I am starting to think that this economic situation is starting to get serious.  I can hear you all out there saying, “Do ya think?”

Follow this link to the video of the February 27 issue of Bill Moyers Journal.

Bill Moyers talks with economist Robert Johnson, who decodes this week’s news on the bank bailout, with a hard look at the international ramifications of the plan and a discussion of why nationalization has become a flash point.

After you listen to the pessimism, remind yourself that this interview was done before this weekend’s really bad economic news about how far down AIG is falling.

Moyers kept asking what Johnson thought the worst case scenario would be.  Despite all the apocalyptic things that Johnson said in reply, I think he was still afraid to give the real answer.

See you in the breadline.  I hope they have whole wheat.

Follow this link to the story by William K. Black, Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle. He tells how the FBI warned of an “epidemic” of mortgage fraud back in September 2004. He goes on to show that the ratings agencies like Standard and Poors were complicit in keeping the fraud hidden.  Banks that packaged these mortgages and sold them as investments did not do even a minimal amount of due diligence.  Neither the banks nor the rating agencies  even requested the documentation that would have been needed to gauge the risk of the investment.

The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence.

As a novice investor, I can only say, “Live and Learn.”

Competence in the executive branch does matter.  I believe that the Obama administration has the competence, but only time will tell if I am right.  Let us hope that the voters never forget that it is nice to have a beer with a friend, but as President you want someone who is competent.