VIEWS & COMMENTARIES...
 
What Will Mac ’n’ Mae Cost You and Me?
Morgenson, 08/24/08
The inevitability of a taxpayer-funded bailout of Freddie Mac and Fannie Mae, the hobbled mortgage behemoths, shook investors last week, and shares in both companies plummeted on fears that existing stockholders would be wiped out...Read More >>

It's More Than Fannie and Freddie
John Mauldin, 08/22/08
Yet another crisis confronts us, as we will have to deal with the aftermath of a rather large number of bank failures over the next year, which is likely to overwhelm the ability of the FDIC to insure your bank deposits. Today we look at the...Read More >>

Two-Cent Pennies: a Window on Inflation
Tyler A. Watts,  08/21/08
[A good primer on the evils of fiat money - for the beginning 'students' among our friends.] Johnny Carson might have quipped about the economy, "Inflation is so bad these days… that pennies are now selling on the street for two cents."..Read More >>

The Real Cost of a Full Bailout
Don A Rich, 08/22/08
A recent study from the Congressional Budget Office (CBO) has zero credibility. It pegged likely taxpayer losses in the Freddie Mac bailouts at $25 billion. For those with a sense of history, it is worth remembering that the S&L bailout had a...Read More >>

Washington Is Quietly Repudiating Its Debts
Gerald P. O'Driscoll, Jr. 08/22/08
Will the U.S. Treasury repudiate its obligations to its creditors, be they citizens or investors around the world? Most observers would answer "no" without hesitation. But Congress, with the complicity of the White House and the Fed, has...Read More >>

An economic Cassandra whose predictions are coming true
Stephen Mihm, 08/20/08
..."[T]he true cost of the housing crisis will not be a mere $300 billion.. but something between a trillion and a trillion and a half dollars.. We have a subprime financial system," he said, "not a subprime mortgage market." This might be...Read More >>

The Endgame Nears For Fannie and Freddie
Barrons, 08/18/08
After accounting for deferred tax assets and generous asset marks, Fannie and Freddie each may have a negative $50 billion in asset value, and little prospect of digging themselves out of the hole. IT MAY BE CURTAINS SOON FOR THE MANAGEMENTS..Read More >>

Dysfunctional Pricing Backdrop:
Doug Noland, 08/15/08
The divergence between underlying fundamental developments and market trading dynamics became only more striking this week. July Consumer Prices were reported up 5.6% from a year earlier, the largest y-o-y increase since January 1991...Read More >>

The Great Gold Robbery of 1933
Thomas E. Woods,  08/13/08
It's been 75 years since the federal government, on the spurious grounds of fighting the Great Depression, ordered the confiscation of all monetary gold from Americans, permitting trivial amounts for ornamental or industrial use. This happens to...Read More >>

Going for the Heart
Rockwell,  08/12/08
The heart of the modern state is the central bank. By heart I mean the very thing that makes it work, and without which the modern state would quickly wither and die. It is the thing that makes the money. As such, it purports to be our...Read More >>

The Anatomy of Foreign Exchange Intervention
Jim Sinclair, 08/13/08
We have just witnessed the first massive act of intervention coming off the .7199 USDX and $1.5974 Euro. We have covered why this happened and its meaning in terms of the instatement of currency parities, albeit this time on a floating basis..Read More >>

The Case For and Against the Dollar
Axel Merk,  08/13/08
Given a sharp drop in euro holdings in the U.S. Treasury’s Exchange Stabilization Fund, it seems that the U.S. Treasury may have intervened in the currency markets, possibly out of fear that a more significant run on the dollar could have...Read More >>

Stage Two of the Gold Bull Market is just Beginning
Ambrose Evans-Pritchard, 08/12/08
A war breaks out in the Caucasus, pitting Russia against a close ally of the United States. Inflation reaches a new peak in the euro-zone. The CPI reaches the highest in Britain since Bank of England independence. Rampant inflation sweeps the...Read More >>

