They got the gold mine . . .

Guess who gets the shaft?

Precisely one year ago, we lucky taxpayers took over Fannie Mae and Freddie Mac, the mortgage finance giants that contributed mightily to the wild and crazy home-loan-boom-turned-bust. . . . According to the company’s most recent quarterly financial statement, the Treasury will, by Sept. 30, have handed over $45 billion to shore up the company’s net worth. . . .
As a result of the Fannie takeover, taxpayers are paying millions of dollars in legal defense bills for three top former executives, including Franklin D. Raines, who left the company in late 2004 under accusations of accounting improprieties. From Sept. 6, 2008, to July 21, these legal payments totaled $6.3 million. . . .

Read the rest. Meanwhile, let's talk jobless "recovery":

Many experts envision a jobless recovery, in which the economy grows but job losses persist. . . .
After the government unleashed $787 billion to stimulate economic growth, and after it bailed out financial institutions and the auto industry, the unemployment rate exceeds worst-case projections envisioned by the administration early this year. . . .
If the jobless rate continues to climb, as is widely expected, that could generate pressure for another stimulus spending package. But given intensifying concern about the size of federal budget deficits -- now projected to exceed $9 trillion within a decade -- any new spending could be politically perilous.

And, hey, how's that stimulus workin' for ya?

It was just five months ago that Vice President Joseph R. Biden Jr. made the New Flyer bus factory [in St. Cloud, Minn.] a symbol of the stimulus. With several cabinet secretaries in tow, he held a town-hall-style meeting at the factory, where he praised the company as "an example of the future" and said that it stood to get more orders for its hybrid electric buses thanks to the $8.4 billion that the stimulus law devotes to mass transit.
But last month, the company that administration officials had pictured as a stimulus success story began laying off 320 people, or 13 percent of its work force . . .

Oh, yes -- the joy of misery!

UPDATE: Now a Memeorandum thread (although omitting me so far).

'God Help Us'

So says Blue Crab Boulevard, surveying the catastrophic effects of Obamanomics. And that was before he learned of The Mother Of All Bailouts.

The O'Biden Happy Talk about the magical wonders of "stimulus" continues to deceive much of the MSM -- it's all unicorns and rainbows and "recovery," as far as they know -- but the financial press can't ignore the evidence of impending crisis.

One thing NTCNews.com has focused on is aggregating financial and economic news, which has required me to scour over Google Business News and other sources. Is the DJIA up or down? What about Treasury notes? Gold? Oil? Currencies? Banking? Housing? Employment?

Thursday, the stock market broke a 4-day slide, and gained again on Friday, after the much-anticipated August jobs report showed unemployment had risen to 9.7%. The average person sees these two facts -- jobs down, market up -- and asks, "How on earth is 9.7% unemployment good news?"

Beats me. If I could figure out the stock market, I'd be rich. Instead, I'm a blogger. However, facts are facts. Since peaking at 14,034.39 on Oct. 9, 2007, the DJIA has lost 4,593.12 points. Even though the Dow has bounced up some 3,000 points since bottoming out in March, we're still talking about a net loss of 32.7% in less than two years.

Combine that with the meltdown in housing prices, and it represents a massive devastation of asset-value, an economic cataclysm of historic proportions.

Now, consider that we are less than two years away from 2001, when the oldest of the Baby Boomers, born in early 1946, turn 65. Their retirement funds have been diminished by the stock-market collapse, and if they had planned to cash out the equity in their homes . . . Well, good luck with that plan.

Beginning in 2011, then, an increasing number of Baby Boomers will undergo the transition from taxpayers to tax consumers, eligible for Social Security and MediCare, a fiscal drain on the economy. Only by dipping into what remains of their asset value -- selling their homes or other valuables, spending out their IRAs, 401(k)s and other retirement funds -- will this exploding population of retirees be able to live above the minimum level provided by the government.

Without getting into a lot of complicated analysis (e.g., the growth-killing impact of just about anything the federal government might do to meet the looming fiscal crisis), the ordinary person with a minimal level of economic education who looks at this situation can only conclude: We're completely screwed.

