Guest Post: Extend And Pretend - A Guide To The Road Ahead | zero hedge

(c) 2010 F. Bruce Abel

A conversation with Neil Bortz at a youth baseball game Thursday night causes me to start a new topic: "extend and pretend."

The Fifth Thirds of the world are told by FHA and the like "extend and pretend." When your good customers' loans come due, close them out and do not relend. Use your government money as follows: with your questionable loans, pretend they are good for it and extend the loan. That way nobody has to recognize the loss!


Guest Post: Extend And Pretend - A Guide To The Road Ahead zero hedge: "There is no mistaking the fact that the US has a sovereign crisis as measured by many indicators such as: Debt to GDP, deficit percentage, balance of trade, state, city and local government financial imbalances, underfunded pension plans and excess unfunded entitlement programs. However, relative to Europe, the US is still lagging and therefore is not currently getting the media attention that it will soon receive."