AMERICA’S ECONOMY RISKS THE MOTHER OF ALL MELT DOWNS…The Financial Times delivers the lowdown on the actual potential magnitude of America’s financial decline, based upon the formerly controversial (now operational) 12 step path to recession and melt down, as forecast in 2006 by Nouriel Roubini of the New York School of Business.“Recently, Professor Roubini’s scenarios have been dire enough to make the flesh creep. But his thinking deserves to be taken seriously. He first predicted a US recession in July 2006*. At that time, his view was extremely controversial. It is so no longer. Now he states that there is “a rising probability of a ‘catastrophic’ financial and economic outcome”**. The characteristics of this scenario are, he argues: “A vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe.”********TREATING DEATH AS A COMMODITY…Not sure exactly how this works, but it shows how speculators will take virtually anything and try to convert it into a quick investment profit. It is a tendency that has come to haunt us in the subprime world.********THE SUBPRIME MESS GRAPHICALLY (AND COMICALLY) EXPLAINED….This PowerPoint link will save you reading whole chapters of “Web of Debt” . . . and give you some much needed laughs.********U.S. CREDIT MARKETS COLLAPSING…From Martin D. Weiss, Ph.D., in Money and Markets newsletter —“The U.S. credit markets, the giant growth engine that powers the American economy, are collapsing … with few credit sectors spared from damage, few investors escaping losses, and little hope of federal action that’s quick or strong enough to make a major difference…….. Without the triple-A rating, their whole reason to exist falls by the wayside: They cannot enhance the credit of bond issuers. They cannot do more business. They may as well close their doors and go home.”********U.S. COMPTROLLER GENERAL RESIGNSOne of the last few officials working hard to get out the truth about budgets and astronomical looming entitlements has walked away from it all. David M. Walker of the Government Accountability Office resigned Feb. 15th.********BERNANKE: “YOU’RE ALL DEAD DUCKS”… He did not really say that, but Mike Whitney’s characterization of Bernanke’s recent testimony says he might as well have:“Even veteran Fed-watchers were caught off-guard by Chairman Bernanke’s performance before the Senate Banking Committee on Thursday. Bernanke was expected to make routine comments on the state of the economy but, instead, delivered a 45 minute sermon detailing the afflictions of the foundering financial system. The Senate chamber was stone-silent throughout. The gravity of the situation is finally beginning to sink in.”********PAULSON’S WILD RIDE ON THE HINDENBURG: “THE WORST HAS JUST BEGUN”Mike Whitney again, watching the spin unravel into more of a confessional, as the Treasury Secretary unveils “Project Lifeline”, a rather thin safety net to buy the foreclosed some time, and revealingly answers some hard questions from reporters. For example:Reporter: “Sir, is the worst over, yet? Will 2008 have fewer foreclosures?”Secretary of the Treasury Paulson: “In terms of sub-prime and the resets, the worst isn’t over. The worst is just beginning…. There’s close to 2 million adjustable rate mortgages where the rate is going to be reset over the next couple of years.”********Fortunately, there is another alternative. It’s all in the revised, updated “Web of Debt” — available now! http://tinyurl.com/yqbjth
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