A Dangerous Do Nothing ~ The Risk Averse Alert

Thursday, October 07, 2010

A Dangerous Do Nothing

One question raised this week about growing calls for quantitative easing has been what does the Fed see?

Well, it could be the accelerating risk of a full blown collapse of the mortgage backed securities market. Indeed, if ever there were a mountainous supply of prospectively worthless wall paper, MBS are the mother load, particularly now that the degree of fraud involved in their creation is coming public via what is being called "Foreclosuregate."

So, what is up with today's "pocket veto" of legislation whose aim was to make the boo boo all better? Has the President suddenly decided to make good on the spirit of his campaign message, as so many wish to believe?

Please. If he had fired Treasury Secretary Geithner, then, yes, we would have change we could believe. However, boy bailout still lives, as does a grease monkey at the Fed. In case you haven't been paying attention both still are raring to backstop the mountain of insolvent crap sapping confidence, which all the more by "Foreclosuregate" appears at grave risk of collapse.

Does not the President's veto, then, threaten all that Geithner and Bernanke purpose to do?


And no...

Think back to 2008. How did this bankrupt debt trap otherwise thought a financial system come to deeply sink its hooks into the lender of last resort? It was via an historic crisis.

And how was this crisis precipitated?

When Lehman Brothers went bankrupt, nothing was done. The company was let go, come what may.

So, I give you today's "pocket veto" ... and a lame duck Congress grizzled in crisis management. Feces are about to hit the fan.

Here are some other reports of interest...
DC Waking Up to Escalating Foreclosure Train Wreck...
Naked Capitalism, 10/7/2010

Foreclosure Fraud Reveals Structural & Legal Crisis
Big Picture, 10/5/2010

The Politics of Foreclosure
CNBC, 10/7/2010

Fast Money
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