Which is why, as I scour the financial news, I keep an eye out for omens and portents of the inevitable apocalypse, such as these items aggregated at NTCNews.com the past week:

Are We Facing a Banking Crisis? Is the Gold Price About to Explode?
-- Market Oracle, Aug. 31

"Oil prices fell to near $71 a barrel Monday as China's stock market tumbled and commodities investors questioned whether the U.S. economy can recover strongly in the second half."
-- Associated Press, Aug. 31

"AIG fell 17% after Sanford C. Bernstein dropped the stock to 'underperform,' on concerns that Washington will pull back on financial assistance as AIG recovers. The firm is still on the hook for $80 billion in federal loans . . ."
-- Forbes, Sept. 1

"The American economy will suffer 'a long time' as a result of last year's federal bailout of the financial industry, according to Johan Norberg, author of a new book about the policies that caused the banking meltdown. . . . 'The bailouts . . . the debts -- we won't be able to pay them back. We're going to pay for it for a long time . . .' "
-- The American Spectator, Sept. 2

"FDIC head Sheila Bair told CNBC Tuesday evening that commercial real estate loans remain a "looming problem" for banks' balance sheets and she expects the area to increasingly be a driver for bank failures during the remainder of this year and 2010 . . ."
-- Reuters, Sept. 2

"U.S. banks are holding more than $1 trillion of mortgages backed by commercial property that is fast losing value."
-- Wall Street Journal, Sept. 2

" 'Most participants saw the economy as likely to recover only slowly during the second half of this year, and all saw it as still vulnerable to adverse shocks,' the Fed said in today’s minutes. 'Labor market conditions remained of particular concern to meeting participants . . .' "
-- Bloomberg News, Sept. 2

"Gold prices reached their highest point in nearly three months as the U.S. dollar weakened and participants bought in a flight-to-quality bid based on economic uncertainty and concerns about the stock market . . ."
-- Wall Street Journal, Sept. 2

"Treasurys fell Thursday, sending yields higher, as stocks edged up and the U.S. government said it planned to sell $70 billion in Treasury bonds and notes next week."
-- MarketWatch, Sept. 3

UNEMPLOYMENT REACHES 9.7%
-- NTCNews.com, Sept. 4

"Tony Crescenzi, a market strategist and portfolio manager at Pacific Investment Management Co., manager of the world’s biggest bond fund, said the U.S. faces a slow recovery because unemployment is persisting . . . 'The key ingredient for a sustainable recovery is still absent,' Crescenzi said today in an interview on Bloomberg Radio. 'We need income growth to produce self-reinforcing expansion. . . . The duration of unemployment will be longer and will put downward pressure on wages.'"
-- Bloomberg News, Sept. 4

"Congress passed the Cash for Clunkers program in order to increase automobile employment and save jobs. . . . The employment report shows that -- despite the Cash for Clunkers craze, and the $2 billion Congress added to the program at the end of July -- motor vehicles and parts manufactures shed 15,000 jobs in August. That erased half of the jobs gained in July and continued the yearlong downward trend . . ."
-- Heritage Foundation, Sept. 4

FEDS SHUT DOWN 5 BANKS
-- NTCNews.com, Sept. 5

Given the serious underlying problems of the economy -- "The Fundamentals Still Suck," as I explained in May -- no amount of unicorns-and-rainbows "recovery" talk from the administration and its MSM sock-puppets can avert the inevitable consequences.

So NTCNews.com keeps an eye on the economy and readers who appreciate this service -- you can subscribe to the RSS feed in Google, Atom, etc., to get the latest updates -- are invited to support this project by hitting the tip jar.

"The revolution will not be televised, but the apocalypse will be blogged."

Ready for the Mother Of All Bailouts?

The FHA is on the hook for lots of "underwater" loans, taken out by low-income homeowners who got special low down-payment deals and -- in case you didn't notice -- unemployment hit a 26-year high in August, with no prospect the 9.7% jobless rate will go down any time this year. Dave Hogberg of Investors Business Daily reports:

FHA-insured loans have more than tripled from 530,000 in fiscal year 2007 to 1.7 million thus far in 2009. The Government National Mortgage Association, which securitizes FHA loans, has boosted its mortgage-related issuance to $287 billion from $85 billion. Yet during that same period, the FHA's loan delinquency rate has climbed to 14.4% in Q2 from 12.6% two years earlier.

OK, so guess what the consequences are now?

As job losses continue to mount, why would someone facing economic difficulties try to keep a home that is worth less than the money owed on it?

More at the Hot Air Green Room.

UPDATE: Welcome, Instapundit readers! This story has now been front-paged at Hot Air -- thanks, Ed Morrisey!

UPDATE II: Proving that some bloggers know more about economics than Tim Geithner and Ben Bernanke, Jimmie Bise explains this predictable disaster in four sentences:

See, it turns out that the FHA, prompted of course by Congress, gave out a bazillion loans to people who were on the very edge of being able to pay them back. As long as our economy kept booming, they'd probably -- probably -- be okay. But if the economy wavered even a little bit, they'd be hosed and all those loans would come back to the FHA so fast you'd think they were attached by rubber bands. That's exactly what's happening now and the FHA is watching their cash reserves dry up like a shallow mudpuddle in the middle of Death Valley in July.

