Big Brother parlays...

 "It's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford, yet there are many American homeowners who could get through this difficult time with a little flexibility from their lenders, or a little help from their government."     George W Bush, last friday.
 "It is not the responsibility of the Federal Reserve-nor would it be appropriate-to protect lenders and investors from the consequences of their financial decisions....But (the Fed) continues to monitor the situation and will act as needed to limit the adverse effects on the broader economy."  Ben Bernanke, last friday.
 "I don't care what you want, you can't have it." My Date, last friday.

No, that last one was a joke. :evilking

OK, so now that we have heard the correct answer from the free-market government, what was it your ‘big brother’ said…? Was his answer different?


 My point is simply this: the government and the Fed are stepping in to clean up the subprime mess. Even if the credit crunch is largely deserved by everyone involved, it has too many implications across the broader global economy. Their statements are essentially the same: “We believe in the free market, and sometimes, in free enterprise, people lose, BUT we have no choice but to bail everyone out of this one…the fallout is just too far reaching.”  Your absolutely right, Keith, that is the correct answer.  Recently, economic experts throughout the media predicted inflation and expressed the belief that the market should bring tycoons and fools to their respective destinies. The only sound from their voices now is deafening silence.
 Four weeks ago, President Bush rejected the proposal to allow Freddie Mac and Fannie Mae to buy more home loans on the secondary mortgage market.  Last Friday, the president announced an initiative to expand the role of the Federal Housing Administration.  The White House wants to permit the FHA to refinance subprime loans that are currently in default.  I can’t tell if this represents a change in perception with regard to the subprime problem, or if this is just a smarter way to honeycomb these entities to limit their collective risk.  I can plainly see that this represents damage control and a bail out.
 Ben Bernanke, during a meeting on Friday, pointed out the economic hardship of commercial mortgage businesses; a problem that I have complained about on this very forum.  His phrase “will act as needed” provides no promises, but he made multiple references to the effects of the credit panic on the economy as a whole.
 I believe this is a consensus, perhaps a calculated one, that represents a new, more ominous opinion of the direction of our economy.  The president and the Fed have many innovative tools to navigate through this turbulence, big brother is definitely involved, maybe parlay was a poor choice of words.