Unbridled Chaos Due to Perpetuation of Fear

By Markos N. Kaminis - Economy and Markets

What we have here is unbridled chaos due to the perpetuation of fear. If we lived in the Dark Ages, I would likely be leading villagers in torchlit anarchy toward Washington. While the guys at Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) bear blame, like McCain notes, the regulators in Washington and New York, and more recently, the Congressmen who placed their own stubborn egos and partisan positioning ahead of the well-being of the people, well they would be bound and burned.

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Over the past couple weeks, Congress perpetuated fear, and they did so because of complete and utter inept financial markets understanding. We've always known there was barely a clue in the greater whole of the financial committees on the Hill, but this time that ineptness, and the lack of House follow through upon their Committee's decision, perpetuated fear and played great role in the collapse of financial asset values over the past week and a half. At a critical point, instead of taking the medicine Paulson presented, they spit it out and talked about how poor it was. They announced how bad this good medicine was, and how close to death the patient is as well. Thanks for nothing!

NOW YOU HAVE GOOD REASON TO VOTE YOUR CONGRESSMEN OUT! NOW THEY HAVE SOMETHING TO WORRY ABOUT. Without apology, Nancy Pelosi, Ron Paul, Dennis Kucinich and all those who effectively mislabeled the bill a "Wall Street Bailout" and then voted against it due to the public outcry they created, would be my first stop for the burning barrage. Their complete neglect of the sensitivity of the situation last week is the reason why financial markets have not stabilized and our economy remains on the brink. They placed their pride first, so anarchy is now unleashed.

Central Bank Actions Today

Today's Central Bank actions, first forecast and also supported here, are simply an attempt to turn sentiment and encourage normalcy. The problem is that the cat is out of the bag, Pandora's Box has been opened. Millions of aged Americans are looking up their portfolio values via angry phone calls to their brokers or through electronic means, and they are witnessing their nest eggs disappear. How do you expect folks whose income is greatly based on those portfolios to react? How would you expect these folks whose future depends on those assets to react? Of course, they are now selling in great numbers, and that pressure should continue. It's a great ship that is hard to turn, but steps like today's Fed action go very far in doing so.

I believe if there was confidence in our president, it would be the right time for a heartfelt prime time address. Perhaps, Senators McCain and Obama should take to the stoop together now and call on America to stand together, similarly to JFK's speech when he called Americans to think about what they could do for their country.

Let me do so, because in today's partisan environment, and so close to the election, I'm concerned that it might not happen. The candidates have smartly, and on good advice, avoided lighting further fears by discussing the economy in dramatic fashion that might serve political purpose. This is the difference between Barrack Obama and Nancy Pelosi. This is the difference between John McCain and the House Republicans who reportedly voted against the economic legislation due to Pelosi's uncalled for comments. Those Republicans were just as irresponsible as Pelosi was, if that's true, and Pelosi was horribly mistaken in abusing that position for political purpose. But Obama and McCain have darn good incentive to keep fear quelled, because one of them will inherit this mess.

I will follow this article up with a call to action for America. Stay tuned...

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