Wednesday, November 19, 2008

OBAMA doesnt have a clue about DEFICIT SPENDING ... showing how ignorant and dangerous he truly could become

"Air America is pointed nose down at 60 degrees in a full-power dive and we're dangerously close to structural failure of the wings. If our trajectory is not altered now our nation is going to play economic lawn dart at 600mph - possibly within weeks, likely within months.

We have squandered more than $2 trillion that has been blown via commitment or direct expense down the rathole of coverups, handouts and bailouts, and we will need that money in the next couple of years to feed, clothe and shelter our people. Thanks to Bernanke, Paulson and Congress its gone.

Barack Obama made the statement that "deficits are not important" on 60 Minutes Sunday.

He is going to get a rude surprise; the President of the United States is subservient to the bond market - specifically, he is subservient to the willingness of foreigners to finance our deficit spending. Embroiled in their own mess this capacity is quickly eroding, and over the last ten years our Treasury has put itself in the unenviable position of shortening the maturity of its outstanding debt (to get lower interest rates) which raises the potential of a rollover funding "emergency".

I have said it before and I'll say it again - President Obama is going to find himself on the wrong end of reality, and be forced into austerity measures that neither he or Americans are going to like one little bit. I wouldn't want his job when he is forced to go on Prime Time TV to tell America that we simply can't finance our profligate spending any more and that serious, real, across-the-board cuts are going to have to be made to our federal budget, entitlements and "promises" - that we simply cannot keep those promises. Historically there is only one other way out of the trap we are now in.

Start a war. A really big one - big enough to kill a couple million Americans (reducing competition for jobs) and destroy a trillion or more dollars in American "stuff" (that will have to be replaced.)That option would truly suck.Oh, and if you think that the FDIC presentation today on CSPAN is a model for "preventing foreclosures", you might not want to read this:

"Industry evidence indicates that in a majority of instances loan modifications simply delay the timeline from default to foreclosure but don't prevent them from taking place," Nathaniel Otis and William Clark, analysts at KBW, wrote in a note to investors on Tuesday.

For the industry in general, after mortgages are modified roughly 25% go delinquent again after just one post-modification payment and more than half end up delinquent after several post-modification payments, Lender Processing Services told the analysts. So much for "putting a floor under home prices", "keeping people in their homes" and "an effective program to prevent foreclosures."I know, I know, telling the truth is difficult in front of Congress, as we've seen, and Congress is too spineless to issue a contempt citation (or ten.) They sure don't want truth-tellers on their panels, or they'd have invited people like Mish and myself to come testify!

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