Throw 'em in dungeons
Wednesday, 3:12 pm
Over the past few days, I’ve been watching the goings-on in Washington and on Wall Street—just like everyone else. And like most everyone else, I’m not quite sure what’s truth and what’s sheer hyperbole, either. Aside from the given that we are in big trouble. This government and Wall Street have ‘invested’ all of us into near penury and, they sort of threaten, we’re going to have a Great Depression II if we don’t do something right this very minute. I gather. Of course, the question is—just how big is the actual trouble? And what does that trouble mean to everyone (like you and me) if drastic action isn’t taken Right Now. Has anyone from the gov’t taken the time to explain this to us in detail? They want great gobs of our money, our children’s money, and their children’s money to do the deed, but I haven’t heard any clear and detailed explanations. If so, I’ve missed it and I’ve been paying close attention.
I’ve heard generalized scary memes and platitudes being thrown around. But I haven’t heard anything specific. And that leads me to think that several someones are trying to fleece us some more in order to save their own considerable wealth. I don’t think my meager wealth or yours is anywhere on their radar. I just get that feeling, ya know. I’d kind of like to know whether to expect a Great Depression II even if we bail out all these financial mercenaries. I’d put the odds at better than 50%. What kind of guarantees does Paulson’s revolving $700 billion line of credit offer us?
Today I hear that Warren Buffett has enthusiastically endorsed the largest bailout in humanity’s history. Because, he says, it’s absolutely necessary. Warren Buffett is an influential person and people do listen to him. Now if there’s anyone who understands money, it would most likely be Warren Buffett since he has almost uncountable amounts to it. But the thing is, Warren Buffett just bought a $5 billion stake in Goldman Sachs and he sort of has a vested interest in a bailout. He is quoted as saying, “If I didn’t think the government was going to act, I wouldn’t have done anything.” So, we see that maybe Warren has his best interests in mind first and foremost. I have to discount his concern and enthusiastic endorsement several notches on account of that. Warren is more interested in preserving his money, not mine.
It all seems to suddenly center around Goldman Sachs, doesn’t it? I’ve seen their name in the media more than just about any other in the past couple of days. That makes me suspicious. I do know that our Treasury Secretary was recently their CEO who raked in millions and millions of dollars during the height of the housing and housing investment boom. He made enough money in one year to finance my entire town’s school budget for the next 30 years. All the while the good times were rolling, did we ever hear him get up on his soap box to demand more regulation and oversight? Or alert the public to the unsound investment practices going on right under his nose? I think not. I’m assuming that Paulson isn’t a stupid man and, therefore, I’m pretty sure he knew precisely what was going on and what the probable outcome might be. Now that all the little greenbacks have galloped out of the stable, now he wants to close the barn door and post sentries? He wants regulation. We need regulation and oversight, he said in front of Congress yesterday. Yeah, and I have a bridge....
So now we’ve had the five big investment houses on Wall Street go under—plus assorted banks, Fannie Mae, Freddie Mac, and the largest insurance company in the world (AIG). To the tune of multiple trillions of dollars, when it’s all tallied up. Because they were stupid and venal and greedy. They ignored every shred of common sense and violated the public trust in so many ways, I’m not sure we can even count them. I’m no economist, but even back in 2005, I was getting nervous thinking the whole thing was going to collapse and thinking perhaps I ought to consider selling my house while it still had value. You think the titans of finance didn’t know the same damned thing?
So, really. I want to know who is going to benefit from this $700 billion revolving line of credit that Paulson wants. Is it all of us or mainly the crooks on Wall Street? I think that since we plebeian masses are expected to foot this bill and suffer the consequences of Wall Street’s excesses in the coming months and years, we have a right to know exactly where the trouble lies in dollars and cents AND names. Do we really need to bail out the rich CEOs who got us into this mess? Will the world end if there is no more Goldman Sachs? We evidently will survive without Lehman Brothers (I’m still curious why they were the sacrificial lambs). Is there a better way for the money to be spent? I’m going to guess that yes, there is a better way. I want answers—crystal clear ones. And I’m not getting them. And, frankly, I don’t expect to.
I think that looting the treasury on this grandiose scale requires something a little more draconian than blank check bailouts and executive compensation, don’t you? I’m all for seeing heads on platters and the venal SOBs who got us into this mess reduced to penury. And jail time. I’d like it painful enough for them to remember it for the couple of generations. I’m vindictive like that and I’ll bet there are a lot of other people who feel exactly the same way. And if they don’t now, they will in the not too distant future, I have a feeling.
Beyond the larceny, this has the feeling of Shock Doctrine (Disaster Capitalism) to it, and I don’t trust that these people have our best interests in mind At All. The longer Congress thinks about it, the better for us. I hope they think about it a good long time. What are the chances? They have certainly heard from a lot of us, me included.
And if all of the above isn’t enough to worry ya, the IMF has informed Bernanke that they will be descending in the next couple of months to do a Financial Sector Analysis—a detailed examination of the entire US financial system. A rather embarrassing and alarming situation to be put in for the US who is, naturally, the biggest and best and most powerful. There’s gotta be some sly pay back in that decision somewhere. Nevertheless, when the IMF gets involved you might want to consider stuffing your mattress and hiding gold and silver coins under your floor boards.
WaMu, Woo Hoo
Monday, 11:14 pm
Catching up on the financial news tonight. Disasters seem to be thicker than fleas on a dog. I never actually wanted to experience a Depression....