Lost Innocence
Sean Corrigan, 08/11/08
While the headlines of the day are filled with the story of Congress' rescue of Fannie and Freddie (in a bill which seems to have been stuffed with more of what the Americans call "pork" than a sausage factory), for this observer the most exquisite...Read More >>

Burst Bubble: Energy or Speculator?
Doug Noland, 08/08/08
Recent extreme global market volatility is part and parcel ...[of]...Heightened Monetary Disorder...The Massive Global Pool of Speculative Finance has Run Amuck. The bulls will celebrate the rally, yet markets this unstable are prone to...Read More >>

Dollar Rally? Mystery Solved
James Turk, 08/07/08
On July 15th the US Dollar Index closed at 71.87, the lowest close since reaching its record low in April. This index was in the process of breaking down, and in fact it had actually fallen out of its uptrend channel on the following char...Read More >>

Keynes (and Lenin!) Not Always Wrong
Posted 08/08/08
In his Economic Consequences of the Peace, John Maynard Keynes wrote: "Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency.  By a continuing process of inflation governments...Read More >>

Getting Closer to Debasing the Currency
Polleit, 08/07/08
Preventing the Free Market from Doing Its Job. Economically speaking, the so-called credit market crisis is, first and foremost, a reallocation of property rights. Overstretched borrowers default on their obligations. Lenders, who have made unwise..Read More >>

Is the U.S. Banking System Safe?
Quinn, 08/05/08
The U.S. banking system is essentially insolvent. The Treasury, Federal Reserve, FASB, and Congress are colluding to keep the American public in the dark for as long as possible. [Notable Quotes from Top Financial Solons]: Treasury Secretary ...Read More >>

General Motors and the Intellectual and Moral Bankruptcy
of Wall Street  Coster-Englund, 08/05/08
As punctuated by General Motors’ second quarter (6/30/08) loss of $15.5 billion, General Motors is a company in financial distress. In its attempt to survive the current economic milieu, management has been looking to throw excess weight...Read More >>

Whitney: Credit crunch far from over
Jon Birger, 08/04/08
The star analyst tells Fortune magazine that housing woes will force banks to keep taking writedowns. The credit crisis is far from over, star analyst Meredith Whitney tells Fortune magazine in its upcoming issue. Whitney, who audaciously...Read More >>

Speaking in public
"Bill H." (An astute retired market veteran), 08/04/08
To all; it struck me this morning while listening to 2 bearish guests on CNBC that someone soon will make the public leap regarding the Dollar and the broken financial system. This morning Merideth Whitney [the analyst who has been pelted...Read More >>

Cartoon Capitalsim
Bill Bonner, 08/01/08
Last week, purely in the spirit of mischief, we brought up a sore subject: America's largest mortgage finance companies, Fannie and Freddie. The two have so...Read More >>

Lawrence Lindsay's WSJ Op-Ed Blasts Paulson
Posted on 08/04/08
In his Friday, August 1, opinion piece, Hank Paulson's Fannie Gamble, former Fed official and Bush economic advisor Lawrence Lindsay offers a strong critique of Treasury Sec. Henry Paulson's and the administration's supported 'housing bailout.' Recall that Mr. Lindsay was effectively fired from the Bush...Read More >>

The Uppers
Doug Noland, 08/01/08
...[I]t is my view that the greatest – as well as least appreciated – Bubble Economy Excesses were at The “Upper-middle” to “Upper-end.” It is in The Upper-ends where years of Credit excess had the most pronounced effects on incomes...Read More >>

Silver and Monetary Considerations
David Morgan, 07/31/08
Hyperinflation in Germany. Many of you are probably too young to appreciate the full impact of the hyperinflation in Germany after WW1. It was devastating. The the amount of paper that was equal to one silver dollar, or ¾ of one troy ounce...Read More >>

