Tuesday, January 05, 2010

The Emperors New Clothes

The market rally is farce, just like the "strong" housing numbers are a joke. The markets are being propped up with our own tax dollars that the IBanks were bailed out with last year.

The housing markets only have decent numbers to report because of the $8000 tax credit and the government's unending willingness to underwrite bad loans through FHA, Fannie Mae and Freddie Mac. Take away either mistake or better yet both and we would see housing sales go through the sub-basement floor. Almost instantly we would see home prices fall to the Case-Shiller 100 year trend line which follows the curves for inflation and personal income growth. Clinton expanded the CRA and GWB continued following through on the idea, which is now showing itself to be a miserably failed experiment. Its time to make housing affordable, the right way, the natural way. Truly affordable housing, would be the best thing that could possibly happen to our economy and a real economic rebound. Money tied up buying over priced, artificially inflated home prices is not productively used money. Its essentially wasted money, because its money that isn't available for investment and consumption of manufactured goods.

I expected better from Harvard (our President) and Hopkins (Turbo Tax Timmy) men, but I guess they have an alternate agenda that does not include serving the tax payers best interests. Sadly, the White House and Capitol Hill have ceased to be where our country's best and brightest have tried to go. Now its the domain of special interests, the the party of no ideas and the party of bad ideas.

The Hope our President promised us during his campaign is proving to be false and fleeting. The statute of limitations on blaming George W. Bush is running out. Eventually, even the most strident supporter will have to reconcile with the reality of the situation.

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