Tonight my mortgage is with WaMu. I wonder where it’ll be tomorrow. Maybe JP Morgan Chase?
Or Wells Fargo?(eh, maybe not...sigh) Or...? Whoever it is, I hope it’s a nice stable bank with a long future and one that doesn’t lose my loan or otherwise screw up the transition. Nervous....
What a mess. Tomorrow is a new day with new fleas. Can’t wait to see who or what circles the drain and takes the plunge.
By the way, today John McCain said the fundamentals of our economy are strong. He picked one heck of a day to deliver that gem. I’m totally inspired by his confidence.
Sunday, 4:13 pm
I suppose that anyone with any kind of connection to the outside world (in the US, at least) knows by now that Tim Russert died on Friday. At work, with his boots on, so to speak. I have never thought that much of Tim Russert from a journalistic perspective. The less said about that the better, probably. However, I felt quite sad for his family, especially his son who is only a couple of years older than the lad. When I mentioned it to him, his response was subdued. “He was only 58?” he asked. I could see him putting himself in the Russert lad’s position. It shocked him. He looked at me and said, “Please take good care of yourself, Mom. I can’t imagine going through that yet. I feel so sorry for that kid.”
All that aside, I have gathered from reading the blogs that television has grown obsessively maudlin over the weekend. I am officially thankful that I do not have television.
What's a few million between friends?
Tuesday, 6:26 pm
Well this is a sad, sad article. It’s called It’s Not So Easy Being Less Rich. Now, we’re not talking about upper middle class people or even the comfortably wealthy. No, this article is about the very, very wealthy who are finding their net worths or incomes shrinking by a few million here or there owing to a deteriorating economy. They still have plenty of millions left, but the stress of keeping up with the really, really, really rich Joneses is causing them all kinds of trouble—gaining weight, drowning their sorrows, bags under their eyes. Stuff like that. Their friends and spouses and acquaintances might dump them if they don’t maintain the facade of their former fabulous wealth.
It’s all about status, you see. If you can no longer afford to charter a Gulfstream jet and have to settle for a Learjet instead...well, your friends and associates are gonna know you’ve hit hard times. And they might snub you the next time they pass your table at the Four Seasons or Barney’s. Probably an instructive lesson in fair weather friends.
I guess I feel sorry for them. Not because they’re less rich than they were, but because they don’t appear to have any sense of self-worth that isn’t dependent on great gobs of money. Without their fabulous wealth, they don’t appear to feel as if they have any value in this world. That’s what this stress and fear is all about.
I don’t suppose most of us would object to having a few million rattling around in the investment accounts, but good golly. How much money does it take to buy happiness and security these days? I don’t believe that money actually does buy genuine happiness, but this crowd would apparently disagree. There is something seriously out of whack when still having “way more than enough” is a fate worse than death.
I’m guessing that the book I just started reading, Dmitry Orlov’s Reinventing Collapse: The Soviet Example and American Prospects won’t be on their top ten reading list this summer. But I do have to seriously wonder what would happen to these people if Orlov’s proposals come to pass. It seems entirely possible lately. Really good read, in any case.
No one could have known
Thursday, 11:51 am
It is sort of fascinating watching this Carlyle Capital train wreck. I’m not sure why this one is getting so much more attention than any of the others beyond the fact that they are part of Carlyle Group. No one would have ever imagined this could happen to them....
According to Bloomberg:
The fund [Carlyle Capital] said in a statement that it defaulted on about $16.6 billion of debt as of yesterday. Lenders will “promptly’’ take over all of its remaining assets after it failed to reach an agreement with lenders, Carlyle Capital said. Any remaining debt is expected to go into default “soon,” the fund added.
The fund’s losses were caused by “excessive leverage,” said Arthur Levitt, a senior Carlyle adviser, in a Bloomberg Radio interview today.
"It was a poorly conceived fund launched at the worst time,” said Toby Nangle, a member of the strategic policy group at Baring Asset Management in London, which manages $55 billion.
The shares, first sold to investors for $19 each, fell $2.55 to 25 cents as of 4:05 p.m. today.
Gee, ya think, Toby? And Arthur...hindsight is a wonderful thing, isn’t it? Do you think Arthur will get a big bonus this year?
That’s a lot of money to just go *poof* or, as someone said yesterday, there’s a lot of money that’s now gone to money heaven.
Monday, 4:39 pm
So, I was in the car running some errands and turned on the radio. The very first thing to assault my ears was a special report on New York state’s governor, Eliot Spitzer who got caught being involved in a prostitution ring. As a customer, I understand.
Of course, he gave a brief statement saying he was terribly sorry and mentioned his family with whom he has some trust rebuilding to do. Etc.
That news just about crushed me. Eliot Spitzer! He’s been around for years with nary a stain to his sterling reputation. He’s especially known for his organized crime fighting and stunning successes. Everyone thought Eliot Spitzer was about the most honest and upright lawyer/politician in the world. For crying out loud.
I guess there just isn’t such a thing. I’m really upset about this. And I’m not fool enough to think he’s more sorry he did it than that he got caught. Because if he was really, really an upright sort of guy, he wouldn’t have done it. And, being what I thought was an intelligent politician, he’d have protected his sterling reputation by behaving himself. And maybe even protect his political party. Not to mention his family. But he didn’t care enough about any of that. He’s no better than all the rest. I’m really angry with him. And I don’t even live in New York state anymore.