Financial Groans and Creaking

(from my private newsletter)

It’s a tough and confusing time out there in the real world – employment is scarce, credit is tight, the dollar has lost muck of its value in the world, food costs are rocketing and gas/oil has not come close to reaching its zenith.

Several folks have told me that this rag should focus more on politics – that this may be the most important election held in this country in decades – that it is literally life or death for our democratic institutions - and that I should focus on bringing out the vote for their choice of who should lead us.

Well, that probably won’t be happening much on these pages. In the first place, all politicians appear to flip-flop day to day and various parties are screaming at us via every possible media touting ones benefits and the others flaws with abandon and not a whole lot of solidity.

I could tell you who would undoubtedly be the better president but they mostly aren’t running and are not likely to. The simple reality is that anybody who wants to be the leader of this country with what has been done to it is some kind of masochist with a massively inflated ego. Whoever wins won’t be getting a bouquet of sweet smells other than the possibility of filling their pockets on the way down.

This issue is, once again, more about the results of policies rather than the apparent authors of those policies or the ‘proposed’ cures. The financial system is reeling, dazed and floundering. The corner managers in this epic battle seem to have opposing measures on how to fix what and the referees, in desperation, are changing the rules and participating in a hostile takeover.

What really bothers me right now is that the government, who hasn’t handled much of anything well in a long, long time, is now taking over the reins of the very complex and international financial system they allowed to run rampant in the first place.

This financial simpleton that is your editor couldn’t possibly explain what is being done by who to who with any clarity. What I can tell you is that, in the middle and the end, you, my fellow citizen, will foot the bill.

This week IndyMac Bancorp failed. They weren’t much of a brick & mortar local bank of checking and savings accounts – their finances were mostly in the mortgage world and are the foster parents of failed Countrywide.

Still, they did have those checking accounts for average folk and the FDIC closed them down & seized their assets at 3PM on July 11th (1). This bank, totally unknown to me, became the 2nd largest banking failure in U.S. history!

IndyMac is the 5th bank to fail this year (there were only 3 last year) but the FDIC is planning for another 90-150 to fall soon and IndyMac wasn’t even on their list. Meanwhile, everybody who can get on some sort of media is pointing fingers at who is responsible which is most often somebody other than themselves.

FDIC probably did a good thing for the most part but I worry about the trend. Fannie Mae and Freddy Mac, the big ($5 Trillion) are in difficulty and though they were created by the Federal gov, aren’t ‘officially’ Federal, they have now made these 2 ‘companies’ entry to the no-interest bailout money that is presently filling the coffers of every scam artist and hustler in the extended financial tree – except for the homeowners, the working middle class and un or underemployed, of course.

The results of the upcoming election will be decided by folks like you (and/or electronic voting machines) and I leave it to you to figure out what is to be done. I still say to vote down anything you don’t fully understand and vote out every incumbent that you don’t really know where they stand or how they voted these last 8 years. If they've been around for 4 or more years and you can't say with certainty about where they stand - that's a seriously bad sign.

Me, the simpleton, is still doing a write-in for Ron Paul. His cures would be very difficult for the system to swallow – and very hard on most folks – but they would be Constitutional (you remember the Constitution, don’t you?) and are the kind of drastic changes that are so desperately needed to bring us back to a balance that we can understand.

Tilting at windmills has always been a comfortable pastime for me. I don’t have the answers but my keen hearing clearly detects the groaning of timbers, the shrieking of metal and the trembling of domino’s.