Bailout Watchdog: TARP Has Increased Risk of Another Crisis

January 31, 2010 · Posted in Government · 2 Comments

As we all know bailouts accomplish nothing but making matters worse, create false incentives, and make all of us poorer. Thus, as can be expected, the TARP watchdog reports:

The government’s response to the financial meltdown has made it more likely the United States will face a deeper crisis in the future, an independent watchdog at the Treasury Department warned.

The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the trouble asset relief program, or TARP. The quarterly report to Congress was released Sunday.

“Even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car,” Barofsky wrote.

Since Congress passed $700 billion financial bailout, the remaining institutions considered “too big to fail” have grown larger and failed to restrain the lavish pay for their executives, Barofsky wrote. He said the banks still have an incentive to take on risk because they know the government will save them rather than bring down the financial system.

Barofsky also said his office is investigating 77 cases of possible criminal and civil fraud, including crimes of tax evasion, insider trading, mortgage lending and payment collection, false statements and public corruption.

One case concerns apparent self-dealing by one of the private fund managers Treasury picked to buy bad assets from banks at discounted prices. A portfolio manager at the firm apparently sold a bond out of a private fund, then repurchased it at a higher price for a government-backed fund. A rating agency had just downgraded the bond, so it likely was worth less, not more, when the government fund bought it. The company is not being named pending the outcome of Barofsky’s investigation.

Barofsky renewed a call for Treasury to enact clearer walls so that such apparent conflicts are less likely.

Treasury said it welcomed Barofsky’s oversight but resisted the call to erect new barriers against conflicts of interest. The new rules “would be detrimental to the program,” Treasury spokeswoman Meg Reilly said in a statement. The existing compliance rules “are a rigorous and effective method of protecting taxpayers,” she said.

Much of Barofsky’s report focused on the government’s growing role in the housing market, which he said has increased the risk of another housing bubble.

Over the past year, the federal government has spent hundreds of billions propping up the housing market. About 90 percent of home loans are backed by government controlled entities, mainly Fannie Mae, Freddie Mac and the Federal Housing Administration.

The Federal Reserve is spending $1.25 trillion to hold down mortgage rates, and millions of homeowners have refinanced at lower rates.

“The government has stepped in where the private players have gone away,” Barofsky said in an interview. “If we take government resources and replace that market without addressing the serious (underlying) concerns, there really is a risk of” artificially pushing up home prices in the coming years.

The report warned that these supports mean the government “has done more than simply support the mortgage market, in many ways it has become the mortgage market, with the taxpayer shouldering the risk that had once been borne by the private investor.”

Barofsky’s report echoed concerns raised by housing experts in recent months, as home sales and prices rebounded. They warn that the primary reason for the turnaround last year has been billions of dollars in federal spending to lower mortgage rates and prop up demand.

Once that spigot of cash is turned off, they caution, the market will be vulnerable to a dramatic turn for the worse. Daniel Alpert, managing partner of investment bank Westwood Capital, wrote in a report that national home prices are bound to fall 8 to 10 percent below the lows of last spring.

“The lion’s share of the remaining decline will occur in markets that saw sizable bubbles but have not yet retrenched,” he wrote.

Officials from the Obama administration counter that massive federal intervention has helped the housing market stabilize and prevented more dire consequences.

Barofsky’s report also disclosed that, while the Obama administration has pledged to spend $75 billion to prevent foreclosures, only a tiny fraction — just over $15 million — has been spent so far. Under the Making Home Affordable program, only about 66,500 borrowers, or 7 percent of those who signed up, had completed the process as of December.

He said the key to preventing future crises is to reform Fannie Mae and Freddie Mac, create and improve loan underwriting and supervision of banks. He stopped short of endorsing specific proposals for overhauling financial regulation, but said many of the proposals would go far to improving the system.

Sorry, but that conclusion is just hilarious. This really is akin to a woman in an abusive relationship who continues to believe her boyfriend will change and continues to run back to him, no matter how many times she gets beaten up.

The entire article points out how incapable of solving any one problem the government is and concludes with the solutions of “reforming” nationalized banks, “creating” loan underwriting, and doing some more bank supervision. Who does all these things? Of course, that same government! That is supposed to solve the structural problems in the financial system?

No, what needs to happen is to bring down what has brought about the financial crisis in the first place.

