Thursday, August 30, 2007

Must-Read Ranting from Mish

by Ken Houghton

I believe Michael Shedlock misstates Ben Bernanke's conception of the causes and factors of the Depression, but Bernanke's nuances are not well served by his prose.

Unfortunately, the substance of the analysis is spot-on:
Bailing out the markets on options expiry open.... What's not to like about that? Taking risky collateral and being willing to roll it over forever.... What's not to like about that? (For more on this topic please see Now we know who and why.)

The short version of the second link is that Citigroup, JPMC, and BofA are all subsidizing their brokerage mismanagementsoperations with your and my Federally-insured checking and savings deposits, but its worth the read.

His faith in Ron Paul and doubts about the function of the Federal Reserve are misplaced at best, but how can one object to a clear statement of reason:
No Mr. Bernanke, It's most assuredly NOT "worth considering at this juncture whether the private and public sectors, separately or in collaboration, could help the situation by developing a broader range of mortgage products which are appropriate for low-and moderate-income borrowers, including those seeking to refinance." [italics Mish's]

What Bernanke means by this is setting up a way for the bank to profit from your home's appreciation (if that ever happens again—which it will, some places). Apparently, the method that has been heavily used for the past six years—MEW and refinancing—has not made them enough money.

And Craig Newmark wondered why people wouldn't think BofA, with a dividend yield of 5.4%, is a buy.

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I took the link out of the post title (not sure if that was deliberate) as that corrupts the site feed...

You're being a bit kind to Mish on the Ron Paul/gold standard business -- I was going to unload on him for economic illiteracy based on an Yves Smith post at Salmon's.

But there is at least a moment of clarity amid the insanity. Shared appreciation? Madness!
Link was an accident. Thank you.

I've come to recognize that he has that blind spot, but it's usually (as in the post cited) virtually a throwaway at the end of the post.
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