Economy

This is your
“must read” article of the day. Bennet Sedacca has become one of my
very favorite writers on this unfolding credit mess.

In this
article, he details the process by which denial and then deception are
used, how they can be spotted, and which companies are pretty much
cooked.

Bloomberg

– Former Bank of England
policy maker Willem Buiter sparked the biggest debate at the Federal
Reserve’s annual mountainside symposium, saying the central bank pays
too much heed to the concerns of financial institutions. 

WSJ

– Will the U.S. Treasury repudiate its obligations
to its creditors, be they citizens or investors around the world? Most
observers would answer "no" without hesitation. But Congress, with the
complicity of the White House and the Fed, has arguably embarked on a
stealth repudiation.

Oh, this is
nice. Now the FDIC is getting into the mortgage business. This is a
serious departure from their past activities, skill sets, and possibly
charter. To date, we have the Federal Reserve accepting bad mortgages
in exchange for cash and Treasuries; the FHLB sporting a $1.5 trillion
mortgage portfolio, where it was barely half that a few years ago; and
Fannie and Freddie, with absolutely frightening growth in their own
guaranteed and retained mortgage portfolios. In short,
every possible government program is already neck-deep in this mess and
steadily getting in deeper.