Who has created all the excess fiat money that flowed into the system to blow up price bubbles? The Federal Reserve Bank – so just close it down already!

Who has created all the excess credit that blew up the bubble? The fractional reserve banks – so just end the system of fractional reserve banking already!

Who has granted oligopoly status to the rating agencies who one after another failed to assess credit risk appropriately? The SEC – so end the credit rating cartel already!

In fact who has taken away oversight from the stock exchange companies to try and oversee all stock exchanges in the country, missing one giant fraud after another? Which organization was close to Making Bernie Madoff their chairman?? The SEC – so get rid of it already!

Even after some of the worst excesses of subprime lending, who proudly remains the sole subprime lender in the country? The government owned banks! – So close them down already!

Who has been propping up financial markets in secret over decades with taxpayer money, creating malinvestments and false incentives left and right? The mighty President’s Working Group on Financial Markets! – So get rid of it already!!

What is it that made the common man put so much money into the stock market? It comes to a large degree from the incentive through tax savings for retirement accounts. If the taxes weren’t there in the first place, surely people would think twice about transferring their hard earned and saved money over to Wall St.

On top of that a policy manipulating and suppressing interest rates makes it completely unattractive to put money into savings accounts, and encourages people to be foolish. – So again, stop meddling with the credit markets, get rid of the central bank and with it would go all fractional reserve lending.

Why do you think it is so hard for honest small businesses to obtain funding in a flexible and straightforward manner? Why does it feel to most people like they are secluded from the majority of the action while Wall St. thrives? It is because every single government policy aiming at financial regulation has been designed to herd money into the stock market and lock it up in there for the kids to play with.

Which institution, out of all, is the least capable to be responsible about its finances, stay out of debt, live within its means? … it is of course the government itself.

Folks, wake up to reality, leave fantasy island. Come to your senses and work toward closing down that institution which is the root cause of all your problems: Close down the government and all the things I pointed out above and many more evils would automatically go with it.

Tags: anarchism, bailouts, corporate bailouts, tarp

Comments on John Tate’s Statement Regarding Ken Buck

January 31, 2010 · Posted in General Economics · Comment

I am actually not sure what to think of John Tate’s statement. He starts out by rejecting the notion that C4L in any way endorses Ken Buck. Fine. He points out that no existing C4L donor funds were used. OK. He also points out that he takes “our message of peace, freedom, and prosperity as well as the responsibility entrusted to [him] to run this organization very seriously”. Great!

So then, after raising all these valid points, all conceding that C4L has no business supporting in any way a war mongerer, he sneaks in this:

“As a multi-issue organization with activists from all manner of backgrounds, we each certainly will have our share of disagreements and agreements. The critical question is whether or not we will let disagreements on occasional topics destroy the unity we share in our desire to be a free people.”

Why did he add this sentence? Is he trying to prep us for a watering down of our message of peace and freedom?? Excuse me, but what does he mean by “occasional topics”. The issue of opposing the war in Iraq and Afghanistan is not an occasional topic. It is based on fundamental C4L principles!

Yes, we may have our disagreements on certain things, like what the best strategies are to spread our message, or whether we should abolish the Fed or simply legalize competition with it. But there can’t be any discussion on whether or not we support shooting people (who have never posed an imminent threat to us) in foreign countries.

So, this section of his statement I found rather confusing and disturbing …

Tags: campaign for liberty, john tate, ken buck

True GDP Q4 2009 – Down 15.4 %

January 30, 2010 · Posted in General Economics · 6 Comments

True GDP in Q4 of 2009 has dropped by 15.4% from Q3.

Obviously the recently reported 5.7% GDP growth is a complete joke, even for the regular GDP. It is so ridiculous that I expect it to be revised downward significantly at the end of February.

Even looking at the official and available data, in my calculations I don’t get anywhere near 5.7%, more like 1.5% for the official number. I don’t know where the 5.7% is coming from. Either I am missing something or they made a mistake. But that said, the officially reported GDP is a sham anyway, so who cares …

Tags: gross domestic product, true gross domestic product

Fed Independence in Action – Bernanke Met With 26 Lawmakers Prior to Vote

January 30, 2010 · Posted in Politics · Comment

To those hopelessly lost, twisted, and clueless souls who seriously believe that 1. Fed independence (=secrecy) is a good thing and 2. the Fed is actually in any way, shape, or form independent from the government: Maybe the fact that Bernanke Met With 24 Senators After Renomination as Fed Chief will interest you:

Federal Reserve Chairman Ben S. Bernanke had conversations with 18 of the 23 legislators on the Senate Banking Committee prior to their 16-7 vote this month to recommend that the full Senate confirm him to a second term.

