Monday, December 19, 2011
the big truth....my first attempt at blogging, give feedback
in case you missed it there was another awesome shouting match this morning on cnbc between liesman and santelli....the topic, as usual, was where to place the blame for the financial destruction and what policy decisions would best combat the current condition...I've been told several times on air that, at this point, its useless to play "the blame game"..i cant find words to describe how strongly i disagree. the blame game isnt just fun for the whole family it is also a valuable way to help prevent future policy mistakes..the internal psychological problem that people seem to have, is that once they choose to be on team "banks are to blame" they debate the point so often that they eventually, in their own head, absolve politicians from any culpability...the same of course happens in reverse on team "the politicians are to blame"...the bottom line is that both sides should bare tremendous responsibility as they clearly acted in cahoots along with the rating agencies and overreaching individuals.....the grease that kept the whole thing running smoothly was a fed that kept rates artificially low for decades encouraging leverage and over extension at all levels of the economy...........now here's the only point that's worth remembering.........of that list of culprits, only politicians(and the fed) were created and sworn to protect the publics interest...blaming the banks is like blaming the other man for your wife's infidelity...of course he was intricate to the process but he never took a vow...simple enough...blame them all...but blame the politicians more...glad we had this talk.........the conversation then shot past mf global(which rick blamed on too low of rates..mostly agree) to policy decisions...in a nutshell,steve wants to write down the loans, rick wants to let the mortgage holders drown...i love both those guys but they're both wrong...the economy reaching escape velocity is dependant on the housing markets stabilization and recovery, and 2 factors are keeping this from happening; excess inventory and the inability of many, at risk, mortgage holders to refi at current levels...we cant control inventory but we can pass policy to allow mortgage holders to take advantage of current rates...its unusual for me to have such a liberal opinion on this matter and i feel as though i should shower aggressively after writing this...but its probably our best shot....dont respond anytime in the next half hour as i will be scrubbing...have a great night...jim
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Nice work Jim, I enjoy your work on twitter and cnbc as well. Your lack of cheerleading is refreshing. The fact is that at the core of all of this it's the politicians. They are the ones who give the Fed the dual mandate. This housing bubble has been building for decades, but they turned on the afterburners in the Clinton years with the artificially low interest rates. I love how folks brag about the economy in the Clinton years, completely ignoring the context of the easy Fed policy. I also love how they kill Bush for the crash, as the bubble finally bust. I also love how we Americans kill the Europeans (read "Germans") for how they are handling their ordeal now, as if we had nothing to do with creating their problems, and s if kicking the can down the road its the only logical way to take responsibility for anything. Your theory about housing leading us out of this is accurate, but clearly that will be a year or 2 too late. Buckle up Jim, this is going to get bumpy quick.
ReplyDeleteWait, what was I thinking... Uncle Ben will come to the rescue before that
ReplyDeleteI don't read bloggers who use more .... than I do. And I use a lot. ;)
ReplyDelete@fundmyfund
I like ur analogy, Jim! unlike the banks I wouldn't screw over "the american public" for the cheap thrill of easy profits-- but your R right they didn't have the moral obligation to do right by us. The fed should take more blame for screwing all the "savers" and bailing out the debtors. thx for taking the time to blog:-))
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