Wednesday, September 24, 2008

An Unquiet Mind

For the past few days I have been reading. And reading. And reading. And reading. And reading some more. Reading this one really helped me understand derivatives.

I have also been watching all of the gawd awful hearings and conferences and CNBC by the hour.

Here's where it's gotten me: I am angry beyond lipstick on a pig at what those greedy motherfuckers in the top wealth tiers have done to the rest of us with their giant incestuous ponzai scheme. I am so angry that I find myself questioning this bailout... willing to consider personal losses just to ensure the bastards don't walk away with their wealth intact. And then I wonder if I should stop behaving like a petulant child and do the grown up thing and swallow the bitter $700B medicine.

And then I get angry again.

I am angry that we were told repeatedly that the fundamentals of the economy are strong by those who were making money in it, while the concerns of the rest of who looked at facts around us and knew something wasn't adding up were dismissed. Those of us who knew that it was impossible to survive as a nation of bankers. Those of us who questioned how a nation that doesn't produce can survive. Those of us who now know those bankers weren't even making money on actual assets... they were betting each other on the value of assets they didn't even own.

Then I get even angrier when I hear this meltdown misrepresented as a Freddie/Fannie issue, or even a sub-prime issue, by those who would try to distill it down to a political sound byte . This is not the time to pander to the most ignorant among us. It's time to let the American people know what's really going on. In fact, I'd say it's political malfeasance not to tell them. F&F were as dysfunctional as any of those book cooking, de-reg'd securities players but they don't bear the sole responsibility for this mess. We could have weathered their failure, had it been an isolated incident, with some pain, and not many would have mourned the loss as their carcasses were picked clean by their competitors. We could have weathered the housing bubble breaking and the resultant recession. No, the dire situation that spawned secret, urgent, government meetings after AIG tottered on the brink is coming from a different place. This isn't about a few bad companies. The Credit Default Swap market scheme (derivatives... aka making huge amounts of money from nothing) has always been a grenade waiting to explode. The housing bust was just the pin.

I'm not sure I could cast another vote for another politician if they agree to a $700 bailout without having been given the following info:
  • What did Paulson say in the emergency Thursday night meeting and why is it top secret? Why isn't the public entitled to know what's at risk?? If this situation is so dire, so horrible, why wouldn't they want to share it with a skeptical public in order to gain their support? Who could possibly believe they should ask the American people for that much money without all of the facts on the table? Haven't we endured enough secrets from this administration?
  • And speaking of this administration, why was the White House supposedly holding this information to themselves for months before springing it on congress and expecting them to respond in one day?
  • Who are we bailing out... which companies are benefiting from this money? I want to know exactly who is getting the cash and exactly how much.
  • How do we know $700 billion is enough? The amount of money tied up in the CDS market is greater than the entire global economy. We could go through $700 billion at the speed of light and end up in exactly the same place a week from now. We're trying to transfuse the patient with a bag of blood but nobody knows how much blood she needs or where she's hemorrhaging.
  • Why are we looking at paying anything more than current value? Why would anyone pay for this giant shit pile at anything other than current value? There's a reason the market value is low... because that's what it's worth on the market!!
  • And speaking of markets, do people understand that the stock market is still overvalued? That housing is still overvalued? Do people understand that all of the "gains" we enjoyed in the last decade aren't real? Why would we try to prop up the value of assets in these markets when we know it's not real? Let the prices fall to their actual value, suck up the fact that the gains we thought we were realizing on our 401Ks were inflated, and let's try to rebuild our economy on the good old fashioned economic principles that create real value instead of only creating wealth for those who know how to scam it.

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