The Fed chief had contact with 24 senators between August 4 and Nov. 30, almost all at congressional office buildings, after his Aug. 25 nomination to another four-year term as chairman by President Barack Obama. The meetings and phone calls were listed in a daybook provided by the Fed yesterday in response to Freedom of Information Act requests by Bloomberg News.

…

Bernanke also met with House lawmakers, including Majority Leader Steny Hoyer of Maryland and John Larson of Connecticut, chairman of the House Democratic Caucus. He lunched with Republican members of the House Ways and Means Committee on Sept. 16, and spoke the same day at a Rhode Island Business Leaders Day event sponsored by Senator Jack Reed, a Democrat on the banking committee.

Aaah yes, that smacks of independence indeed …

Tags: ben bernanke, federal reserve bank

Obama’s Laughable “Spending Freeze” Proposal

January 30, 2010 · Posted in Government · Comment

The AP writes:

Obama also has proposed a three-year freeze on most domestic spending, beginning in the budget year that starts Oct. 1. Spending related to Medicare, Medicaid, Social Security and national security would be exempt.

OK, so Medicare, Medicaid, Social Security, and spending on war, killing people, dropping bombs, etc. will be exempt from this “spending freeze”. I wonder why?

Maybe a quick look at your average annual federal budget will help clear this up, I am here using the federal government’s budget for 2010:

The only category above that is not surely exempt from the “spending freeze” is “Other Discretionary Spending”, 20% of the total budget. Note that nobody talks about cutting any of that. It’s merely going to stay where it already is.

Meanwhile, on the remaining 80% we are being blatantly assured by the President, by virtue of the fact that he is exempting them from the outset, that they will in fact continue to grow moving forward.

On top of that, even out of those 20% of other discretionary spending there is certainly some of it that falls under one or the other holy cow categories, namely Military, Medicare, Medicaid, or Social Security. Thus the total subject to the freeze is rather around 12.5%

As Mish points out:

Exemptions

The $154 billion jobs plan pending before Congress

Medicare

Social Security

The $787 billion economic stimulus plan already being implemented

Department of Defense

Homeland Security

Veterans Administration

International operations.

What’s Covered

One eighth of the total annual budget

This is so ridiculous I don’t know how the administration is not embarrassed to death to present it. Moreover “The freeze would be measured overall and would not be applied across the board.” The freeze is only for three years.

How can anyone in the Administration expect to be taken seriously about budget deficits after presenting this ridiculous plan?

What the administration is serious about is a strategy of extend and pretend. The sheeple are upset about budget deficits, so what do they get? The president announcing a spending freeze (that is none), endorsing a “deficit reduction task force” and talking day in day out about the importance of “tacking the deficit”, while simultaneously spending $787 billion on a stimulus, pushing through another $150 billion for a “jobs plan”, and spending more than any previous administration on wars.

By the way, the deficit task force got rejected in Congress … it is pretty amazing that they can’t even agree on at least talking about deficits, so please don’t even dare to think that they will actually do anything about it, other than of course raising your taxes as they always have.

Tags: budget deficit, president obama, spending freeze

John Tate’s Statement Regarding the Support for Ken Buck

January 30, 2010 · Posted in Politics · 1 Comment

For fairness’ sake:

Throughout 2010, Campaign for Liberty will be running an issue discussion program through our candidate surveys in every state to promote our issues and agenda and to lobby candidates for federal office and to get them on the record in support or opposition on our issues.

Since our inception, we have had many requests from our members for such an effort to help in their work to educate those around them.

As part of this program, mail, radio and TV ads, banner ads, and other forms of communication may be run to encourage candidates to go on record in support of our Liberty agenda, to highlight the responses of the candidates on our issues, and to hold those candidates who ignore our cause accountable.

There have been some questions as to why certain candidates have received surveys while others haven’t. This is simply a matter of putting in place a systematic approach based on candidate filing deadlines and clear survey response deadlines in order to send out surveys in an organized fashion.

For example, Texas candidate surveys have been mailed, and Kentucky surveys will be mailed next week. Illinois survey results are already available on our web site.

