Wall Street - in particular the biggest "banks" - packaged up and sold enough swindles to unwind 2500 years of western civilization.
Say What? By James Howard Kunstler
on June 28, 2010 8:43 AM
I think America missed something. It must be the time of year, what with inhaling all those fumes from the charcoal starter... and fueling up the Jet-skis so as to turn a perfectly good mountain lake into something like a Cuisinart on the guacamole setting... and the rousing evenings in the Nascar parking lots hitting palmetto bugs with your wiffle bat... and all that anxious waiting for a 10W-40 hard rain to fall on the Gulf Coast states - but President Obama made a very interesting remark when the financial regulation package passed in the senate the other day. He said the bill would make sure that "Main Street is never again held responsible for Wall Street's mistakes."
That was the sound of something going over America's head. Something about the size of Rodan the Flying Reptile. And frankly I don't think the president even meant to be coy or deceptive. It just means he doesn't get it either. Never again....
What the f-ck?
Why even this time? Why isn't there an army of federal attorneys out there, their teeth bristling with subpoenas, beating the bushes in every lane and skyscraper floor of lower Manhattan (and Fairfield County, Connecticut, not to mention a thousand office parks around the USA) to roust out the grifters and swindlers who took Main Street to the cleaners this time.
The audacity of cluelessness! And the hilarity of "next time."
Earth to President Obama: there isn't going to be a next time. This time was enough to git 'er done. Wall Street - in particular the biggest "banks" - packaged up and sold enough swindles to unwind 2500 years of western civilization. You simply cannot imagine the amount of bad financial paper out there right now in every vault and portfolio on the planet. Enough, really, to sink any company even pretending to trade in things more abstract than a mud brick or an hour of labor. What's more, the cross-collateralized obligations between them are so vast and intricate that all the standing timber in North America could not be fashioned into enough pick-up sticks to represent the hideous death-dealing tangle of frauds waiting for the wing-beat of a single black swan to come crashing down.
Go out and get a copy of Michael Lewis's recent book The Big Short for a close-up view on one micro-corner of the investment world. You will discover that the people fabricating things like synthetic collateralized debt obligations (CDOs) had no idea what the f-ck they were doing - besides deliberately creating documents that nobody would ever understand, that would never be unraveled by teams of law clerks or secret words or magic incantations or prayers to some dark hirsute deity, and were guaranteed to place in jeopardy every operation of the world economy above the barter level. Sorry to invoke the hoary old metaphor about the horse being out of the barn - but the larger problem is what the horse left behind in a great steaming mound clear up to the rafters. There was nothing to understand in all this crap, except that betting against it was a good idea, and then only for those who placed the earliest bets - because everybody else is going to get just as screwed as those who stuffed their vaults and portfolios with Triple-A rated horsesh-t.
What banks and governments have been doing for the past eighteen months is a dumbshow meant to distract the public from the fact that the world financial system has been effectively destroyed. There isn't enough money left in the known reaches of the universe to pay off the outstanding claims. In fact, not even close. Everything that proceeds from this fiasco will be in service of impoverishing most of the population and, incidentally, probably bringing down governments and, with them, convenient social usufructs such as due process of law and civil order. What remains - what you're watching right now on CNN or Fox - is just a representation of the former structures of civilized life, what Joe Bageant refers to as "the hologram," a kind of 3-D picture you can see around, that looks like reality, but is actually immaterial, a collective hallucination. It's comfortable living in a hologram - until you discover that you're in one.
in the summertime, when there are weenies to grill and Jet-skis to commit suicide on, the public is usually having too much fun to pay attention to anything. Maybe this is how come summertime is also when lots of bad sh-t happens, or gets ready to happen. The guns of August... blitzkrieg... 9-11... the death of Lehman Brothers....
A few other social notes this week: Something else the public (and, of course, the news media) missed in the General McChrystal affair. It wasn't just that the general badmouthed his civilian superiors. It was that he was not the other thing that an army officer should be: a gentleman. He was a lout who reveled in everything lowest in his own culture. He was a man so disturbed by having to spend a night in Paris at a good restaurant with civilized people that it seems to have driven him plumb batshit. General George Patton - a man renowned for his own profane intemperance - would have boxed Stanley McChrystal's ears for his sheer childishness and assigned him to Graves Registration. When the USA falls apart in a few years, let's hope General McChrystal doesn't ride over the horizon on a white horse with an army of Af-stan vets flexing their neck tattoos behind him.
Oh, and something else: notice that the Deepwater Horizon oil gusher has vanished from the front pages of The New York Times and even The Huffington Post. Nobody gives a sh-t anymore. Bring it on.