Or, in three simple words: IT WON'T WORK!

Confession of Confident Cluelessness

"This is the most over-bought market I've seen in ages."
-- Jim Cramer, "Mad Money," CNBC

After a slow start today, the report that new housing sales increased 11% in June pushed the stock markets up -- but not much. (Memeorandum has blog reaction from Don Surber, Calculated Risk and more.)

What does it mean? Short answer: I don't have a freaking clue. And that's a good thing.

Compiling this afternoon's "Wall Street P.M." report at NTCNews.com, I had to sift through a lot of financial news, and I sifted it with the curiosity of a guy who honestly doesn't know any more about Wall Street than you do (and probably less than some of you).

My office TV was on CNBC today, and there is certainly no shortage of people out there willing to say what it all means. The fact that these people disagree with each other all the time . . . well, where is the truth?

Basic economics, however, I understand. And basic economics -- combined with all that sifting through the news -- told me that this morning's housing report wasn't all that hot. Check out what these analysts told the Wall Street Journal:

“[T]he dismal state of the U.S. labor market will continue to cast a long shadow over the prospects for a meaningful recovery in the sector in the near term . . .”
“[T]he report showed a sharp 6% sequential decline in June suggesting that much of the sales activity was concentrated at the lower end of the market . . .”
“The news sounds better than it looks . . . despite the jump in sales in June, new home sales remain at very low levels, and the not seasonally adjusted data show a total of 36,000 homes sold nationwide in June, the lowest sales total for June since 1982.”

Also, 31% of June home sales were "distressed" sales, involving foreclosures, etc. Does that sound like "recovery" to you? Apparently, Wall Street wasn't thrilled, either, and so the market only recorded a minor gain. Meanwhile, the Treasury Department is flooding more than $200 billion of new debt into the market this week, which has people worried about "overwhelming supply." Oh, yeah, and there was a Monday spike in the CBOE Volatility Index.

What does that mean? I don't even claim to know, in the sense of whether you should buy or sell or flee to a cabin full of freeze-dried food in Montana and wait for Armageddon. Rebecca Jarvis of CNBC is now chattering away in my left ear about "vector rotation," and Larry Kudlow is pimping the "big summer rally" -- and all this chatter might be very important.

Or not. But I don't have to know what it means to do a market report at NTCNews.com -- I just look for interesting facts and pile 'em up. My favorite fact of the day? This quote:

"Last week was dubbed as a good earnings week, but good compared to what?" asked David Hefty, CEO of Cornerstone Wealth Management in Auburn, Ind. "It doesn't take a lot to get the market excited these days."

Right. But just don't ask me what it means. You can figure that out for yourself.

Foreclose and Evict the Deadbeat Scum

OK, as political slogans go, it ain't "Hope and Change," but as economics it's way better than this:

Learn About the Making Home Affordable Refinance and Modification Options
The President's plan was created to help millions of homeowners refinance or modify their mortgages.
Refinancing: Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home. A Home Affordable Refinance will help borrowers whose loans are held by Fannie Mae or Freddie Mac refinance into a more affordable mortgage.
Modification: Many homeowners are struggling to make their monthly mortgage payments either because their interest rate has increased or they have less income. A Home Affordable Modification will provide them with mortgage payments they can afford.

To quote The Outlaw Josey Wales, "Don't piss down my back and tell me it's raining." This is a classic example of how interventionist government picks winners and losers, singling out some people for favoritism, while screwing over the rest of us.

When I left Georgia in 1997, we left behind a cute little bungalow on a full acre of wooded land that we bought cheap in 1992. It took us two years to sell the thing, which meant that I spent my first two years in Washington paying that mortgage while also paying $900 a month for an apartment. We tried to rent out our Georgia house, then tried to do a rent-to-own, until finally we sold it at a very modest increase over what we'd paid for it. The damage to my family's financial situation in the meantime was enormous.

You do what it takes. And since what it took was for us to suck it up, essentially forfeiting our equity and become tenants, that's what we did. Well, welcome to 2009, and suddenly it's unpatriotic to expect people to make the mortgage payments or else lose their equity. People have a right to a home, no matter if they're 120 days past due. Pay close attention to the next sentence:

FUCK YOU, SCUMBAGS

Excuse my temporary departure from the appropriate decorum of family-friendly blogging, but expecting me to conceive of worthless deadbeats as victims is a bit much to ask. I'm hustling as hard as I can -- please hit the tip jar, people -- to avert complete financial disaster myself. I've got six kids to support, and I ain't got time for pity, as if pity had any economic value to begin with. Imagine me calling up the finance company and pleading pity to prevent the repossession of my car. (I'm still waiting for those ACORN protesters to show up.)

