"the worse is yet to come - the so-called “Alt-A” loans"

[ensho]

http://counterpunch.com/


The Worst is Yet to Come

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There’s worse to come. Since the subprime meltdown there’s been a lull. But now the so-called “Alt-A” loans, made to supposedly more credit-worthy borrowers and amounting to a trillion dollars, are allegedly about to go down the tubes, carrying banks and insurers with them. And this time Ben Bernanke, chairman the Federal Reserve, has no bail-out strategies left. He can’t lower interest rates to banks below the current 2 per cent, a level partially responsible for oil costing almost $130 a barrel. Round the corner looms hyper-inflation.

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We need an an active radical mass movement, shoving Congress into action. There’s no sign that any of the candidates have advisors at their elbows capable of offering pertinent counsel. Thirty years of vacuous boosterism about the virtues of neo-liberalism and unfettered markets have exacted a fearsome toll on the intellectual capacity of the policy-making elites.
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[aint_no_life_nowhere]

1. ChimpCo and friends will desperately try to keep the lull going until Jan. 2009

Maybe another tax refund? Maybe more printing of money and doling it out to banks? More federal government borrowing? That will make the final descent even worse. I don't think there are any good solutions. Raising interest rates to strengthen the dollar? That will put an additional stress on the banks and the fact that so much of the U.S. economy is now oriented towards shifting money around (legal system, banking, financial, insurance) instead of manufacturing is not good. Getting out of the money pit in the Middle East might help, but I think the effect of the massive outflow of money to Iraq will be felt for years to come. I think we're in for some hard times.