|
Now you can Welch
with immunity on your
mortgage?
Yesterday it was
announced that the government is taking
the first step in a plan to virtually ban
foreclosures - a step that can only be
classified as capital markets suicide.
Today, Rosenberg explains why
.....
In
March 2008, I published a report titled
“Capitalism Takes a Sabbatical.” If only
that were the case. I really can’t
believe what I just read on Bloomberg
News (Obama May Prohibit Home Loan
Foreclosures Without HAMP Review).
In a
nutshell, the White House is considering
a tactic that would prevent banks from
foreclosing on defaulted homeowners
unless they have been screened and
rejected by the government’s Home
Affordable Modification Program (HAMP).
George Orwell must be rolling over in his
grave.
To think that the government is at the
same time pressuring banks to start
extending credit again, but the question
is why bother when you have absolutely no
recourse.
We’ve
reached a stage in this crisis where
lenders have no rights. The long-run
distortions from such a heavy handed
interventionist approach are too long to
list right now, but suffice it to say,
this will do more to exacerbate and
prolong the deleveraging cycle than solve
it .....
|
A few
weeks ago it was noted the world's largest
coal producer, Coal India, was on the hunt
for global assets to expand their
reach.
It
appears this is now part of a broader
national strategy mimicking what China
has been doing the past half
decade+.
If you have any Malthusian bones in your
body, you have to wonder as
certain countries waste all their
national treasure on bailing out banks,
financing the lifestyles of those who
refuse to save for themselves, and
funding pet projects of their
politicians - while others are
attempting to snatch up as many long
lived assets across the globe, what the
long term implications will be.
This is more or less parallel to
a company who lives for today - happy to
kick the can down the road - rather
than spend heavily on R&D to prosper
for tomorrow.
Of
course any such national directives would
be considered "socialistic" in certain
countries, hence anathema to even
consider as national
policy.
Oh
well, much better to send countless paper
monies out into the atmosphere to help
prop up home prices and capital market
values from going where they belong - a
much sounder national directive.
|
Economist
and money manager Gary Shilling says the
euro is likely to drop about 27 percent
from current levels.
“I think the currency could go back to
1-to-1 versus the dollar,” he says.
“The problem is that Europe has a
one-size-fits-all monetary policy but very
different fiscal statuses in individual
countries. Greece is the poster boy, but
you have the rest of the PIIGS (Portugal,
Ireland, Italy, Greece and Spain) right
behind it,” he told
Bloomberg.
Greece, for example, has a budget deficit
totaling 12.7 percent of GDP.
“It’s really an insoluble problem because
these economies are very different,”
Shilling said. “They’re much weaker; they
need to issue all these sovereign debts.
And ratings agencies are downgrading
them.”
Whether the euro zone will survive as one
is an open question, he maintains.
That doesn’t make Shilling a bull on the
U.S. economy. “It isn’t so much that we’re
doing anything right, but that Europe has
serious problems,” Shilling said.
While the economy has benefited from a
bounce in inventories, “The question is
does this have legs?” he said.
(Footnote:
Parasites .. um I mean Governments .. are
responsible for the crisis's that are
plaguing these countries spending more
then they have)
|
|
If America really needed more
proof that Nancy Pelosi is probably
insane, it just got it.
This week, at the “health summit” the
Speaker of the House claimed her giant
healthcare boondoggle will create 400,000
new jobs “almost immediately.”
She neglected to mention that most of
that total, which was pulled out of thin
air, would be “Government” jobs and
Bureaucracy.
|
0
