Fiatch

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House of Cards, USA - since June 28, 1934

[photo source]

This man is still employed.

From Reason.tv:

At Reason’s 40th anniversary event, held in Hollywood on November 14 and 15, the American Enterprise Institute’s Peter Wallison analyzed the roots of the current market meltdown and explained how government policies directly caused or massively exacerbated the housing bubble and the subsequent bust at the center of things.

The Arthur F. Burns Fellow in financial studies and codirector of AEI’s program on financial markets deregulation, Wallison is the author of several books including most recently, Competitive Equity: A better way to manage mutual funds.

The Market Ticker continues to allege massive criminality behind this crisis.  How bad is it really?

What builds trust?  What destroys it?  What store of value is safe?

About 5.4 million American homeowners with a mortgage (~12% or 1 in 8) were either behind in their payments or already in foreclosure at the end of 2008, according to the Mortgage Bankers Association.

via Ritholtz

Glenn Beck asked “Does this sound reasonable?”

Of course, the President’s assertion is not reasonable.  It’s ridiculous.

Vainly trying to justify disastrous interventions that disrupt the housing market, President Obama laments that more than 250,000 construction jobs have vanished since 2006.  Such statistics sound official and definitive even though no context is offered.  The President’s case cannot be characterized as argument; it’s a con.

Mr. President, the decrease in construction jobs is GOOD news.  Take a look at the inventory levels of homes and property of all kinds.  The policies of The Fed, the Bush administration, and a couple decades of destructive social engineering artificially inflated the housing market to an alarming degree.  Why fight reality?  Reality gets to win.

Get out of the way, Mr. President.  You are doing enormous damage.  State authorities are blatantly leveraging this crisis to acquire more power.  We allow this heist at our own peril.

Btw, as you watch this clip, pay close attention to the behaviour of the line as we pass through the early 1970’s when President Nixon left the last of a gold standard behind.  Ain’t fiat currency grand?

What builds trust?  What destroys it?  What store of value is safe?

(Hat tip to FA)

How much farther to fall?

Per the previous post, builders are lobbying for their own bailout at fixhousingfirst.com, throughout mainstream media, and, of course, by pressing elected officials and bureaucrats.  Before this crisis finishes, every industry will seek its take of the trillions stolen.  They will plead their need and line the pockets of the worst kinds of influence peddlers.  Weakness and vice become virtues in this (anti)marketplace.  What a debilitating, damaging temptation this global heist represents.

Please note the assertion above that “Falling home values are at the core of our current economic crisis.“  Ask yourself, what caused the housing bubble?  Follow the trail.

Falling home values are tributary to both government intrusions into the markets for housing and capital and also government manipulation of fiat currency.  Propping up housing would represent a continuation of both failed programs, which, sadly, means that there is a decent chance such a bailout will be enacted.

The collapse of trustworthiness continues.  Fix integrity first.

The WSJ has builders seeking bailout:

The builders’ lobby is ramping up its sales pitch for a $250 billion stimulus package called “Fix Housing First,” arguing that financial markets won’t recover until home prices stop falling. They are calling for a generous tax credit for home purchases and a federal subsidy that would lower a homeowner’s mortgage rate.

If you’ve been wondering how deeply the government has dived into the housing market, so-called, check this stat:

Already, the government has taken steps to subsidize the mortgage market by approving larger loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration, which together account for more than eight-in-10 new loans.

Now try this exercise — read the next paragraph as if the article were discussing money instead of housing:

“The basic asset that is underlying all the financial problems that we’re experiencing is highly unstable, and it’s causing an ongoing hemorrhaging in the financial system,” said David Ledford, who oversees housing finance and policy for the National Association of Homebuilders. “It’s starting to snowball.”

Sound, stable, money.  If only. (Read Dr. Paul’s take here.)

“FHA-Backed Loans: The New Subprime” via BW:  “The same people whose reckless practices triggered the global financial crisis are onto a similar scheme that could cost taxpayers tons more.”

Reality intervenes:

• “Slowdown threatens stability, says China PM” via the FT
• “China acts to stem the tide of officials fleeing with cash” via the CSM
• “Some owners deserting factories in China” via the LAT
• “The Rising Risk of a Hard Landing in China: The Two Engines of Global Growth – U.S. and China – are Now Stalling” via the RGEM
• “China Announced $586 Billion Stimulus Plan” via NC
• “Sharp rise in Indian investors’ suicides” via the FT
• “Fitch Downgrades Emerging Markets as Global Slowdown Spreads” via BB
• “U.S. Throws New Lifeline to AIG, Scrapping Original Rescue Deal” via the WSJ
• “The Black Hole Gets Bigger: AIG Back For Yet Another Bailout” via NC
• “Automakers’ $25 Billion Fast-Track Bailout” via BW
• “Auto Makers Force Bailout Issue” via the WSJ
• “Some G.M. Retirees Are in a Health Care Squeeze“ via the NYT
• “’Greatest Generation’ Struck By Mortgage Crisis” via NPR
• “Credit does not grow on trees” via FP Comment
• “Zero Rate World May Lie Ahead as King, Trichet Cut” via BB
• “How the Thundering Herd Faltered and Fell” via the NYT