Obama's economic advisor is already moving to get ahead of this. He sees the issue in simlar terms -- short video here.

http://calculatedrisk.blogspot.com/2008/....

I would vote for any politician of any substance at this point. My two cents on American politics is that it has degraded to the point where having any position of any substance is a liability as it allows your position to be blasted apart by the opposition without any call from the media or elsewhere for a better solution.

We need a watershed leader at this point who comes out with a strong and concise position on what they are going to do put this country back on track (i.e. Contract with America), get elected on that position, and carry out that position. Until then it'll be more of the same.

Be a better American, stay independent and make every candidate work for your vote, if everyone did this then we would not be in this mess.

I totally agree BW. I vote irrespective of party. Probably off topic though.

Thanks again Karl for all you do to spread the word.

My biggest issue for a long time has been to balance the budget and to implement a fairer system of taxation.

If we could convince former Speaker Gingrinch to come back to public service along with some other deficit hawks like John Kasich, they could bring about a second revolution and they could use all the same collateral.

'Renewing the Contract With America' - is all about having a government that works for the governed and not special interests.

I was disgusted by the Farm Bill this week ($300 billion). Huge giveaways to large corporate farms, when the subsidies are intended to help smaller farmers. They didn't eliminate the ethanol subsidy, but they jiggered with it. 6 cents of the subsidy was taken away and redirected to 'cellulosic ethanol initiatives'. I've never understood what 'initiatives' are but it seems like pork for well connected corporations again. Like Archer Daniels Midland, etc...

I was further disgusted with the War Funding bill that was so loaded with poison pills that it has to be vetoed. I mean why even bother passing anything if you are going to slap immigrant amnesty on the bill just to ensure it will never become law. The Democrats will fund the wars eventually and all the symbolic opposition isn't really serving me very well.

At least the time they spend on pointless grandstanding keeps them from doing more damage, like dreaming up and passing more bailout bills.

Take care, Mike

Gen,

You're definitely saying the right thing to the rep. party - though i cant possibly imagine the biggest perpetrators (and/or enablers) of this mess turning around and listening to what you have to say.

In the wishful hope of being surprised - nice try.

Maybe its time for a 3rd party to come along with the kind of spirit that the ORIGINAL republicans had...........

Well, I am faxing a slightly-modified version of this to every Republican in Congress.

We'll see...

I think there was a point in the BSC hearings where one senator asked what collateral was given and Bendover refused (politely) to answer. He then mumbled something about how if the senator wanted to send over an aide they would show him etc. Bendover should have been nailed right then and there.

Newt had his chance and he squandered it. He is now trying to rejuvenate his political career but it ain't gonna work- - people have long memories. He is the poster boy for hypocrisy in the GOP- - the sooner he goes away, the better for the party.

The GOP is going to get vaporized in the Nov. elections. Karl's recommendations are dead on, but the party leaders have their noses too deep into the trough and have no interest in exposing the fraud. Its going to take a wipe out of the party in Nov. for a new breed of leadership to emerge, but Karl's right, get used to 40 years of rebuilding. You reap what you sow.

Intersting chart:

Karl,

How did you come by that gavel from Newt? Just curious.

I have a history of being active in Republican Politics.

KD,

Your grasp of markets, politics, IT, etc, etc. truly amazes me.

Lemonaid,

Very interesting graph.

Guess that tells us that everything thing will be done to keep the indices high from now till Nov.

And that we're a bit on the edge to be betting against it - LOL!

I FEEL like they want to pump it up through Nov. for the sake of the Republican Party if nothing else - but i just cant get myself to go long or even flat........

Well, to me it's very simple. My vote doesn't mean a helluva lot, and this year it will mean even less, as gadzillions will vote their pocketbook (translation: look inside and see how much folding green is in there, if there's not much, vote out the incumbent party). The moronites will incorrectly deduce that the pot of gradually-increasing temperature water they find themselves bobbing in is the fault of the repupblicanistas, and they will vote, en masse, for either Monica Lewinsky's boyfriend's wife, or "Bassetball Jones." So, my republican vote is, in large measure, cancelled by the gadzillions who can barely spell "Democrat."
Won't matter, imo. What's coming is pretty much fore-ordained since the April Fools Day Treason, so you really don't have much of a choice this election. McCain is truly not much better than the other two, but he will probably get my vote, if I bother, since his party tends to at least TRY to keep some semblance of our constitutional republic in place. The lib-trash are actively trying to erode what's left of it.

KD - I'm probably the most politically liberal reader on TF (given what I read in the forum). Still, I think everything you wrote on this ticker is true. It's not just a good idea for Republicans to take the actions you propose, but it's the right thing to do by far. I only wish some lefty politicians would take up the cause first.

What evidence do you have that consumer sentiment predicts consumer behavior?

This guy (author of "Ahead of the Curve") believes it has zero predictive value, but I guess the chart is in the eye of the beholder:

http://www.aheadofthecurve-thebook.com/0....

