Extreme Measures

So forget all that you see
It's not reality
It's just a fantasy
--Aldo Nova

How weird is it getting out there? Take a look at some of the proposals and actions towards end-of-week:

1) Steve Forbes proposed on CNBC that the government suspend mark-to-market rules for one year so that securities holders would not have to realize near term losses. Guess I missed the textbook chapter on Pretend Accounting.

2) Government lowered the capital requirements for Fannie Mae (FNM) and Freddie Mac (FRE), freeing these government sponsored entities (GSEs) to purchase more mortgage backed securities on their balance sheets. How this does anything more than increase the leverage in an already overlevered situation is beyond me. (The obvious implication is that takes us one step closer to the nationalization of the housing market)

3) An editorial in the Wall Street Journal opines that the government buy and bulldoze foreclosed homes in order to reduce supply and increase prices.

No way, you say? Did you know that FDR oversaw the burning of crops during the Depression in a futile attempt to prop up ag prices?

no positions