More Than a Helping Hand
James Turk,  07/29/08
One of the basic functions of a central bank is to act as the 'lender of last resort'. This facility is used to keep banks liquid during a period of distress. For example, if a bank is experiencing a run on deposits, it will borrow from the central bank..Read More >>

The Pin in the Monetary Hand Grenade
Bill Bonner, 07/31/08
Yesterday, George W. Bush signed the housing bill – in which up to $300 billion is to be spent bailing out naïve homeowners, caddish mortgage lenders and Wall Street geniuses. It is packaged as a reserve against catastrophe. If everything is...Read More >>

Curing US Inflation, Zimbabwe Style
Adrian Ash, 07/31/08
You'd be forgiven for thinking they planned it together last night. Four out of the top nine headlines on Yahoo's financial homepage today came straight from the press departments of the US authorities. Fed Extends Emergency Loan...Read More >>

Has Deleveraging Even Begun? (Not for the Fainthearted)
Yves Smith, 07/28/08
It no doubt seems absurd to question the idea that deleveraging in underway. We've had three heroic central bank interventions, starting in August 2007, to reverse seize-ups in the money markets. The asset backed commercial paper...Read More >>

Lies and Truth
Contributed by Friend R J Ralls, 07/29/08
There are people who are more comfortable with lies because the lies help protect them from the truth they fear. Then there are people who are more comfortable with the truth because if they know the truth they can use it to help protect...Read More >>

Freddie, Fannie `Fair Values' Hardly Look Fair
Weil, Bloomberg, 07/28/08
Forget everything you've read about how woefully undercapitalized Fannie Mae and Freddie Mac are. The situation is much worse. Unlike other companies, the two government-chartered mortgage financiers publish quarterly fair-value balance...Read More >>

Too Big to Fail, or to Survive
Poole,  07/27/08
Critics of the Congressional housing package complain that we are now committing taxpayers to huge new outlays to rescue Fannie Mae and Freddie Mac. That view is wrong: Congressional inaction over the past 15 years had already...Read More >>

NAB Will Shock Wall Street
Gottliebsen, 07/25/08
The National Australia Bank's decision to write off 90 per cent of its US conduit loans will have dramatic repercussions around the world. Wall Street will be deeply shocked when they understand the repercussions of what NAB has done. It is...Read More >>

A GSE Perspective
Doug Noland, 07/25/08
...[W]ithout the GSEs as buyers eager to pay top dollar for mortgages and MBS – especially in the event of marketplace disruption – the hedge funds, Wall Street proprietary trading desks, and others would never have had the gumption...Read More >>

Fannie and Freddie: Playing with a Stacked Deck
Bonner,  07/21/08
As recently as February of this year, Russian officials cleared the way for two of its sovereign wealth funds, the Reserve Fund and National Wellbeing Fund, to invest in various foreign bonds, including those issued by the twin towers...Read More >>

Why No Outrage?
Grant, 07/19/08
Through history, outrageous financial behavior has been met with outrage. But today Wall Street's damaging recklessness has been met with near-silence, from a too-tolerant populace, argues James Grant "Raise less corn and more hell,"...Read More >>

Defining Inflation (One More Time)
Saville, (Brief Excerpt)  07/14/08
Owning gold is the most logical way for an investor to protect and grow his/her wealth at a time when inflation is ravaging the financial landscape. The global bear markets in equities and credit are perceived to be deflationary, but this...Read More >>

The Fannie and Freddie doomsday scenario
Katie Benner, 07/10/08
It's time to wonder what would happen if Fannie Mae and Freddie Mac failed. Here's a scary, and relevant, question to ponder as the housing market continues to slide: What would it take for the government to step in and help Fannie...Read More >>

We're All Homeowners: Nationalization of Fannie,
Freddie Unavoidable   Task, 07/08/08
Fears about Fannie Mae and Freddie Mac retreated somewhat Tuesday after their federal regulator, OFHEO Director James Lockhart, said new accounting rule changes should make "no difference in the risks of the two firms...Read More >>


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