Kass: Ben Stein Whistles Past Mortgage Mess

This blog post originally appeared on RealMoney Silver on Aug. 15 at 8:20 a.m. EDT.

From my perch, one of the most astonishing features of the recent decline in stocks and rise in credit spreads is the smug rejection of the notion that "things have changed" -- particularly of a credit nature.

No better view of the ostrich-in-the-sand mentality was delivered than by warm and cuddly actor/lawyer/columnist/comedian/economist/
Clear Eyes shill Ben Stein in this weekend's business section of the New York Times, and then again on CNBC Monday evening.

In the past, I have admired the common sense and logic of argument in Stein's writings. Maybe Stein was acting this week, as he did in the role of the economics teacher in the classic movie Ferris Bueller's Day Off. After all, on Sir Larry Kudlow's show, Stein suggested that the mortgage lenders will "end up fine," and he concluded that the subprime mess is a media hoax in an attempt to "talk America into a panic." Excuse me?

Tell that to Thornburg Mortgage (TMA Quote), which is temporarily ceasing loan production, Countrywide Financial(CFC Quote), American Home Mortgage, Accredited Home Lenders (LEND Quote) or the millions of individuals who are about to lose their homes and those that can no longer get a mortgage. Or tell it to the investors in the Bear Stearns (BSC Quote) hedge funds and the Sentinel Cash Management Fund.

Tell it to the homeowners who live next to foreclosed homes who are about to rein in their own spending for fear that they might be the next foreclosure. Or tell it to the Wal-Mart (WMT Quote) customers and mall customers who are no longer buying. Or tell it to the U.S. banks that are caught with hundreds of billions of dollars of illiquid bridge loans. Or tell it to the foreign banks that are taking multibillion-dollar writedowns and are reining in their credit activity. Or tell it to the employees at brokerage firms, banks and retailers who will soon be laid off.