Downrange:

Those are some of the best words i've heard about the republican party in years. LOL

Maybe this will give some insight to the situation?

http://www.youtube.com/watch?v=ejbz4RVh0....

Quote:

Be a better American, stay independent and make every candidate work for your vote, if everyone did this then we would not be in this mess.

I disagree with this.

The rise of 'Independents' as a choice of voter registration is what has produced the current state of our two major parties. The larger the percentage of 'Independents', the more the two parties cater to special interests and extremists rather than Joe and Jane Sixpack.

"There are millions of Republicans just like me out here, and we're the people you need, not the corporations who have robbed us all."

Yep! And when their done cornholing all of America they will just take their act somewhere else.

Loved the ticker. Sounds like just what we need.

Oh! Wait a second! I think I feel monkeys starting to fly out my ass and I think I will spend the rest of the afternoon preying to win the lottery.

Both of these events are much more likely to transpire than Republicans or Democrats doing what is necessary.

That said I will continue to work my ass off to "make" it happen.

Gen you are one doggedly determined man.

Quote:

The moronites will incorrectly deduce that the pot of gradually-increasing temperature water they find themselves bobbing in is the fault of the repupblicanistas, and they will vote, en masse, for either Monica Lewinsky's boyfriend's wife, or "Bassetball Jones."

Is that really necessary?

You may not like Obama, or the Dems, but jeezus. "Basketball Jones"?

Grow up or time-travel back to the 1930s...you're missing your Klan meeting.

Back on topic:

McCain and the rest of the Rs are going to get d-e-s-t-r-o-y-e-d in Nov. I would like to see Obama invite Newt to the WH and have a talk. "What the **** do we do now? This country is a ****ing mess, and we need to work together."

Gather inputs/ideas.

I wish Newt would have run. That dude has vision beyond the next election or quarterly reports. He gets the fact our infrastructure is crumbling. He gets it that a sound energy policy is not just words to be used on the campaign trail. He gets the fact that our education/healthcare system is a laughingstock.

<sigh>

One thing I like so far from Obama is the fact he doesn't take **** from the Bush/Mcain/Rove clowns.

We shall see. I have a feeling I'm gonna be writing-in someone for prez.

I would like to see Obama come out with a few speeches regarding "Screw the Pigmen" and "No more bailouts", but that will never happen, I'm afraid.

"The easiest and soundest way to accomplish this is to push for a Federal Law that bars any mortgage written with less than 20% down or greater than 36% DTI."

With all due respect -

Why is the answer to limit the contractual options available among private parties to a contract? Why would the answer not be to change the system fundamentally to where public funds (you know, my money that is extracted from me under the threat of violence) do not underwrite private transactions?

I understand your position, but you basically eschew the only thing that can really bring about an end to the looting of the working man's pocketbook!

I enjoy your perspective, Karl, but you seem unabashedly pro-state, seemingly believing that the super-state can accomplish any feat of economics if they only do the right things on the margin. The reality is that large bureaucratic entities (such as our central planners against which you rail - albeit in a neutered, toothless manner when it comes to suggesting a course of action) cannot possibly make rational economic decisions for the whole of the economy, as the work of Von Mises and Hayek clearly showed. Individual actors, each pursuing their own self-interest is the only just and truly effacacious financial structure.

Moral hazard wasn't introduced by the Fed bailout of BSC - It was merely elevated a level. Moral hazard is definitionally a part of a fiat fractional reserve system, where the ability to tap into the tax base is the underlying guarantor of the system. So long as a bank (or any other entity or individual) has the ability to turn a small pile of deposits into an exponential pool of capital for loan (at interest), you will have intelligent actors who come up with new and ingenious ways to extract a disproportionate level of interest by tinkering with the mechanics of the fractional system.

I'm not a tin foiler. I understand that we have to start from the current systemic environ, but to avoid talking about structural changes when the problem in play is clearly structural in nature is inexplicable to me.

The only people who ultimately win in a fractional reserve system are those who have the ability to manipulate the reserve requirements and decide how much money will be introduced to or pulled from the system.

"Let me issue and control a nation's money and I care not who writes the laws."

Quote:

Why is the answer to limit the contractual options available among private parties to a contract? Why would the answer not be to change the system fundamentally to where public funds (you know, my money that is extracted from me under the threat of violence) do not underwrite private transactions?

Because a contract that is inherently unfair and signed only because one of the parties does not understand the implications of doing so is null and void under common (and statutory) law.

Quote:

The only people who ultimately win in a fractional reserve system are those who have the ability to manipulate the reserve requirements and decide how much money will be introduced to or pulled from the system.

There's a solution to that and it is found in the Constitutional power to regulate the money supply. Set reserve requirements at 10% by statute with no exceptions or loopholes.

The issue boils down to fraud from top to bottom. Stop the fraud and the problem for the most part goes away.

Getting rid of fractional reserve banking simply is not going to happen in our global economic environment without a global political catastrophe first.

Politics is the art of the possible.