Now, you can go to Michelle Malkin and read about people whining about the Obama plan. Or you can go to Naked Capitalism and read a detailed analysis of this "mortgage modification" nonsense cooked up by the Treasury Department. But, in general, as an economic proposition, the plan can be summarized in two words: It sucks.

That's why I've announced my own plan, "Foreclose and Evict the Deadbeat Scum" (FEDS). It's very simple:

• The banks take back the houses currently occupied by deadbeat scum.
• The deadbeat scum either find a place to rent, or move in with relatives, or go straight to hell. It doesn't really matter. We're talking economics.
• This creates a housing occupancy in the homes formerly occupied by deadbeat scum.
• The banks must either (a) sell the homes for whatever the market will pay, or (b) rent the homes to people who weren't foolish enough to take on balloon-payment mortgages.
• Whatever the ultimate result -- and rents for homes made vacant by the FEDS program may need to be reduced in order to attract tenants -- the point is that the excess-valuation problem in the housing market will be resolved, so that prices once again reflect actual supply and demand.
• Homeowners who don't wish to participate in the FEDS program can opt out by making their fucking loan payments, like they fucking agreed to when they fucking signed their fucking contracts.

Don't blame me for the rough language. That's how the free market talks, you worthless scum. "Compassionate conservatism" left town two months ago. Now you're talking to the heartless right-winger your mother warned you about. Either make your payments or get foreclosed and evicted. As an economic proposition, one is as good as the other.

UPDATE: Linked at Cold Fury.

Re-inflating the bubble?

The news that Senate Republicans have added "tax relief for homebuyers" to the stimulus bill is not good news, says Doug Bandow at The American Spectator:

The housing market bubble burst. It cannot be reinflated. The bust will be painful, but dumping more money into the market in an attempt to inflate prices will only slow the adjustment process. The pain is unfortunate, even tragic for some people, but inevitable.

Exactly -- a point made by Ron Paul just yesterday. While driving to Washington, I was listening to C-SPAN radio coverage of the House Financial Services Committee hearing with Federal Reserve Chairman Ben Bernanke and caught this:

Ron Paul . . . says that, as a free marketer, he is also upset that Congress wants to prop up housing prices when there is a glut of housing on the market. "What's wrong with allowing the market to allow these prices to adjust," and drop quickly, so that "we can all go back to work again?"

That is to say, from a free-market perspective, those houses are worth whatever they'll sell for. The losses caused by the collapse of the bubble are real, and until those losses are realized -- that is, until the houses are sold and the market readjusted -- we are living in a state of economic denial, which Senate Republicans are attempting to prolong.

This is what Michelle Malkin has been trying to say in her many months of outspoken opposition to Washington's bailout/stimulus frenzy. The market is the market, and you can't fool the market. It might be the only thing that Ron Paul and Michelle Malkin agree about.

UPDATE: While trying to find video of Dr. No's statements yesterday, I found this video from February 2007 -- two years ago, before the bubble burst -- where he's talking "fiat money.":

This sounds kooky at times, but his essential points are correct:

• By manipulating the money supply and interest rates, the Fed conceals economic reality behind a wall of artificial price-signals.
• During the "bubble," the consumer price index (CPI) did not accurately reflect the inflation that Americans were experiencing in higher costs of housing, health care and college tuition.

We had government "experts" telling us that inflation was running only 2% annually, even while housing prices soared, effectively pricing many young people out of the market.

In retrospect, we see that kooky "Dr. No" was prescient, and all the "experts" were full of crap.

Affordable housing? Success!

For the past decade, we've heard nothing from liberals but whining about "affordable housing." The working poor were being priced out of the housing market, denied their chance at the American Dream. Yadda yadda yadda.

So now the housing market declines -- home prices are down 16% in the past year -- and what do we hear from liberals? More whining.

The Bush administration finally succeeds at achieving a liberal objective, reducing home prices, and do Republicans get any credit for it? No.

In fact, not only are liberals treating the success of the Bush "affordable housing program" as a disaster, they haven't even noticed the success of the "affordable securities program," which has reduced stock prices by 22 percent in just eight days. No longer are the working poor priced out of the stock market, but even this good news is ignored by the biased media.

There's no pleasing some people.