Thursday, August 21, 2008

The Rot Our Rulers Have Wrought (William Grigg)

William Grigg likens our economy to an elevator cable that has snapped, sending it and all of its occupants towards the inevitable crash. An excerpt:

Banks are failing with the hebdomadal consistency of a politician's election-year church attendance. The rot spreading through the banking industry is quickly destroying the foundations of some very large institutions: Merrill Lynch and Wachovia are in severe peril of failure, with write-offs much larger than assets on hand.

The familiar prescription, of course, is more "liquidity" from the Fed, but this is the main vector along which the contagion is spread. Stock values for Fannie Mae and Freddie Mac are collapsing as investors accelerate the inevitable outcome -- a decline in share price to zero. This result will most likely come as the result of a federal bail-out, a prospect clearly anticipated in the rescue bill enacted just weeks ago.

The corporatocracy in charge of Fannie and Freddie are being sheltered from their own criminal incompetence and malignant dishonesty. How criminally incompetent were they, you ask?

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