This article I wrote tries to explain how some of the assumptions concerning housing may not be valid. I wrote this in 2009 and the topic still remains absent from any housing financial forecasts.

Warren Buffet gave a prophetic pronouncement back in 2003 about the Derivatives market, seeing the exponential dangers of this “paper-thin” type of investment.

Buffet did not mince words. He called them “financial weapons of mass destruction“:

Buffett warns on investment ‘time bomb’
BBC – 4 March, 2003

The derivatives market has exploded in recent years, with investment banks selling billions of dollars worth of these investments to clients as a way to off-load or manage market risk.

But Mr Buffett argues that such highly complex financial instruments are time bombs and “financial weapons of mass destruction” that could harm not only their buyers and sellers, but the whole economic system.
[...]

Some derivatives contracts, Mr Buffett says, appear to have been devised by “madmen”. [...]

BBC Link

It looks like the Democratic Leadership will get its wish, a sprawling “health care reform” bill, mostly focused on changes to the health insurance system that deliver many millions of new customers to the health insurance industry. The Democrats are making many upbeat claims about this bill, calling it historic and claiming that it will produce affordable “universal” health care coverage for Americans, and for 32 million more than are covered by insurance today, while blithely ignoring the contradiction between these two statements. There have been many recent analyses of these claims, and I won’t add another one here. The analysis of the FDL team authored by Jane Hamsher, contrasting mythical claims about the pending bill with “the truth,” is the best of the analyses of the bill I’ve seen in the past few days.

So, assuming that the Leadership’s HCR legislation passes the Senate and moves to the President’s desk for final approval, I’d now like to look forward and ask where the Democrats stand politically in the wake of their nearly one year investment in painstakingly crafting their “health care reform” bill. To put it crassly, what will they have to run on that means something to most, or, at least, a large number of voters?

This week’s Audit tackles executive malfeasance on Wall Street and its consequences for ordinary citizens.

This week, there were a lot of reactions to Tim Geithner’s new bailout plan, including commentary from David Corn at Mother Jones, Ezra Klein at The American Prospect and Josh Marshall at Talking Points Memo. The Weekly Audit also highlights a couple of pieces on much-needed structural reforms to the U.S. corporate landscape by David Moberg of In These Times and David Korten at Yes!

The phrase “ownership society” was removed from Bush’s bio on the White House web site. Why?

The Bush Administration got us in a world of hurt by trying to make their own reality. And now Obama’s economic team is in that same business, and needs to be stopped.

Cross-posted at River Twice Research.

After months of confusion, we are about to close a painful chapter in the economic crisis of 2008-2009. With the imminent passage of the $800 billion stimulus package combined with the roll-out of the next stages of the government-orchestrated bank bailout and recapitalization, we are about to end the talking phase and enter the doing phase. While no one can say for sure whether these plans will work, it’s certain that they will have an effect.