A Libertarian Defends Local Bankers

An analyst of the banks and an increasingly visible commentator on the foreclosure mess, R. Christopher Whalen puts in a good word for local bankers on his blog at Reuters.com:

The bad guys in the housing bust are not the banks who must foreclose on homes, but the politicians in both political parties who used reckless housing policies to further their personal interests. This is a bipartisan national scandal. Barney Frank, Chris Dodd, Phil Graham, Alan Greenspan and their contemporaries are the authors of our collective misery, not the local banker who must clean up the mess created by government intervention in the housing market.

Read the rest here.

Decades of Economic Shrinkage Ahead

"Just as the housing sector and the related debt was the driver of the US economy over the past several decades, I believe that the deflation of the housing market could spell an equally drastic period of shrinkage in economic activity in the US and around the world."

-- Chris Whalen, here.

ZIRP is Legalized Theft

The line of the day comes from Chris Whalen, writing at Reuters.com here about the damage the Fed's zero interest rate policy is doing to the country:

Fed Chairman Bernanke and the other members of the FOMC are killing the real economy to save the banks — but none of the benefit flowing to the banks is reaching US households. In fact, the Obama Administration has been providing political cover for the Fed to conduct a massive, reverse Robin Hood scheme, moving trillions of dollars in resources from savers and consumers to the big banks and their share and bond holders.

Read the rest at the link, at your peril.