Friday, May 01, 2009

I'm sure...

it comes as no surprise to anyone, but the financial crisis gets worse by the day. Today's episode in Government Fail comes from the 'business as usual' department. You see, banks have a problem - they have these big outstanding debts they've ladled into the consumer trough and want paid at 1:1. Since the value of said debts was propped up by the race to create more crap they could bundle off as securities, some of the pricing is, shall we say, skewed. But when it came time to suggest to the banks that perhaps they should renegotiate the terms on some of these loans (that in some cases will go from subprime to 8%... all at a time when these same banks can borrow money to cover said loans at 1/4 point (.0025) interest - this is one of those 'screw you, we're going to make money on this disaster' situations). Well the crisis is really ugly for the homeowner - and with the economy taking an historic nosedive it behooves everyone to try to play as nice as possible so as not to exacerbate an already bad situation. Except for the banks of course. The banks dont like the idea of being pushed into renegotiating these loans. They dont like it at all. In fact - they dont like it so much that they went and dropped a shitpile of OUR bailout money into political action committees to make sure certain senators would kill a bill they'd already spent gobs of money to water down to the point of being absurd.

These guys are still operating in the odd belief that what's going on in this little playing field is not impacted by realities overseas - and the longer we continue to pretend that large wealth producing overseas entities arent going to take advantage of our refusal to reform this system the worse the end result is going to be for our unfettered capitalist masters. They dont see it coming... just as they didnt see the bubble burst coming - but this time it's going to suck a lot worse for the rest of us.

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