Ladeeezzzz And Gendlemun! Drum-Roll, Pleeze, For The Chart Of The Week!

Doug Ross shares it with us--a chart of the balance sheet of The Federal Reserve.

It states its figures in millions, so that means it holds about 1.2 trillion dollars in mortgage-backed securities. What could possibly go wrong?

OS drove through a very posh neighborhood of Nashville this afternoon on an errand. He's driven through that part of town for about forty years now. The 'for sale' signs are beginning to blossom, and one huge house, as yet unoccupied, goes to auction on September 10.

This in conservative Nashville, in the staidest neighborhood of the city.

Holy shit! Houses at auction? On Tyne Boulevard? This sort of event makes 1.2 trillion of residential real estate securities look like a really bad bet. Betcha the neighbors are crossing their fingers that bidders show up and bid it up to the five million the auctioneer is trying to flog it for.

Betcha he won't come close.

Ross links to a most erudite article, with its own series of sobering charts, well worth reading. 

Hussman, the author, makes a cogent summation:

Good policy is not rocket science. It begins with the refusal to make people pay for mistakes that are not their own. This economy continues to struggle with a fundamental problem, which is that debt obligations exceed the ability to service them. While policy makers have done everything to preserve the patterns of spending and consumption that created the problem in the first place, we have done nothing to restructure those obligations.