As we launch this new undertaking, I also want to take a moment to address your inquires about one of our first public survey ads in Colorado.

First, I think it is important to state up front that, in keeping with our 501(c)4 status, none of our work is in endorsement, support, or opposition for any candidate. In our survey program, we seek only to report where candidates stand in regard to the specific questions to which they have responded.

In retrospect, the ad we are running could have been messaged differently to help avoid any confusion on its intent and to better advertise our issue discussion program. Your invaluable feedback will help us correct this in the future and, as a result, strengthen the effectiveness of our program. This is C4L’s first foray into launching this kind of national initiative, and we are convinced it has the potential to make a tremendous impact.

The candidate featured in the Colorado ad answered 19 out of 20 questions correctly on our C4L candidate survey, and he has been publicly outspoken on Audit the Fed and an out of control federal government. He also answered the Foreign Policy questions and warrantless search question on our survey correctly.

We treat these surveys as a personal promise from the candidate as to how they will vote upon entering Congress. And I can guarantee you we will hold them accountable for their actions and responsible for how they presented themselves to us.

That being said, there is an even more important fact: The Colorado program was funded by a small number of Colorado activists. The funding for this program came ENTIRELY from this small group of new C4L donors.

So for all our great grassroots who are wondering why we might not have used this money elsewhere, I can say two things: First, we WILL have similar programs in MANY other places soon, and second, we did NOT use any money raised generally by Campaign for Liberty to run these ads in Colorado.

In order to both launch the Colorado effort and test our survey program, C4L did not use existing donor funds but built new support and donations, especially within Colorado, specifically for this project. This is the approach we hope to take as we seek funding for many other special projects this year in other states.

I take our message of peace, freedom, and prosperity as well as the responsibility entrusted to me to run this organization very seriously. I hope you all know that, and can give us here at C4L the benefit of the doubt when a situation arises about which you might want more information, or with which you even might not agree. As a multi-issue organization with activists from all manner of backgrounds, we each certainly will have our share of disagreements and agreements. The critical question is whether or not we will let disagreements on occasional topics destroy the unity we share in our desire to be a free people.

This movement has a unique window of opportunity to change politics in our country and restore our lost liberties. But to accomplish this, it will take our unified effort and focus. I see great things for us in 2010 and beyond if we can do that. I hope I’ll have your support as we continue our campaign for liberty.

So then, after raising all these valid points, all conceding that C4L has no business supporting in any way a war mongerer, he sneaks in this:

Yes, we may have our disagreements on certain things, like what the best strategies are to spread our message, or whether we should abolish the Fed or simple legalize competition with it. But there can’t be any discussion on whether or not we support shooting people (who have never posed an imminent threat to us) in foreign countries.

So, this section of his statement I found rather confusing and disturbing …

Tags: campaign for liberty

Call the cops …

January 30, 2010 · Posted in Government · Comment

A friend called the cops today because he thought they would help him for some reason. I then asked him and two other friends: “Tell me, when did cops ever help you and NOT bully, harass, or fine you for not hurting anyone?” – Two remained silent, one said: “This one time, a cop helped me because he was going to fine me for driving fast, but then let me off.”

If I put on a blue costume and a hat, does that allow me to stop anyone whose speed I don’t appreciate on some road? What if I stop my neighbor and tell him that it is only through my own goodwill that he will be able to move on. Does that mean I helped him? Didn’t I much rather waste his precious time??

This is how mentally brainwashed and deranged we are today. We justify the most violent and intrusive of acts, so long as they are performed by the almighty armed people in blue costumes.

Tags: Government, police

Campaign 4 Liberty Supports Pro War Candidate

January 29, 2010 · Posted in Politics · 4 Comments

I just read on my friend Pete Eyre’s blog about a sad direction that C4L seems to be taking. The organization has supported Ken Buck, a pro-war candidate:

This sickening statements comes from Buck’s website:

My son is a third year cadet at West Point. I’m very proud of my son’s decision to serve his country. He understands the risks involved. He also understands there is a price for freedom in this country and he’s willing to stand up and shoulder that burden. For so many of our brave men and women today, that means shouldering the burden in Iraq and Afghanistan.

We definitely need to continue a major effort in Afghanistan. We are told this effort will take at least 10 years. It will require both military and civilian personnel to help build up the country. The generals on the ground tell us we are likely to be in Afghanistan for the long term with a difficult and complicated mission.

