Banana Republicans join Free Spending Democrats

The Washington to Wall Street Express continues to pick up steam.  The
'stimulus package' including raising FHA limits, is not about bailing out
borrowers, but bailing out their lenders. Bankers, Realtors, and Homebuilders
are lobbying hard for the temporary bailout, oblivious to the raging inflation
they are feeding which will eat their industries alive like a 1979 wildfire
when the government printing press chickens home to roost.   When the Chickens
come home to roost this time, they'll find the vultures have taken their place.  

The Federal Government goes out and borrows over $100 billion on 30 year notes
to give away $600 to about everyone so they may blow the money at Best Buy to
'stimulate' the economy,  and how can massive inflation not be far behind?
Heck, if $600 is a stimulant, let's go for the real gusto with $10,000 each to
really jump start the economy. 

One article stated "Republicans, for their part, were pleased that the
bulk of the rebates - more than 70 percent, according to an analysis by
Congress' Joint Tax Committee - would go to individuals who pay taxes."
This was the last straw about running for Congress to join the Banana
Republicans.  Everybody gets a check, as if a bankrupting business could afford
to pay dividends. 

Plus, of course, the taxpayer will now start paying for crappy mortgages by
Federally guaranteeing mortgages certain to default, and guaranteeing more
mortgages which will also likely default.   People are beginning to walk on
their mortgages even if they can afford (barely) them, and this is nothing not
discussed here for the last four years over the projected fall out of the dying
bubble.  The homeowners have no money in the deal, thanks to the great whiz kid
financing available by Rube Goldberg & Company Mortgage Specialists.   When you
are deep upside down, even if you can stretch the payments, why do so? Like I
saw in New England in 1989, you owe $350k, the house is worth $180k, why eat
beans, drive two clunkers, and keep paying on a deeply submersed house when you
can rent in the same neighborhood for $1400, drive decent cars, take a vacation
now and then, and eat steak?  Should anyone doubt, go see what $1400 a month
now rents in Brevard County.  Luxury condos, fancy houses in gated communities,
beachside homes, you name it, for that price you can find it.  And almost all
of these sold in 2005 for $350,000 or MORE.  There is nothing new under the
sun. This has all happened before, but people wanted to believe that 'this time
is different'. Not.

Now many of these dying loans will be passed off to the Federal Government
(meaning taxpayers) to cover the lenders who issued the poor paper (and are, no
doubt, keeping all of their fees made).  Money will be borrowed to distribute
as a 'stimulant' with no regards to the continuous piling up of the national
debt (and more importantly, annual debt service) while the Federal Reserve has
had the helicopters up and tossing money like crazy out the doors as they
insanely slash interest rates and devalue the dollar.  Of course, as one friend
told me, the cheapening dollar may mean changing Ben Bernanke's nickname from
Helicopter Ben to B52 Ben, because right now for the American Dollar, the
American Economy, and quite possibly the American Republic, it is Bombs Away!

Scott Ellis