Thursday, July 17, 2008

FDIC Fails. WaMu Bank Refuses to Cash Federal Check Backed by US Treasury?

The FDIC (Federal Deposit Insurance Corporation) fails across the board.

FDIC's Bovenzi cannot understand why people hesitate to take the government's Monopoly-money IOUs, lamenting that he is "deeply troubled by reports that there are financial institutions that are refusing to honor or are placing excessive holds on IndyMac Federal checks."

So much for the "full faith and credit" of the US government.

Sunday, July 13, 2008

FannieMae FreddieMac $5Trillion Bailout for Insolvency Crisis

Bernanke and Paulson Declare US Economy Doubleplusgood

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry "Hank" Paulson have tried to jawbone the financial bubble along with denials of recession and with pollyanish predictions of second-half recovery (if we are not in recession, recover from what?--oh yes, the "slowdown"). The "nothing to see here" denials continue despite all evidence to the contrary and even as they beg for expansive new powers.

"Speeches by Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and JPMorgan Chase & Co. Chief Executive Jamie Dimon gave the market some reassurance about the financial sector. . . . The market was relieved to hear Bernanke say in a speech the central bank might extend its lending efforts to investment banks . . . Dimon said "the future is very, very bright," but that "I do think we have some very serious issues to face." . . . Paulson, meanwhile, made an upbeat assessment of the government's efforts to prevent the volume of mortgage foreclosures that touched off the credit crisis last year, although he also said he expects foreclosures to continue. . . . The Treasury secretary also said he was pleased at steps taken by Freddie Mac and Fannie Mae to raise money: "Fresh capital will strengthen their balance sheets and allow them to provide additional mortgage capital, as they balance their responsibilities to their mission and to their shareholders." . . . All that helped stocks stage a late-afternoon rebound after choppy trading throughout most of the session." ("Dow ends up 152 on decline in oil, Bernanke talk," Associated Press (AP), 7/8/08)

Ignore That Iceberg, Crashing Sound, and the Water around Your Ankles

The Fed et al. are trying to keep the music playing and delay deflation long enough for insiders to dump their toxic waste onto the American taxpayer through the Term Auction Facility (TAF), Fannie Mae (Federal National Mortgage Association, FNMA), Freddie Mac (Federal Home Loan Mortgage Corporation, FHLMC), etc.

Government tactics are akin to getting Titanic's first-class passengers into the lifeboats, while coaxing average families out of the lifeboats by telling them that the ship is merely undergoing a temporary structural adjustment in a new flotation paradigm.

Bernanke and Paulson continued the farce in 7/11/08 Congressional testimony as a $5 Trillion insolvency crisis over Fannie Mae and Freddie Mac (which they had ignored for years) reminds us that the LAST people we want in charge of financial accounting are government.

This photo of Bernanke and Paulson in Congressional testimony (hat tip: Housing Panic) inspired the image further below: