Watch this folks...

Now let's talk about it a bit more in depth.

First, we have hot off the wires that Chris Dodd of the Senate wants to hold hearings on this bailout.

Why, you might ask? 

Well, Paulson said he would not use this authority and that it was simply for "moral suasion" when in front of Dodd's committee a couple of months ago.

He lied.

Dodd, and the rest of the House and Senate, now are going to have to grapple with the truth that I pointed out a couple of months ago - on July 16th, in fact.

"Third and finally, since I expect we will try to get right to questions in the next hearing, let me say a few words about the G.S.E. bailout plan. When I picked up my newspaper yesterday, I thought I woke up in France. But no, it turns out socialism is alive and well in America. The Treasury Secretary is asking for a blank check to buy as much Fannie and Freddie debt or equity as he wants. The Fed’s purchase of Bear Stearns’ assets was amateur socialism compared to this. "

That was from Senator Bunning's speech.

Did anyone listen?

Nope.

Was he right?

Yep.  In less than two months.  That's pretty good for an old pitcher.  How's your record Mr. Dodd?  Mr. Shelby?  All the other asshats in the House and Senate who voted for this crap?

You have been gamed into granting Treasury the ability to skull-screw every American out of three hundred billion dollars - at minimum - to "rescue" the GSEs.  A sum that, I might add, is likely small - S&P says the total could reach over one trillion, and I happen to agree - it just might.

How many times do you have to get conned by these people - Bernanke and Paulson - before you rescind their authority, start investigating them for perjury and inside dealing and put a stop to this******of the American consumer?

You've been had twice in a row.  Bear Stearns and now this.  Are you going to allow it to pass some "innocent" explanation?

Where does it stop Mr. Dodd?  $300 billion?  $500?  $700?  You and the rest of the Democrats whine about Iraq and its cost, but when it comes down to the truth that's chump change.  Here we have you fools in the House and Senate spending over $500 billion thus far on a "stimulus" that didn't, on a rescue of a failed investment bank, and now Hank's "Bazooka", which he told you he wouldn't have to use, turned out to be in fact loaded with over $100 billion of immediately-committed taxpayer dollars, with more available as he chooses to use it!

Exactly why should the Chinese - or Bill Gross - be made whole?  Are you blind Sir?  Let me reproduce once again the face page from a Fannie Mae prospectus:

Is there any ambiguity there?  Is there any way to read this other than "you might lose money, and the government won't stop it"?  Can you make a cogent argument why we should retroactively change the rules for these people at taxpayer expense after they made their bets and collected the excess money in higher yields and thus higher mortgage rates for Americans?

I warned you at the time that nobody puts on a condom unless they intend to screw, but you didn't listen, did you?  Why it was important to "protect America's homeowners", right?

You protected nothing and once again mortgaged our future so that The Pigmen could "make theirs" at our expense, this time to the tune of three hundred billion dollars and counting, with Paulson's authority to continue this charade being unlimited - because you literally gave him a signed, blank check.

There was no reason to do this.  If the United States needs a formal liquidity provider under government control we have one - Ginnie Mae.  Ginnie was more than capable of underwriting and guaranteeing solid and safe loans.

There was no reason to extend this "lifeline" to the GSEs.  But now it is done, and we are going to get the bill.  You passed this piece of trash legislation without even allowing Jim DeMint or anyone else to offer amendments, nor did you require Paulson to come back for specific authorization before he acted.

You are traitors Mr. Dodd, along with your other 99 cronies in The Senate, and all 435 of your co-conspirators in The House.

You have been consistently and repeatedly lied to from the outset of this credit crunch by an administration and Federal Reserve that are interested in goading you into doing things that they cannot do on their own, but which will benefit their friends and disadvantage the American people.

You have been all too happy to oblige as you tear into our wallets like a rabid pack of wolves, mortgaging our futures, our children's futures, and our nation.

The Truth is and always has been that housing cannot return to affordability until you can afford to buy a house with a 30 year fixed mortgage and a 36% DTI, and you can save 20% in down payment over the space of a couple of years.

The Truth is that until this happens everything you do in Congress to "try to stabilize the housing market" is instead causing household costs to rise precipitously and destroy Americans' personal balance sheets, and if you don't stop it soon, our economy will be forced not into Recession, but Depression, as there is simply no more credit capacity possible.

The Truth is that you folks in Congress keep lying to the American people day after day, claiming that there is some magic elixir that changes the mathematics of credit, the mathematics of debt, and the mathematics of affordability of both housing and everything else in this economy.  We the people are tired of being lied to systematically while you sit in your offices in Washington DC and tell us how you're going to "protect the taxpayer", then you******us for $300 billion frapping dollars!  If that's protection I want a new condom.

The Truth is that after 9/11 instead of allowing the market to correct as you should have and forcing all the bad debt out of the system you instead stood back and listened to George Bush tell us all to "go out and shop" and further stood back while Alan Greenspan intentionally inflated a housing bubble with the help of Fannie and Freddie, two agencies that then spent $200 million dollars bribing, er, lobbying, to allow them to provide the fuel for the most insane bubble economics in the history of mankind.

The Truth is that this whole scheme of bailout after bailout is escalating at warp speed in terms of its cost, and yet it is doing exactly one thing - preventing the stock market from correcting to a sustainable earnings level with financials making honest money instead of swindling municipalities on swaps (as has recently been uncovered in regards to Alabama and elsewhere) and similar "structured products" that are in fact nothing but a gigantic scam.  Yet the first of these, Bear Stearns, was $29 billion and created a ramp job in the futures and stock market for a couple of months.  This one has a price tag of at least $100 billion and perhaps as much as $1 trillion according to Standard and Poors, yet you were told (and told us!) that this was a $25 billion expense, according to the CBO.  You lied to us again and the price of these repeated "stick save" attempts for the markets is increasing at an exponential rate. 

