation had "turned".

Ok, if that's true, then under the law The Fed is required to remove all their "special facilities."

Those facilities are only authorized under times of declared extraordinary stress.

If every bank CEO in the land says that its over, then Bernanke must be forced to remove these so-called "special" facilities as under the law they may not be maintained except in emergencies.

Hello Congress? Are you awake? Are you going to force The Fed to follow the law or are you as bad of a joke as they are?

Never mind the call this morning that sent Amazon rocketing higher by more than 10%. The call? Goldman put it on its "conviction buy" list with a $98 six month price target.

Ok, then what of the rumor (which I cannot confirm) that Goldman sold 11% of its holdings of AMZN on the 15th of this month - four days ago!

Why would you sell a company's stock that you think is going higher by 20% within the next six months? That makes absolutely no sense.

How about this as a proposed rule for broker/dealer/analysts? If you publish such a call you are required by law to disclose all affiliated positions by any part of your firm for six months on both sides of the publication, on the Internet, updated daily. This way if you are trading against your recommendations then everyone can see what you're up to!

We have one little piece of truth out of the media this morning. Bloomberg said:

"May 19 (Bloomberg) -- A normal U.S. economy is likely to look a lot different, and worse, after the credit crisis is over and financial markets settle down.

Companies will continue to struggle to raise cash for expansion and innovation as investors and lenders remain focused on conserving capital. Workers, too, may have less flexibility to go after new opportunities, because many will be stuck where they are -- in homes worth less than the balances on their mortgages."

So maybe someone can explain to me why the Dow Jones is less than 10% off its all time high, which was recorded just as the Credit Bubble was starting pop?

Or perhaps you can explain the S&P 500, which is 10% below all-time highs, again, form the top of the credit bubble?

The fact of the matter is that Bubble Television continues to paint the pig with lipstick on a daily basis but nobody pays attention to the economic fundamentals, which make the case quite clearly that you can't justify the sort of P/Es that are being sported on the indices right now with tighter, non-bubble credit conditions.

As the WSJ's Data Page shows, the Dow Jones is trading at a P/E of 87, the S&P at 23.8, the Nasdaq at 31.5, the Russell 2000 at 66 and the Nasdaq at 23.

To put this in perspective a year ago the Dow was trading at a P/E of 18, the Nasdaq at 35, the Russell at 42 and the S&P at 18.

Take these facts and then tell me if you think its a good time to buy equities - or houses.

Oh, and if you listen to people like Kudlow, they'll tell you the P/E on the Dow Jokes or S&P is much lower than the actual figures. How come? He ignores companies with negative earnings.

Speaking of intentional fraud you do know that they have changed how P/Es are calculated, yes, so as to show a lower number than is actual. How? They removed interest expense.

That's right, price/earnings ratios no longer include the impact of your debt if you're a corporation, which means that you can trade at a very reasonable P/E ratio even if you've got one foot in the door of the bankruptcy court due to an inability to service your debt!

Earnings are down 17% on the S&P 500, which is three times worse than predicted by analysts in January.

Explain multiple expansion under these circumstances. Good luck with this one; you've got three quarters now of the analysts being dead wrong as to how earnings were going to come in, and yet we continue to see people out there claiming that "equities are cheap."

In order to hit the estimated earnings for the S&P 500 on a full-year basis we would now have to have earnings expansion take place at a level never before seen in the history of the United States.

Good luck folks......