Office of Thrift Supervision

Observe the Iron Triangle, the bureaucratic model of power and political economy, in operation.

Since we have a federal executive Office of Thrift Management, thrift institutions are efficiently managed toward the constitutional legitimacy of the general welfare, right?

IndyMac bank is a current case study with deposits of $19 billion.

The FDIC has seized IndyMac's assets and its Office of Thrift Supervision will "supervise" liquidation of its assets due to what the supervisor describes as "a liquidity crisis."

There was a run on the bank back in June when a US congressman urged the OTS to do some supervising for a change, but of course, it was too late.

The MBA in charge of IndyMac worked up a scheme using the FDIC for $5-10 billion of government-backed loans (the federal deficit) to keep it solvent which failed due to the run on the bank.

Taxpayers are liable for about $6 billion of government insured deposits that will prevent a Depression-era unwinding of financials. With the trickle-down tax code currently in operation, the avergae income will be paying the liability disproportionately to income.

In conclusion, the OTS is functioning to consolidate the capital, that is the direct cause of the crisis, even more.

The "liquidity crisis" the bureaucracy refers to is the lack of income required to pay the outstanding mortgages and artificially inflated prices of the homes--the whipsaw effect.

Back early last year I was asked about the health of mortgage finance. My recommendation was to sell because the savings rate was negative and most of the mortgages were double mortgages on unsustainably inflated asset values; in other words, because the market was being racketeered by MBA's!

We need to provide a more pluralistic environment for MBA's to do something besides racketeer in loyalty to a consolidated capital. We might want to try financing economic growth with that capital through a more progressive tax code and reinvestment that is NOT subsidizing consolidation of the capital!

The savings rate is still negative, even more so as more than half of households have no disposable income after paying the bills (deflation--the "mental" depression we are all "whining" about).

Adding to the strength of the negative macro indicators, and our mental depression, is the negative interest rate as well. Please allow me to officially whine about that! The policies of Phil Gramm and cohort are directly responsible for this strong negative condition...wah!!

I'm through whining!

Dump the Hamiltonians!

That will fix the problem!

Join the coalition for Obama!

Very best wishes.