The Truth is that American does not have the money for any of this crap.  The government doesn't have it and the people don't have it.  We are going broke fast as our cost of living has, for most necessities such as food and fuel, doubled in the last two years.  I just received notice that my electric bill will be increasing by 30% in three steps over the next six months.  How the hell is someone on fixed income supposed to cover that?  These cost increases are a direct consequence of your actions.

The Truth is that Hank Paulson just spent in five minutes half of what it took us four years to spend in Iraq!  Further, he spent it to bail out the Chinese and Japanese central banks and investors in foreign lands.  You folks kvetch about the war and its cost, well, how about economic warfare waged by these people where we don't even bother to fight back - we just give them all our damn money!  How in the hell do you justify such an outrageous transfer of our wealth?

The Truth is that all of the money that could have been spent reforming health care, developing alternative energy and repairing our nations' infrastructure was just blown on bailing out China and you are directly responsible for it!  You can forget about any of those programs you want in the next Congress - the money is all gone.

The Truth Chris (and the rest of you clowns) is that there is absolutely no reason for Americans to get up and go to work any more.  Those of us who are prudent, who play by the rules, who buy our homes with solid, 30 year fixed mortgages and 20% down payments, who don't lever ourselves up to our chins and cheat little old ladies out of every dime they have lose every time when you folks start this crap.  We have our cost of living double, we have our homes pumped to insane levels and then destroyed, we lose our jobs and we lose our futures.  Our children can't afford college because your loose liquidity and money policies, which you cheer onward, cause college costs to rise to the point that our kids "graduate" with $100,000 or more in debt - a debt they can't walk off from in bankruptcy, because you changed the laws to make that impossible.  Our children are literally debt slaves and if you could get the rest of us to be that stupid we would be too.

The Truth is that Congress pulled this crap back in the 1970s and it destroyed many people in the Middle Class.  I remember it and it sucked.  I remember my families' grocery bill doubling in a couple of years' time, I remember gas prices more than doubling and I remember heating oil going up so fast that we had to finance a gas furnace replacement in order to avoid going broke one winter.  You are responsible for it this time Chris - you and your cronies in Congress who gave a blank check to Paulson after he and Bernanke LIED to you.  I told you he was lying and you didn't listen. 

You were wrong, Chris, and I was right. 

You believed both Paulson and Bernanke and they lied to you.

Twice.

Now stop the crap and reverse this - right now - by enforcing your power as Congress to regulate the money supply.  Specifically:

1. Repeal Paulson's "Bazooka" or force these firms into receivership.  Do not allow him to blow the $300 billion we do not have.
2. As I have noted, split off the current book of business and let it run down; what happens to those debtholders and shareholders happens.  Underwrite NEW loans at 30 years fixed, 36% DTI and 20% cash down payments.  Guarantee these new MBS with the full faith and credit of the government.
3. Tell Bernanke to drain the damn swamp and force the other banks, both investment and commercial, to take their marks.  Tell Sheila Bair to do the same damn thing with the banks under her control at the FDIC.  The FDIC is losing, on average, more than 30% of the asset base in each bank it closes right now.  This is a historic high and THE FDIC IS GOING TO RUN OUT OF MONEY IN A FEW MONTHS IF YOU DON'T STOMP ON THIS RIGHT NOW.  There are literally DOZENS of banks, including some big ones, that need to be closed TODAY while there is still value in them.  Proof of this is found at IndyMac that should have been closed last FALL.  There are SEVERAL other institutions, including a couple LARGER than IndyMac, that have even more booked "capitalized interest" from Option ARMs that will never be collected, yet is on their books.  THESE BANKS WILL ULTIMATELY GO UNDER, IT IS SIMPLY A MATTER OF WHEN, NOT IF.  The longer the FDIC waits the worse the cost will be and THAT promise - the $100,000 deposit insurance - is one you MUST keep.  THERE IS LITERALLY A TRILLION DOLLARS OR MORE OF EXPOSURE HERE IF YOU DON'T PUT A STOP TO THIS IMMEDIATELY.

Now let me make clear, Mr. Dodd, that my Tickers, petitions and other messages are available to anyone and everyone, and are archived all over The Internet in various caches and web stores. 

The truth of your "performance" in this mess and the veracity of your, Bernanke's, and Paulson's "assurances" is thus available to every American every single day.

While The American People are generally rather foolish and prefer to watch American Idol rather than pay attention, when they can't make the food and electric bill they are going to be rather upset, and they are going to look for answers.

When they find those answers it will not bode well for the continued presence in Washington of either Democrats or Republicans, given recent history.

I have long contended that a third party would be healthy for American Politics.

I no longer believe it would be healthy. 

I now believe it is necessary to avoid the all-on collapse of our government, as we are now increasing our "bailouts" at a rate of 10 times per six month period - a rate that clearly, if it runs one or two more iterations (and the FDIC going under will do it) risks reaching a mathematical tipping point where the fiscal destruction of our nation's government is assured.

This is one time I hope I am wrong, because if you fail to act and I'm right, our nation's ability to fund its government is finished.

Think about the dice you're rolling this time Chris, and think back about the odds - twice you've gone ahead with things I've made clear would be disasters, ignoring those predictions, and twice you've been proven wrong.

We cannot afford for you to go 3 for 3.