Regulations Eroding Economic Lifeline: Credit

While many of our citizens remain unaware, a slow creep of regulatory instruments are eroding the lifeline of our economy; credit. If you are working hard to make ends meet and catch bits and pieces of newscasts from national and local news outlets in the mainstream media, you likely have no knowledge of how serious this issue is.

Rahm Emanuel, former Chief of Staff of President Obama said the administration should never let a crisis go to waste. They took advantage of the fear in the aftermath of the banking crisis to power grab much of your liberty when it comes to your finances, likely without your understanding of the "small print."

It has been three years since Lehman Brothers collapsed, and although many of the experts say Uncle Sams balance sheet is improved and the worst is behind us, I don't buy it. Neither does Home Depot founder Bernie Marcus, who joins Mary Thompson, David Faber and Joe Kernen for a frank discussion on CNBC's Sqauwk Box this morning. Take a listen:



The experts are almost always wrong. Discredited economist Paul Krugman and social economic pontificator Jared Bernstein coupled with comments such as "The housing crisis is contained" and "Pass the stimulus and unemployment will not exceed 8%" come to mind.

Bernie Marcus is not wrong, and listening to him will get you more saving, more doing.

With a new wave of foreclosures coming, property owners will be seeking opportunities for refinancing among banks, but the big banks are not able to extend the necessary credit due to strict regulations. These banks can borrow from the FED at zero and lend to the public at 5%, and a banker can have a fine career in banking doing that. But this lending is not taking place, and the alternative option of small banks is being crushed by Dodd-Frank, which quite simply is killing small banks. Regulations have wrecked the residential appraisal industry, spearheaded by The Architect of Ruin, Andrew Cuomo. These regualtions allow the government to pick winners and losers as well, which raises costs and handicaps the entrepreneur.

The markets have been up this week, and given all the horrendous economic news this week, such as an unexpected rise in jobless claims, inflation and sobering news on poverty, you may wonder why. Euro Tarp! You got it, the FED is essentially bailing out Europe, which can be equated to QE3, a new installment of quantitative easing on a global scale. A socialist European dream! Of Course, I am quite sure this will fix the problem with the PIGS? Well, it won't work!

The economy is in crisis, and we are far from out of the woods. Uncle Sam is a major event way from taking a substantial leg down, and the FED is short on tools to fight the problem due the poor crony capitalism decisions made under Obama and Bernanke. Could the crisis in Europe be such an event? If so, will global governance, all for our benefit no doubt, claim more of our liberty in creating a global banking system, which could lead to a dollar collapse?

The big banks continue to get bailed out while the small banks are being killed off by excessive regulation, crippling the credit line for consumers, who are on life support. Collusion between the administration and the FED is extremely alarming, contributing to the unnecessary extension of the economic crisis we are in.

All these goings on are the antithesis of what should be taking place, and strongly appear to be orchestrated. These are critically troubling times, and our country as we know it could hang in the balance. As I pray we make it to November 2012, we must hold our freedoms dear, protect our sovereignty and remember that free market capitalism is indeed the best path to prosperity.

Squawker Silenced

Certainly saddened today to learn of the passing of CNBC's Mark Haines, the veteran co-host of Squawk Box and later Squawk on the Street.

Haines was a straight shooter and I spent most every morning over the last 15 years or so listening to his interviews and analysis along with David Faber and Joe Kernen. I always loved the "briefcase indicator" in attempting to gauge the direction of the FED on interest rates based on the volume of Chairman Alan Greenspan's briefcase. Fun times.

Haines also did a masterful job on September 11, 2001, bringing us the dreadful events of that morning all the while knowing many former guests and current friends were in peril.

There is an abundance of talent over at CNBC, but from the beginning Haines was a centerpiece. Along with much of the street and viewers across the globe, I will miss his smart elect remarks and pinpoint interviews.

A Jumbo Headache

The ratings agencies, who had absolutely no clue with regard to the mortgage backed securities which have played a major role in this housing crisis, today lowered the ratings on jumbo loans from a period before the mortgage fire really began burning.

Please take a listen as David Faber of CNBC explains:



As Faber indicates, this goes straight to the level of unemployment, which is much worse than the numbers indicate.

If you think in terms of a roller coaster, the sub-prime borrowers have already been to the top and have now emerged on the other side of the valley. Mid range borrowers are in the valley and the high end borrowers, saddled with job losses and coupled with a severe contraction of credit options and a reduction in revenues and profits associated with their employer, are bolting into the valley.

Unfortunately, this housing crisis would be behind us if not for implemented policies by the government which handicap any expansion of the economy. Excessive new regulation and taxes are a major problem, but the uncertainty of potential increases in these areas, read Cap & Trade and Health Care Insurance Reform, virtually prohibit employers from expanding their payroll. In addition, a value added tax is being discussed.

Consumers, who cannot borrow to escape the financial constraints they are mired in and are scared about the potential of their employment being eliminated, have drastically cut back on spending. This is crushing many industries, including retail, where lower level workers are prevalent. And, if you can believe it, the minimum wage is set to be raised, which will further reduce employment in lower income positions.

Virtually every position the Obama administration has taken has been the wrong one, and a second stimulus package that is being discussed, is certain to follow on the heels of the first one, as a colossal failure. The economy is certain to remain shackled with excessive regulation and taxation in place. Until the government gets out of the way of small business, limits regulation and taxation and allows the free market to function properly, GDP, and thus prosperity, will be declining.

Call your Congressman and Senator today!

Regarding Arrogance; Lets Be Frank

On the subject of the regulation of pay, Mark Haines, David "The Brain" Faber and Rebecca Jarvis of CNBC have some questions for the genius at large, Congressman Barney Frank, D:MA.



That was not pretty.

When you think about it, it is mind boggling that this imbecile wants to regulate pay when the financial position of country is plummeting do in large part to the housing crisis, which as Chairman of the House Banking Committee, he had no idea of.

Frank apparently has no clue on a myriad of things. This arrogant representative was unaware his gay lover was using his home, his own home mind you, for prostitution and now he should be regulating our pay? You have got to be joking! He should not be in charge of anything, particularly in dealing with the peoples money.

Frank should resign, for among other things, his role in the complete lack of governance over Fannie Mae and Freddie Mac, who donated heavily to Frank in the form of campaign donations. The shenanigans of Representative Frank are numerous, and he should be held accountable. Since the voters of Massachusetts won't toss him out, at least he could answer our questions.