Monday, September 22, 2008

Economics 101 as taught by Wheelgun Bob

"So, Wheelgun, what’s all this about the housing market-Fannie Mae-Freddy Mac-AIG-Lehman bailout bullshit?" I’m glad you axed me this question, you poor sods. Because now I will break it all down into easily digested nuggets that even readers of this blog can understand.

A few years back the money market funds were riding high on the coat tail of the 1990’s boom years. Prime real-estate and housing starts were up as well as sheds starts and outbuilding starts. Derivatives and leveraged debts outpaced the prime rate by an average of 3.7 points for the decade. Consumer debt was trending upwards but the trickle down from the stock market combined with the over exuberance of the dot com era (not to mention the dot org and dot edu eras) caused troubled assets to rebound into the early 2000's. As stagflation started to rear its ugly head, investors panicked and fled the money market funds and 401Ks, and next thing you know all this trending upwards hit a glass ceiling and had to overcorrect the housing market hedge funds. Then the bubble burst. The price of crude went sky high as the price of being crude went down. Due to the lack regulation oversight, regulation went wild and made investors do things they wouldn’t normally do such as wearing latex bondage gear. Then the Fed stepped up and stepped in it. With mortgage forecloses at a record high due to sub-prime lending coupled with the increasing costs of foot long subs, durable goods, pork bellies and mountain oyster orders tanked. Next thing you know, the Treasury bought up troubled assets which made the bond markets (all except George Lazenby's) go into a downward spiral and join the money market funds and 401Ks cowering under pregnant ants.

It seems simple when I explain it doesn’t it?

P.S. Feel free to use cut and paste and re-arrange the sentences any way you would like. It all makes about the same amount of sense-

The price of crude went sky high as the price of being crude went down.With mortgage forecloses at a record high due to sub-prime lending coupled with the increasing costs of foot long subs, durable goods, pork bellies and mountain oyster orders tanked.Then the Fed stepped up and stepped in it. Next thing you know, the Treasury bought up troubled assets which made the bond markets (all except George Lazenby's) go into a downward spiral and join the money market funds and 401Ks cowering under pregnant ants. A few years back the money market funds were riding high on the coat tail of the 1990’s boom years. Derivatives and leveraged debts outpaced the prime rate by an average of 3.7 points for the decade. Then the bubble burst. Prime real-estate and housing starts were up as well as sheds starts and outbuilding starts. As stagflation started to rear its ugly head, investors panicked and fled the money market funds and 401Ks, and next thing you know all this trending upwards hit a glass ceiling and had to overcorrect the housing market hedge funds. Due to the lack regulation oversight, regulation went wild and made investors do things they wouldn’t normally do such as wearing latex bondage gear. Consumer debt was trending upwards but the trickle down from the stock market combined with the over exuberance of the dot com era (not to mention the dot org and dot edu eras) caused troubled assets to rebound into the early 2000's.

Due to the lack regulation oversight, regulation went wild and made investors do things they wouldn’t normally do such as wearing latex bondage gear. Next thing you know, the Treasury bought up troubled assets which made the bond markets (all except George Lazenby's) go into a downward spiral and join the money market funds and 401Ks cowering under pregnant ants. With mortgage forecloses at a record high due to sub-prime lending coupled with the increasing costs of foot long subs, durable goods, pork bellies and mountain oyster orders tanked. Then the bubble burst. Derivatives and leveraged debts outpaced the prime rate by an average of 3.7 points for the decade. Then the Fed stepped up and stepped in it. Consumer debt was trending upwards but the trickle down from the stock market combined with the over exuberance of the dot com era (not to mention the dot org and dot edu eras) caused troubled assets to rebound into the early 2000's. A few years back the money market funds were riding high on the coat tail of the 1990’s boom years. As stagflation started to rear its ugly head, investors panicked and fled the money market funds and 401Ks, and next thing you know all this trending upwards hit a glass ceiling and had to overcorrect the housing market hedge funds. Prime real-estate and housing starts were up as well as sheds starts and outbuilding starts. The price of crude went sky high as the price of being crude went down.

1 Comments:

At 10:17 PM, Anonymous Anonymous said...

I feel nothing but contempt when I hear the word "leverage" used as a verb.

 

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