Doesn't the 'mort' mortgage mean death? Read the small print!

Bloomberg News reports:

"Global stocks tumbled, led by bank shares, as concern swept through financial markets that a widening credit crunch may hurt economic growth and earnings. A gauge of U.S. stock market volatility climbed to the highest since April 2003. The Chicago Board Options Exchange Volatility Index [a k a the panic index] gained 10 percent to 29.12. Higher readings in the so-called VIX, derived from prices paid for S&P 500 options, indicate traders expect bigger price swings in the next 30 days."

But, W. says 'don't worry be happy,'

"The fundamental business of the country . . . is on a sound and prosperous basis. "

Oh, sorry, that was Herbert Hoover right after the stock market crash in 1929.

W. actually said yesterday, "The fundamentals of our economy are strong. . . I'm told there is enough liquidity in the system to enable markets to correct."

Man, that's a relief! We got that good liquidity goin' on.

"One thing is for certain," W. says, "is that there needs to be more transparency in the -- in financial documents. A lot of people sign up to something they're not sure exactly what they're signing up for -- more financial literacy I guess is the best way to put it. "

Yeah, that's it, they didn't read the small print. The global finanical system is going to hell in a hand basket, a la New Orleans, and W. says 'read the small print.'

But what about regulation, you say? Why didn't anyone in W.'s administration notice these scheisters were out there signing up people to buy houses that in some cases didn't even have job?

Now, that's all going to change, though, I read at Mortgage News Daily that,

"At the end of June the five agencies that regulate federally chartered banks and their subsidiary lending corporations issued final guidance to those institutions regarding subprime lending, particularly the so-called exotic or non-traditional loans that are threatening to bring down those lenders who haven't already filed bankruptcy or shut their doors. . . In a press release regarding the GSE letters OFHEO said that Fannie Mae and Freddie Mac have taken proactive steps to assure that (loan) sellers are clear as to what mortgages they will accept and reject.

All mortgages sold to Freddie and Fannie with an application date on or after September 13 of this year must conform to the guidance but lenders are urged to put the new rules in place as soon as possible." [Not a moment too late!]

Uh, guys, the horses are already out of the barn and way down the road.

China calls in its debts

The Daily Telegraph reports:

"The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation."

This is what happens when you allow yourself to get into hock. The US is currently running a $836 billion trade deficit with China and now Congress thinks it's going to threaten the Chinese with trade sanctions over their manipulation of the Yuan. The problem I see here, from my very limited understanding of international finance, is that they've got us over a barrel.

According to a July 7th article I came across from Xinua, the Chinese propaganda arm:

"America's net national saving rate plunged to a record low of one percent of the national income for the 2004-2006 period, leaving the United States no choice but to accumulate trade deficits to attract foreign capital. Trade sanctions such as tax and countervailing duties are functional equivalents of tax hikes on U.S. consumers and American multinational business. In response, China can put reciprocal tax on products sold to the United States and diversify China's foreign exchange reserve from the U.S. dollar."

Which what they are now more openly threatening.

This news combined with the subprime lending crisis is really going to make the next few months really interesting. Of course, W. says he hasn't seen this story about the Chinese calling in our debts, but he says,

"That would be foolhardy of them to do that. If that's the ... position of the government, it would be foolhardy for them to do this."

Well, great, but he's gone fishin' so those China men will just have to cool their heels until he gets back in September. If there's anything to come back to, that is. No worries for him, though, if the economy goes to hell, Daddy can borrow some money from the Saudis.

Fore!

Author's note:

My apologies for not posting so much this week, but the heat and the August doldrums are just killing me. It's not like there's that much going on anyway; DC is a ghost town, W. is on vacation -- again -- and the Iraqi parliament has taken a powder as well. (It's 130 degrees there!)

So, just hold tight and rer-read all your favorite posts from weeks past.

Our underpaid protection.

The Miami Herald reports that many former Latin American soldiers are heading to Iraq to work for security contractors who pay them about $1,000 to $1,500 a month, or about 5 to 7 dollars an hour. (Nice work if you can get it -- at Wal-Mart.)

The Herald:

"Peruvians guard the outer perimeter of a U.S. installation in Basra. Chileans protect the governmental Green Zone in Baghdad. Hondurans have provided security within the terminal at Baghdad International Airport. Salvadorans once protected the Green Zone in Baghdad, but they and some Ecuadoreans reportedly have left the jobs after media in their home countries labeled them 'mercenaries.'''

One of the companies employing these poor bastards is a firm called Triple Canopy, who Source Watch says had by 2005 already "accumulated over $90 million in government contracts." Triple Canopy guards the "heavily fortifided" Green Zone, and you know how well that's been going of late.

In 2005 the company beat Global Strategies Group to get the contract to guard the much mortared enclave.

According to Source Watch a big concern back then was:

"That Triple Canopy employees have been recruited mainly in Latin America and speak little English. Global Strategies relies heavily on British-trained Nepalese Gurkhas and Sri Lankans, a majority of whom speak at least some English and often speak it well. . .

'A delay in communicating a problem because the guard cannot speak English down his walkie-talkie can have fatal consequences,' said a security specialist familiar with procedures in Baghdad."

And even better than that, the Herald Reports that these "Latin Americans typically served in the military back home -- many fought leftist guerrillas in places like El Salvador and Colombia -- and were taught by U.S. instructors, making it easier for them to use U.S. weapons and work under American security procedures. "

Which is great but, "Fights already have broken out between Peruvian and Chilean guards, according to an American businessman living inside the green zone. 'Apparently they had some scores to settle from past conflicts in that continent,' he said."

No wonder our diplomats are having to scurry around in flak jackets inside the Green Zone. Well, I guess, you get what you pay for.