But the Tories, having got it wrong until now, have proceeded to reverse themselves and got it wrong again. They went along with Brown's reckless spending programmes in times of plenty solely as a piece of political positioning, .... The withdrawal of the hope for a market in mortgage debt meant the price of mortgage backed-securities fell to new low levels heightening the toxicity problem because they have instantly devalued the new capital injected into the banks. ...

These policies stimulated growth by lowering mortgage rates and creating the housing bubble. That bubble is now long gone. As housing continues to decline as a result of Alt-A and option ARM mortgage re-sets, the economy will need to find another source of expansion ... The hope is that it will reverse later this year. Bernanke has said it will. Geithner has said it will. But both have said it will be a weak recovery. Geithner has said that unemployment will peak in 2010. ...

Instead, Cerberus is scrambling to keep GMAC afloat under the weight of its mortgage business, Residential Capital, LLC ("ResCap"), which has suffered enormously from the collapse of the housing market. Not sufficiently sated with swallowing .... Consecutive declines of this magnitude reverse increases of similar magnitude earlier in this decade, showing the dark side of the real estate bubble that loose monetary policies engendered. Grpah 4 - S&P/Case-Shiller US Home ...

The subprime mortgage problem was grossly under-estimated. The Hat Trick Letter called it the beginning of an absolute bond contagion, a global credit market collapse correctly forecasted. Central bankers, led by the clueless USFed Chairman Bernanke, ... The Competing Currency War is brisk, more like a Reverse Beauty Pageant. As monetary crisis comes full circle, pushed by gargantuan government deficits on a global basis, the US$ will again resume its powerful decline. ...