As Colorado’s Senator I will always look first to the advice of the generals, and I will strongly support the mission of our troops who are in harm’s way.

Now, I have to say as a former supporter of C4L, I don’t particularly care for conservative values. I don’t care for progressive ones either. I care for what is right, and just, true, and good. So I find it quite offensive that the money that I and other members have contributed in part goes to funding an over a quarter of a million campaign for some Republican Senate candidate whose views have nothing at all to do with the message of peace and freedom and who represents nothing but your average conservative war mongering bigot.

Pete states his suspicions about a new direction that C4L leadership seems to be taking:

… John Tate, C4L’s head neglected to touch on non-interventionism while addressing the attendees at the 9-12 march in DC. Many believe it was not an accident.

Not that I HAVE to point this out, but just in case there is some confusion, this is from C4L’s own statement of principles:

With our Founding Fathers, we also believe in a noninterventionist foreign policy. Inspired by the old Robert Taft wing of the Republican Party, we are convinced that the American people cannot remain free and prosperous with 700 military bases around the world, troops in 130 countries, and a steady diet of war propaganda. Our military overstretch is undermining our national defense and bankrupting our country.

Naturally, the grassroots members are rebelling.

The story just got mentioned on the Huffington Post and a comment left on the Denver Post article to which it links is for me, the epitome of how far C4L has strayed from its founding:

With everyone from Dick Cheney, to Tom Tancredo, to the Campaign for Liberty supporting Ken Buck, it is no wonder he is the only Republican candidate that can unify the GOP base and ensure victory in November. I support Ken Buck!

I do recognize that C4L has helped introduce individuals to the ideas of liberty, at least initially before it was co-opted by those seeking to avoid the “non-interventionist” plank of their mission to cater more to the pro-war right (and their wallets). But no one should get a free pass or be exempt from being held accountable for their actions. And we’re seeing that – the market, in this case those that had previously supported C4L – is responding as some that had previously supported C4L vow not to do so anymore.

The missteps by C4L higher-ups only underscore what politics is – a dirty, morally bankrupt system in which everyone seeks to live at the expense at everyone else. Let’s walk away from that great fiction and instead choose to not try to control other people. For more on this, check out Voluntaryism.

What Pete refers to as voluntaryism is precisely what I have always referred to as anarchism in my blog. (Whether or not it is expedient to use that term is a different, albeit very valid question.)

If there is one thing that I have always appreciated about C4L, and Ron Paul for that matter, was their efforts to get out the word and educate people about truth, freedom, peace, noninterventionism, and Austrian Economics. And where anybody anywhere does these things, whether he is a politician or not, I still fully appreciate it.

But I, too, have recently realized that it is indeed a complete fantasy to believe that one could ever accomplish liberty, peace, and happiness for all, or even just a little improvement, through political action.

This recent incident is just another proof that politics corrupts, always and everywhere.

The most convincing piece I have ever seen on the futility of political action comes from Stefan Molyneux and is well worth watching:

In short: If you think it is unrealistic for you to think that you can join your local neighborhood mafia, and turn them against themselves, then don’t even start fantasizing about succeeding in doing that to the mother of all mafias, the government.

… so until I hear a clear and decisive statement from C4L disassociating from this nonsense, I am taking my link to their site off my blog.

Tags: anarchism, c4l, campaign for liberty, voluntaryism

Schiff @ Freedomain Radio

January 29, 2010 · Posted in General Economics · 2 Comments

While Fox, CNN, and MSNBC discuss why independents’ favorability toward Obama during his State of the Union address went up by 3% during the 10th and 11th minues of his speech, and why Republicans disliked the 15th minute, it’s time for a well deserved dose of truth:

Tags: Government, health care, peter schiff, peter schiff for senate, public debt, srefan molyneux

Spending Freeze, Fed Scepticism, Political Gridlock a.k.a. “Hitting a Wall”

January 26, 2010 · Posted in General Economics · Comment

Markets have been sending stronger signals over the past few days:

The Dollar has continued to extend its rally as expected.
US stocks have dropped by over 5% in very short time
Chinese and other foreign stocks are beginning to lose ground again after a short bounce

Economic data most recently indicated that existing home sales suffered the biggest slump in 40 years:

Sales of previously owned homes took their biggest tumble in at least 40 years last month as the impact of a buying spree spurred by a tax credit for first-time buyers waned, according to industry data released Monday.

