Monday, August 18, 2008

In The Peoples English, We Are SO Fucked.

Hi. Bad news, the Good News Fairy's body was found under a parked bus this morning.

Don't bother changing the channel, any where else you go is going to feature State Sponsored Propaganda.

Let's take a look at what our government isn't telling us today;

Ilargi: A lot of media attention these days for an article in Barron’s about the demise of Fannie and Freddie (which is at the bottom of this Debt Rattle).

Shares in both companies have fallen 15% so far this morning. Their combined market cap is now approaching a mere $10 billion, and that is supposed to support $5.3 trillion in debts and obligations.

The shares will keep falling, they’re beyond redemption; Barron’s includes the statement -which I’ve made here for ages- that common shareholders will be ceremoniously sacrificed. So will management. But they get to keep their pirated casino bonuses.

Since Barron’s estimates that Fannie and Freddie’s real value is negative $50 billion -each-, look for the Treasury and the Fed to figure out a way to pump $100 billion past the receding event horizon that envelops these companies.

And that will by no means be the last we hear of this. After all, $100 billion is still a far cry away from $5.3 trillion. If -make that when- US housing continues to falter, a lot more money will be needed. Long before Christmas.

The upcoming resets in Alt-A mortgages over the next few years provide an ironclad guarantee that US real estate, and hence Fan and Fred, will be hit hard. And the resets are but one in a long range of factors.

That makes all this not a financial, but a political issue. Whatever money will be used to buy out the two, will come from public coffers. And people will increasingly demand to know why the money should be used the way it is, especially as the whole economy starts contracting painfully later this year.

But it will be too late by then: the debts of the gambling community on Wall Street will have been transferred to your pockets, and you’ll be powerless to do anything about it. Fannie and Freddie will be nationalized in one form or another, so they will belong to you soon, debts included.

Both parties in Washington strongly support the biggest financial crime in world history, and there’s nobody else you can vote for. Really, it’s a closed system, it’s been thoroughly tested for leaks.

A good way to get an idea of what lies ahead for all countries comes from UK real estate: Asking prices for houses in London fell 5.3% in August, a $40,000 drop in value per home, in a single month.

I still see numbers floating around of a 30-40% drop in US real estate prices, peak to trough, and I’m starting to get annoyed at these numbers. They're wild guesses based on nothing much at all. Please someone explain what exactly it is that is going to stop the decline once it’s past 30%.

I don’t see anything that could do that. There is a fast and furious contraction of available credit going on, and no lender will be left to finance home purchases on any workable scale.

The only possibility left in that climate is this: Prices will keep on falling, and lose 80% or more. It’s a complete freefall, with no brakes, no safety net and no parachute.

All bolds and italics are mine.

My apologies to Ilargi, I don't think taking part of this message would do the whole justice and I have given attribution and links.

The whole financial meltdown is getting stuck in our ass pockets at the same time we are all struggling to afford groceries, rents and gas to get to our jobs that are paying stagnant wages , while the fucking criminals who brought this to market and are running away from an absolute business disaster get to walk away scott free.
This is ON TOP OF, the ten to twelve BILLION fucking dollars Bush is borrowing from the Chinese EVERY MONTH, to finance his war of choice.

Get a fucking clue folks, we have been set up for failure and the bastards are going to walk away with our money while we starve.


  1. If there's some money left in China or India, we might as well be the ones to spend it.

  2. Hi: I lurk and ocassionally comment over at firedoglake. I live in Camas, and I wanted to let you know that little ole' Washougal is having an International Film Festival this weekend! Here is a link for more info.:



  3. Well, okay, here we are. As mentioned at the old place, I linked you to a story at my place. Will update links now!

    Oh, look for the pic of the flashy car.


  4. Had ta leave another comment to activate the email thingy. lol!


  5. Your last two paragraphs say the whole thing. Fannie and Freddie are not worth two whoops in hell so they will get sold to the tax payers. What a racket! Get out the tar and feathers!


  6. Votus, Thank you so much for dropping by and letting me know about the film festival.
    Unfortunately, I have had two deaths in the last two weeks and are family or close friends of. I have to travel a couple hundred miles to a service next Friday and then rush back for another one.
    I had no idea about this film festival.
    From the looks of it , If you go, try to find your way back to the far corner of the park and say hello to a very dear departed friend of mine.
    She was a beautiful lady, inside and out.

  7. Sorry to hear about your losses. Getting older is hard when you start losing your friends and relatives.

    On the economic front the Monkeyfister and I had predicted this shit storm in early spring. And for those who think the worst is over I've got news for you it's just the beginning. The real problem will be the Fed having to raise rates later this year to attract foreign money to pay the interest of our massive debt.
    Even more frightening is the fact that many prime mortgages are going into default. Then the bulk of the Alt-A mortgages will come due at the end of this year and beginning of the next.
    I can almost see banks wanting to tear down houses like they did in the depression as many homes have been stripped down to a shell (no plumbing or electrical all sold for recycle).
    Look at the bright side. You're still working and you have a roof over your head and something to eat.