In an unusual twist from the US’s largest creditor China is demanding the release of Bernie Madoff and want him appointed either as Federal Reserve Chairman or Treasury Secretary immediately. The Chinese demand this to be done because it is becoming increasingly concerned that the current US government is unaware on how to properly run a Ponzi Scheme properly. It seems Beijing is perplexed on how US administration officials and the US media does not seem to understand the difference between annual budget deficits, which is the annual funding gap, versus the reduction of total national debt.
Obviously I am kidding, but there is a chance that the Chinese or other foreign creditors might actually feel this way. Considering the administration started talking about debt reduction and fiscal restraint only to come out with a spending freeze, after they increased those same budgets the year before essentially locking in the budget increases, which will only reduce the annual budget deficit by $250B over 10 years. Notice I said annual budget deficit? That means we are still bleeding red as far as the eye can see and we are doing nothing to reduce the national debt problem we have, which is the largest the world has ever seen, throughout history.
While the administration is at least acknowledging the problem and doing more than Bush ever did they are still doing what politicians do, playing with the words. When regular people hear budget deficit reduction many think this is great, we are paying off our national debt! Wrong. What our wonderful leaders are doing is telling us that they are still going to have to borrow hundreds of billions or trillions a year, but they are reducing the amount of their shortfall on an annual basis. Basically, it means nothing because we are still spending way more than we have. The biggest expenditure that we have is on entitlement programs which everyone admits we cannot cut, but Obama did reduce funding to elderly and disabled housing subsidies which may actually give some credence to the “death panel” argument during the health care debate. I mean if you’re willing to throw grandma out of her home or nursing home than why not have death panels, I am just saying now.
Regardless, what we know is that there is no way any politician will do what is necessary to cut the annual deficit down for real, which means higher entitlement taxes, longer waiting periods for benefits or reduced benefits in general. Instead they will merely grandstand against each other while they slowly, or not so slowly is some projections are correct, destroy the entire country. I do not mean this to be partisan, most know I blame both parties for this mess and pray for a real third party to create some competition in politics, come on 2 parties is not a democracy it is a choice between dumb and dumber. Well, technically we actually live in a Republic anyhow so this basically shows us how limited our politicians are in their actually knowledge when they claim we have the greatest democracy in the world.
The bottom line is that we are adding to the national debt everyday and there is no way to stop it without serious action. The action I speak of will never be taken, not yet at least, but eventually they will happen, if we make it that far. The numbers are simply staggering when you think about it, $14T debt ceiling, $107T in unfunded liabilities and the numbers just get bigger and bigger. The entire US mutual fund industry is $15T so the government could confiscate every mutual fund asset in the US and we would barely payoff our debt, think about that for a minute. In a couple of years that $14T will be much bigger and a large reason that the debt ceiling will have to continually be increased, before the repeal the debt ceiling language that is, is to pay the interest on our debt. The crazy thing is we actually have to borrow money to pay the interest on our debt, talk about insolvency?
To steal a line from Dick and Jane; “Dick, I think were in a bit of a pickle” is completely appropriate right now. We are in the midst of the greatest debt bubble ever created and I have no idea how it will end, but I do know it will end and it will more than likely be very ugly. On an interesting, slightly off-topic, have you noticed the public-private lending facilities being set up with the TARP proceeds? I predicted that would happen a few months ago, I just wanted to say I told you so. Anyhow, there have been lots of interesting happenings lately in politics which I will be writing about very soon. I was incredibly sick for the past 5 days so I apologize for not humoring you with my tasteless jokes, or whatever you call them. In the meantime I am still very bearish, expecting unemployment to be particularly ugly and GDP, well we knew it would be huge, but 5.7%? Expect revisions down to 3%, but if you believe the 5.7% please contact me about fabulous leasing opportunities in Pakistan.
The “Friends of Angelo” strikes again and the self righteous do-gooder Democrats still maintain that this V.I.P. program from Countrywide was no big deal. Look, the Republicans are no better and bear as much responsibility as anyone else for this mess, but at least they are not pretending that they did nothing wrong, well to the degree that the Democrats are. So far the Friends of Angelo program has caught up Senator Chris Dodd, Senator Kent Conrad and now, apparently, Representative Edolphus Towns all who got mortgages through Countrywide all with the special code identifying them as being part of the Friends of Angelo program.
Now, to assume there are no special favors associated with the Friends of Angelo program would be making the same assumption as the Sun revolves around the Earth, it simply can’t be true. Rep. Towns says that this V.I.P. program, only available to politicians, HUD officials and Fannie, had no special features other than faster processing times is just plain stupid, there I said what every other newspaper wanted to say, but can’t. Are we simply dumb enough to believe that mortgage companies offer, as Representative Towns claims, a “frequent flier” type programs for mortgages? Listen, Mr. Politicians, the average American, which we are well aware that you think you are not, get 1 mortgage during their lifetime, 1, so to assume there is any type of frequent mortgage program for people is laughable at best.
I know, the “ethics” committee cleared Senators Dodd and Conrad, of course they did, have you met an ethical politician yet? It’s a freaking joke, the numbers were right there in Dodd’s case he saved $75K over the life of his mortgage because the interest payments were reduced to magically attractive levels. I know math is not Washington’s strong point, but they could have called in TurboTax Timmy to run them for him, well maybe he isn’t the best person, but still Wall Street owes Washington a favor or two so they could send a bean counter up to sort out the problem.
Anyhow, Rep. Towns is so sure he is innocent that when Rep. Issa called hearings on this issue he and all the other Democrats walked out the backdoor like a bunch of 5 year olds, and that is insulting to my 5 year old. Instead, Rep. Towns threw his spokesperson to the wolves and is avoiding the issue altogether which about sums up or representatives in Washington. Now, here is what she says:
“He went to his local mortgage guy and got a normal mortgage,” she said. “The guy’s from Brooklyn and doesn’t have much money and wasn’t prominent enough to be considered a V.I.P. Whether it was later transferred through the V.I.P. program, I don’t know. But he didn’t receive any favors.”
Seriously? Not a guy with a lot of money? How does a guy with not a lot of money afford a home in Brooklyn and in Hillsborough County, Fla.? Rep. Towns also wants to get to the bottom of all of this fraud so badly that he will not even subpoena Countrywide, why? Because he knows a lot of unflattering material will come back, maybe not about him, but perhaps some other people, hint, hint Senators. Perhaps maybe some other potentially embarrassing names may pop up as well that are new to the game, for the love of God, Barney Frank forgot to file a $107K bank account in his annual financial statement.
The bottom line is this, we are not stupid and we know that our politicians are bought and paid for by big business. We know they looked the other way while they sold bad loans to people, but the citizens need to take some responsibility as well. If you made $800 a week you should have known that under no circumstances could you afford a $500K house. However, Congress is making an ass out of itself by chasing ghosts because if you want to catch the real crooks you need to get a panel of real people, like me, with Bernie Madoff leading the charge, hey hate him all you want, but you need a crook to catch a crook, and let’s go after every politician who screwed up. After we are done, I move to pardon Bernie and make him Fed Chairman or Treasury Secretary because the man knows how to keep a Ponzi Scheme going and that’s what the US needs long-term.
So, go on Rep. Towns, Sen. Dodd, Sen. Conrad and get your deals with Countrywide and pretend you did nothing wrong. Pretend that you did not know what V.I.P. meant, you are either incredibly stupid or you are lying, I will flip a coin because it is about a 50/50 shot at this point, but either way you gotta go! I think we have all just about have had enough of the BS from Washington. We wanted change and we got, I don’t even know what we got anymore.
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