Sunday, February 10, 2008

SAR #8042

Are we ever going to wake up to the fact that there
is a lot of larceny in the human heart... and
that regulation is not a bad thing?
Ben Stein

As Good As Gold: Through the Term Auction Facility banks can borrow their required reserves by pledging collateral like subprime bonds and questionable credit derivatives that they cant sell at half price on the open market. The Fed's not telling anyone what it's up to because it doesn't want to cause panic, but the evidence is in its own data. Welcome to the subprime standard.

Daily Bread: Wheat prices are at all-time highs. US spring inventories will be 40% lower than last year - the lowest level since 1948. "There is desperation," said a futures trader, "[Buyers] are not worried about the price, they just have to buy it." On the commodity exchange, the daily limit on price moves will double, to 60 cents a bushel, and the limit the following day will be 90 cents. So it will go up 60 cents today and 90 cents tomorrow and tomorrow and tomorrow. Starting Monday.

Starting Over: FDIC Chairperson Sheila Bair warns that “foreclosures continue at an unacceptably high level while true loan modifications are lagging. She also warns that next year, $600 billion worth of prime borrowers will see their “non-traditional” mortgages reset, and many won’t be able to find the cash.

Premature Obituary : Social Security is not the problem, never was. It's run a surplus for at least 30 years. The problem is that our elected thieves 'borrowed' the money so they could spend without troubling us with taxes. Politicians know the voters will not be happy paying taxes later on for all those gifts to the rich, thus all the noise about the fund being broke. Maybe we should take the money back from the rich and stop squandering our future in Iraq.

Ducks: It is not just financial institutions that have burned their fingers on mortgage derivatives; Bristol-Myers Squibb had to write off nearly $400 million in losses from subprime investments which experienced an "other-than-temporary decline in value." Don't you just love money talk?

Tab A in Slot A: US employer job cuts jumped 19% over January 2006. A CEO worried: "If the economy dips into a full-blown recession, it will likely be caused by a drop in consumer spending..." Hey, guess what will contribute to the lack of consumer spending.

Say Ahhh! The US has substantially lower life expectancy and higher infant-mortality than the other advanced countries. Even though we spend much more per person on healthcare, it does not buy us better health. The measure of a nation's health care system is the overall health of its citizens: WHO ranked Americans 72nd among all the nations.

What Hath War Bought? Bush has spent $4 trillion and change on defense. For that we've let Osama escape to Pakistan, grown poppies in Afghanistan, blown Iraq's infrastructure to Halliburton and back, allied Iraq with their arch enemy Iran, killed a bunch of kids, destroyed the Constitution and convicted 4 terrorists. To hell with the $4 trillion, just give us the change.

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