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You don’t put water in a bucket with a hole in it.

The off-balance sheet accounting is still occurring everywhere from the banks to the pension funds. Mark to make believe is still in use and hasn’t been corrected in a number of significant places.

A credit-based economy is not a strong macro-economic model but our authorities are continuing to try shoring up the very structural deficiencies that are inherent to it.

Not to be the one left out of saying it, we’re screwed.

Now, our government is going to buy or guarantee “legacy assets” which are the toxic assets of little, questionable or no value. That is not of interest to anyone with a wit of good sense in the marketplace, so we are going to buy them or back them.

Our Federal Reserve charter does not serve the interest of the American people but rather the banking industry and in particular, serves the interest of these mega conglomerate bank holding companies for lack of a better plan.

There is an open line of funding from the Federal Reserve and our Treasury using taxpayer money by the hundreds of billions of dollars and in some cases, totaling in the trillions of dollars being given wholesale to the corporate giants of banking, investment banking, insurance and others.

And, again I say – “You don’t put money in a bucket with a hole in it.”

The necessary conforming standards and regulations of good sense and prudence have not been put in place where it concerns these massive institutions.

One department of their organization does not know what the other is doing. Credit products are being mis-priced as assets in one place and priced as something else in another.

Credit rates are being jacked up to those already under contract for that credit, not only in the US but around the world. Ratings for credit are being created and adjusted, not based on reality but based on the abusive power of the ratings agencies. They are not objective independent free-standing organizations without conflicts of interest, no matter what they say.

Those products which rely on credit for purchases to be made are arbitrarily priced higher than the market value of those products, from houses to cars to college educations to washers and dryers. The supply and demand in the marketplace cannot reflect the capacity in pricing because of the unnatural use of credit to underwrite those prices higher than the market value.

Many cities, counties, states and agencies of the Federal government are using credit and leverage against future taxes and existing assets to boost the available budget moneys for projects, services and administrative costs that consequently have skyrocketed.

Where there is a greater pool of money to access, costs are found to accommodate those higher financial quantities, even though it is acquired through leverage. It isn’t because projects actually would have cost that much to administer or to complete – it is based on a synthetically created larger pool of money to access.

Then, the same government budgets have used “mark to make believe” and “off-balance sheet’ accounting to manipulate reality for bond investors, the public and their oversight / regulatory committees. It is a fallacy based system that is not only out of touch with reality – it is unsustainable and has been simply a disaster waiting to happen. And, it still is because it is being allowed to continue in the same form using the same deficient processes.

As admirable as President Obama’s speech was last night, the Republicans were staunch in their determination to undermine whatever efforts are being made in order to “win” what they perceive as their own standing in all this.

It is a direct result of their governance and of many other members in both parties making choices that were not overviewed in light of macro-economics, but rather somewhere close to the end of their noses where immediate profits and opportunities to have quick, easy money available undermined the use of any good sense.

Even today, as changes must be made in order for our country to survive, there are efforts being made by Republican party owned governors, legislators and agency heads throughout the system who are bound and determined to undo whatever is done, to destroy any changes made and to have their way regardless of the cost to us all. That is a sham and a shame.

Last night, my Dad was very amused by my assertion that we are in a Depression – not a Recession, not a deep Recession, not a small “contraction” in our economy. I thought about it quite awhile last night after getting off the phone with him and decided it wasn’t worth telling him why I believe it is so.

Let him remember it how it was, when America was strong and filled with promise and hope and opportunity for all. Let him think it is all fine and will correct itself real soon with all these bright people up in Washington working on it. Reality doesn’t really matter all that much, does it?

– cricketdiane, 02-25-09

** Besides which, there is no one that is going to change it, no matter what they do. That is the macro-economic fractures in the foundation of an economy when credit is its basis. It has just been a matter of time – complexity upon complexity, default upon default, distrust upon distrust, a closing of opportunity to all at the hands of a few. It was a disaster in motion.