You have not and will not see this reported in the mainstream media or discussed by Ben Bernanke, but it is in fact the crux of the problem – the only way “out of the box” is to try to ramp lending somewhere so as to create yet more debt to maintain final aggregate demand. The amount of debt required to do so has gone parabolic and cannot be paid down privately; ergo, the attempt to shift it all to the government via the alphabet soup programs.

This is doomed to fail despite any transient appearances of success as the amount of debt required to maintain the pulled-forward demand is now growing exponentially.

Yet there are only two choices: Face this reality, default the debt and accept a 20% or larger GDP contraction, or keep trying to stuff the federal government (since the private sector has hit the wall and cannot absorb any more credit) and when THAT blows up we lose our government and political system.

The math is irrefutable and Bernanke is fully aware of it, as are the wonks in Wahington DC.

They simply don’t care about the truth…

http://market-ticker.denninger.net/archives/1273-The-Idiocy-Of-The-Media,-Fed-And-Government.html

As much as I like Obama, he has really screwed up by appointing Geithner. Geithner still thinks the problem is a liquidity problem. He is a fool.

The second massive foreclosure waive is coming. Between the option-ARMs and unemployment, we are going to see another massive wave of bank failures. Bank of America will not survive this one.

The GOP had eight years to ravage the American economy, and it looks as if things — if they continue steadily — will make the economy look good again by the end of 2010 (including unemployment, which lags behind market growth).

So yeah, we’ve got adults back in charge. And the first thing they had to do was clean up yet another Republican disaster. Of course, Obama’s got to take care of the GOP’s unfinished wars in Iraq and Afghanistan as well.

That’s what I’m saying.

How many corners is that now?
Quite a few less than W. turned in Iraq.

Seriously, can you imagine how many different varieties of shit we’d be in if Birdman McCain and his wacky sidekick Sally were in office?

Yeah, I said it.