Meltdown Far From Over, New Mortgage Crisis Looms

by Matt Apuzzo - November 27th, 2008 - Associated Press

"The system has never been tested for a deep recession," said Ken Rosen, a real estate hedge fund manager and University of California at Berkeley professor of real estate economics.

One hope was that the U.S. would use some of the $700 billion financial bailout to buy shaky investments from banks and insurance companies. That was the original plan. But Treasury Secretary Henry Paulson has issued a stunning turnabout, saying the U.S. no longer planned to buy troubled securities. For those watching the wave of commercial defaults about to crest, the announcement was poorly received.

"He's created havoc in the marketplace by changing the rules," Rosen said. "It was the stupidest statement on Earth."

Who is surprised that George W. Bush and Henry Paulson have screwed up again? Bush, a man who has little understanding of free enterprise, sought advice from people who are as ignorant as he about free enterprise and the need to limit government power. Bush is a tyrannical big government supporter whose main claim to fame is that he sold socialism as being "conservative".

When this crisis arose, no one should have expected that it either came as a surprise or that it would be simple to fix. The major process of getting out of any recession is letting losers fail. Bush of course joined Paulson in thinking that they were smart enough to twiddle with the Government controls and voila, Bush would go down in history as the man who saved the banking system.

The problem is all those nasty bad loans are poisoning the mortgage system. They are wrecking real estate prices and wrecking the economy. The more you try to hide the tears in the balloon, the more pressure builds up. The losers must be allowed to fail or trying to cover up their failure merely spreads the crisis to those who made no mistakes.

As he comes to power, Barack Obama is totally oblivious to how the system works as well. He thinks all those "rich white people" that he and Jeremiah Wright are convinced are running the system are going to give him their money to spend as he wishes. As one socialist nation after another has learned, wealth is fragile and can disappear overnight. Obama is a Marxist and believes the socialist gibberish and will never understand what hit him as our economy collapses. Just like the last socialist, Jimmy Carter.