Those who rushed to meet the original November deadline to take advantage of an $8,000 tax credit for first-time home buyers caused a surge in sales earlier in 2009, but left the market wobbly by the end of the year. First-time buyers, who made up more than 50 percent of sales earlier last year, represented just 43 percent of the market in December. The shift also resulted in fewer sales of lower-cost homes, which first-time buyers typically seek.

After three months of increases, sales of existing homes, including condos and single-family residences, fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million in December compared with the previous month, according to National Association of Realtors data. That was a bigger drop than analysts had expected and the lowest sales rate since August. It was also the biggest monthly decrease on records that date to 1968, according to the industry group.

The December decline “was payback for the tax credit,” said Patrick Newport, an economist for IHS Global Insight.

… once the tax credit incentive vanishes home prices will head south again, this is really something that intuitively nearly everyone I talked to knew from the get go, the only question is how much longer Congress wants to keep extending it. It seems like they don’t have a whole lot more to play with.

Today, the Obama administration leaked plans for a spending freeze:

President Obama will call for a three-year freeze in spending on many domestic programs, and for increases no greater than inflation after that, an initiative intended to signal his seriousness about cutting the budget deficit, administration officials said Monday.

The officials said the proposal would be a major component both of Mr. Obama’s State of the Union address on Wednesday and of the budget he will send to Congress on Monday for the fiscal year that begins in October.

The freeze would cover the agencies and programs for which Congress allocates specific budgets each year, including air traffic control, farm subsidies, education, nutrition and national parks.

Last but not least, there is growing skepticism among lawmakers about Ben Bernanke and of course the Federal Reserve in general:

Even if Mr. Obama and the Senate majority leader, Harry Reid, get the 60 votes necessary to surmount a threatened filibuster against Mr. Bernanke, the Fed appears to have taken a hit to its reputation.

“The public’s confidence in the Fed has been dramatically eroded, and that’s not good,” said Laurence H. Meyer, a former member of the Fed’s board of governors who runs a consulting firm, Macroeconomic Advisers. “The vulnerability of the Fed to a loss of independence is higher than it’s ever been. And the chairman’s credibility with Congress is very low, and that’s not good for the institution.”

… but of course good for the American people, I may add.

Not that any of the things I outlined above will change anything as far as the general direction of government growth and power grabbing is concerned. But in the short run it clearly looks like they are hitting a wall right here and now, at least it is hard to find many signs to the contrary.

As I explained before:

The key thing to keep in mind in all of this: The recent rally, green shoots, and recovery hopes have been created and/or fueled by massive government expenses, and by a believe in the omnipotence of our leaders in Washington.

But government spending sprees, too, will have to come to an end sooner or later. On top of that, all that the recent government programs have accomplished is to get marginal individuals back to the same flawed habits, such as owning unaffordable homes, buying too many cars, etc.

The interest that the government has to pay on its debts when it runs up sky high deficits, and the taxes it will have to raise in order to make those payments, will be hanging over the recovery like a Damocles Sword. The Federal Reserve, too, will be faced with a similar situation. Let’s assume, for the sake of the argument, that lending activity on homes, cars, etc. were to pick up again. What will the Fed do then? Cut interest rates? Add more bank reserves? Surely not, quite the opposite.

Once existing stimulus programs and credit expansion attempts subside, there won’t be much left to pick up the slack. The consumer won’t be able to go back to business as usual unless he goes through a long period of reduced consumption, deleveraging, and savings, a period during which the majority of production and spending inside the US will have to be focused on capital goods, so as to restore a balanced ratio between the production of consumer goods and the production of capital goods.

At the point when these government stimuli wind down, Keynesian clowns will be jumping out of the bushes left and right, and demand that the government take on more debt and spend more money. But at some point their mindless tirades will no longer appeal to an overtaxed and overleveraged populace. Their ivory tower nonsense will be way too far detached from simple realities.

Any temporary recovery we witness now, is likely to be remembered as just that, a temporary phenomenon. All actions taken so far have set the perfect stage for a double dip recession of enormous proportions, the worst possible prolongation of the necessary correction.

If it was our dear government’s objective to repeat the playbook from the Great Depression one by one, then they have indeed succeeded phenomenally.