The news is not good if you’re the portfolio manager for Fidelity Investments. It seems that in the last quarter Fidelity convinced that financial stocks had hit bottom, loaded up on bank stocks and today they own over 3% of Citigroup. In mid 2007 Citi was a $55 stock. Today it is a $2.50 stock. That’s a drop of 95% in a year and a half. Another 5% and it will be zero which is more than it is worth but fear not, the economic keystone cops in the Obama administration applying failed Keynesian concepts are continuing to shovel money at insolvent banks, insurance companies, mortgage monsters like like AIG and fred and his bloated ugly misbegotten sister Fannie. It hasn’t worked and their solution, keep shoveling! Barak Obama , sweet man that he is has made disastrous choices picking his economic cabinet of Keynesian economists who have learned nothing and forgotten nothing. The last thing a president needs in an economic crisis are economists, bankers and Wall Street financiers advising him. They are destroying a presidency which has barely begun. They hum the Keynesian mantra of economic growth by extending credit and debt and “stimulus”. Paulson said the problem was a “liquidity crisis” and he flooded the markets with liquidity borrowed from our children. Paulson, Bernanke, and Bush said we needed more lending, more credit, more debt. It was never a liquidity crisis. It was a debt crisis but they didn’t get it and Obama and his cast of bozo economists don’t get it. It has not occurred to them that the very crisis at hand was caused by cheap credit, massive debt assumption and mindless consumption combined with a negative savings rate . Common sense would seem to indicate that the solution is not more of the same, turbocharged in overdrive with an afterburner. It has not occurred to them that people who are broke and over extended will not want to borrow. It has not occured to them that people in a half million dollar house worth $250,000 who are behind on their payments may not care if their new mortgage payment is only 31% of their income if they have no equity or no job. And what about the hardworking dummies who also live in houses underwater who HAVE been making their payments on time? No help for them. Just like it is no help for solvent banks. Give money to the failed banks, the failed homeowners. And borrow if from our children! They know that the latest in a series of boneheaded poorly thought out rescue plans for the housing problem isn’t a rescue of them, it’s another rescue for the mortgage companies and banks. The White House and Congress are solely focused on saving the very people who are their constituency:Wall Street corporations and the banks. The American people are not their constituency and they know it . They are focused on saving insolvent banks and corporations . Of course not all politicians believe this but the powerful ones do and therein lies the problem. If the banks and insolvent insurance companies are allowed to fail, a lot of wealthy investors, sovereign wealth funds, mutual funds and hedge funds and other corporations will lose a lot of money and this shadow government is going to do every thing it can to save its sorry hide, even if it means turning a bad recession into a worse depression or even worse, tearing the fabric of our society to shreds.
Published by Rendezvous Mountain Farm
I was born in Montana and raised in a dozen Air Force SAC bases. I attended Holy Cross,West Point and UNC in Chapel Hill(MD"71). Army doc in the last years of the Viet Nam fiasco. My wife and I live in a log cabin I built from local timber in Wilson Wyoming in 1976 . I've done a dozen different jobs including construction, boat building,magazine writing and commercial fishing and retired from the Emergency and Operating Room in 2004. We manage a small diversified organic farm including leased land which totals about 50 acres in the beautiful alpine setting of the Jackson Hole valley. We raise a variety of livestock which includes some rare and diversified breeds of animals and poultry. We grow most of our food and forage. Our land is irrigated from Lake Creek and the Snake River and we raise and bale our own organic hay. View more posts