SAR #10043

There's a difference between 'say' and 'do'.

Exceptionalism:  Why does the US get away with doing the same thing the Greeks are doing?  Because the US has never repudiated a penny of its debts, while the Greeks do so on a regular basis.  The US simply slowly erodes away its debts with relentless inflation.  All governments eventually default, including the United States – but better to do it slowly, so as not to scare the horses.

Back to the Future:  Republicans say they want to start all over and “do healthcare right.”  They said the same thing in 1994.  While 63% of all voters want comprehensive health care reform, the GOP does not.

Arcana:  The Fed has approved membership in the Federal Reserve System for a subsidiary of the Depository Trust & Clearing Corporation – the Trade Information Warehouse – as the legally accepted global repository for over-the-counter credit derivative transactions.  This membership means the Fed will guarantee all CDS transactions through the Warehouse.  That's a “gross notional value of $25 trillion”, and whatever portion of that goes south will be made whole by the taxpayer.

Fact Check: When Obama cited a 4% to 7% savings rate as “high”, he misspoke.  Yes, the administration would like to see the consumer consuming and running up more debt, not saving money, but 4 to 7 percent is not - historically – high. 10% is about average.  It's his way of paraphrasing his predecessor's urging the citizenry to get out there and shop.

Unbiased View: T he head of Russia's Gazprom has advised the UK that plans for thousands of wind farms should be scrapped in favor of building more gas-fired plants.  And he knows where they can get some gas, too.

Ups'n Downs:  While January's foreclosure filings were down 10% m/m from December, the experts say the same thing happened last year and foreclosures will surge this spring as attempts to put off the inevitable phase out.

Complexity and Dependence:  Our ancestors had the knowledge and skills to walk into the forest with an ax, a rifle and some livestock and make a life.  Today, if the power goes off we become nervous, worried that the TV and the Internet might be off for hours.  For most of us, it is the government that makes civilization possible - water, sewers, public health, roads, buses, and yes, even snow plows.  What will we do when the complex interdependent network that makes the whole thing work stops working? How much of it should we let the GOP starve?

Footwork:  Fannie and Freddie are planning to buy back from their mortgage-based securitizations those loans that are 120 days or more delinquent.  They will, of course, pay 100 cents on the dollar and end up sitting on stack of relatively worthless mortgages.  This accomplishes two things – it increases the marketability of their MBS and masks the continuing deterioration of the housing markets.

Up, Up and Away: In the Sierra Nevada, over the last 35 years various butterfly species have moved ever higher up the mountains to escape warmer temperatures in their original habitats.  Those that reach the mountaintops, having done the best they can, have "nowhere else to go but heaven."

Mistaken Identity: The war on terror has actually been a war on the Constitution.  The loss of habeas corpus was bad enough, but it was followed by indefinite incarceration without a trial or even charges.  And torture.  Now it is “defined policy” that the U.S. government can murder its own citizens abroad on the sole basis of some unidentified authority judging them to be a threat to the Constitutive.  No arrest, no trial, no conviction - just execution on suspicion of being a threat.  Previously, citizens (at Waco and Ruby Ridge) were killed by accident.  Now it's policy.

Hide in Plain Sight:  Why is there a large 'shadow inventory' of not-quite foreclosed houses?  Because keeping the house in the owner's name lets the bank duck the taxes, avoid paying the utilities and any homeowner's fees, and skimp on maintenance.  But the biggie is that they don't have to take the loss and if they own other houses in the neighborhood, it helps artificially keep up appearances and prices.  But the gap ( pretty chart) between serious delinquencies (about 6.5%) and foreclosures (at 2.5%) insures that the un-foreclosed cannot stay that way forever.