In mid to late 2006, when the Fed had been raising interest rates, the folks in places like California who had bought very expensive homes on sub prime, variable rate mortgages got clobbered. Of course, there was a bubble in housing and prices were getting to levels that were just not sustainable. The last flippers holding the bag lost. Then, the Fed reversed course and the dollar started to slide in value, feeding into the currency trading ties into the commodities’ markets, like oil. So, many of the people on the edge to begin with because of their mortgage payments, got killed when they could no longer afford to drive. Discretionary income was going right out the window and flowing to places like Moscow and Caracas.

It got worse in 2008. And the dominoes were falling.

A lot of the sell off in equities after the election is investors bailing out before the Obama tax hikes, or the Bush tax cuts expire in 2010. Investors are looking at how the carbon tax will affect consumers and producers and they don’t like what they see.

How is Oobonga and Congress going to pay for it all (the stimulus package)? And if they raise taxes AND decide to anchor economic policy to the junk science of AGW, the news for the country will continue to be negative.

This is going to be Jimmy Carter, Part II. Four years and out for these amateurs.