Who Couldn't See it Coming?

I really wish that I hadn't pulled the first posts down ... they told the story rather well. There is a certain glee that I feel as it relates to being right about this mess. However, that is (way) overshadowed by the knowledge that things are going to get worse. I will really never understand how things could have gotten this bad. Three or four years ago, when I was railing against the GSE's, I was actually beginning to believe that they might survive. It then became more and more obvious that the supply/demand equation relating to housing was skewed much to far on the supply side. The inevitable conclusion, a major sell-off, has begun to take effect. I think that it's going to get worse and the fact that the federal government has set a precedent by coming to the rescue of the GSE's will make it worse still. I know that the country really couldn't let Fanny and Freddie fail, but the tab for the rescue is staggering - people in Washington actually speak about $1,000,000,000,000 (that's one trillion, one thousand billion) as if it's a number that they actually understand. They don't. By the way, the budget as submitted by the administration for FY 2009 amounts to roughly a $42,000 tax bill for every household in this country (what they actually pay about $12, to $15,000, largely because of the mortgage deduction) - that did not count defense and it certainly did not count the cost of the subject bail-out.

Anyhow, I am one of three partners in a newly formed small business. Each of us has put our "life savings" into it. We sell bicycles and cross country skis. What is the prospect for our future in a recession caused by the excesses of an easy credit culture? Will the federal government come to OUR rescue if we begin to fail? The government is saving the financial institutions that have given us the credit that we needed to open our doors. Now, however, those companies will be the beneficiaries of the GSE bailout for which we bear the ultimate financial responsibility. It will be interesting to see, should businesses like ours begin to get behind the old eight ball, just how understanding the banks will be when they begin to start collection procedures - remembering, that they are in business simply because they have been saved by the government. I suppose that, in our society, that gives them the right to make the lives of we citizens miserable.

As I point out in the previous post, I have written to many people, both in and out of government, to warn of this disaster. Again, because I felt that you had to be a complete financial moron or to be in the pocket of those "special interests", not to see this coming. Now that it's here, it's too late to stop and the people to whom I've written are more concerned with getting re-elected than devoting any energy to solving this problem.

We deserve what we have gotten ... we vote based upon trivia. We are all victims of dopes like Carl Rove whose single-mindedness has won elections for a bunch of, at best, average intellects. We are about to vote again. Look at who's running - what is their agenda? Really? What do we ask of them?

I've said for the last few years, that if Fanny and Freddie fail, that it will make the depression look like a walk on the beach. That is nothing more than a hollow cliche. However, is it true?