This morning Don Imus asked: are we in recession?
Jim Cramer replied: Yes, of course we are.
There you go. We all know it. Pretending won't make it go away. Now, we can deal with it. And, as Cramer added, it will be hard.
Weird thing about life. It gets hard sometimes. The first step to solving a problem, to dealing with an addiction, is admitting you have it.
They went on to discuss the subprime market, Imus asking for a simple explanation, and Cramer supplied it. Pretty much all comes down to "skin in the game"--and haven't we heard that before. Those naughty homeowners who had no skin in the game--got those 100% loans with no money down and no ability to repay in many cases.
Except, wait, somebody else had no skin in the game either. And that's the first lender, because First Lender turns right around and sells the loan bundled with a whole bunch of others and finally they end up on the desks of places like Citicorp and... well, how long do you think it will be before these guys go whining to the government for a bailout because they're so vital to the economy....
Seems to me a little kitchen table economics--call it the "Get Real Principle"-- needs to be exercised every step of the way. Starting with common sense regulations for the lending industry so the parasites and pirates don't screw things up for everybody from the homeowner to the global economy.
PS's PS: Speaking of Get Real Principles--principles, how's that for a concept!--it doesn't get more real than 2006 Nobel Peace Prize winner Muhammed Yunus and his microcredit program. You can learn more about that on Saturday afternoon when Firedoglake hosts a Book Salon conversation with Mr. Yunus about Creating a World without Poverty. Whether you lurk or participate, I promise you will be enriched. Don't miss it!
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"The price of freedom is eternal vigilance."