Not much time left before the deadline, the country waits while its government plays this continuing game. The one party refuses to cooperate with the other, while the second party tolerates the tantrums of the first.
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Wall Street firms historically were the worst of the gamblers. We can now include the Big Banks in that group too. For example, Bank of America’s stock sank by about 40% over the last few months, but it has decided it loves its own sh– I mean, debt. BoA loves its own debt, and is thinking about watering down its stock to make more money so it can buy back its own debt. The said debt had gone through a lessening in value so it might be a bargain if they bought it back now. But why on earth would they want to? Because they’re Too Big To Fail?
The gambling banks really like to gamble. It’s a chance to stare death in the face, and a lot of them don’t seem to care if they win. They just want that encounter with death. There’s a poker player who comes to mind now: Eskimo Clark, a bracelet winner in the World Series of Poker some years back. He has been said to have had more than one stroke at the table, but refused to leave and give up his poker hand. A couple of years ago, the last WSOP I believe he competed in, he’d obviously had a medical emergency; he was falling out of his chair and had pissed himself. But he insisted he would continue playing. It seems he owed so much the only way he could pay it back was to end in the money somewhere in the event. Finally the tournament directors, or someone, called an ambulance and he was removed to a hospital.
A sickening story. When he first jumped into my thoughts, it was because of Bank of America’s doings. BoA was like the desperate poker player. But now maybe I think — we are Eskimo Clark. We have not yet removed ourselves from the table to get needed help. (No action from Congress, no Glass-Steagall reinstatement, no tax on financial transactions to cure the deficit, no jobs bill, no nothing.) What the hell are we doing here? Are we waiting to see what it would be like to die?
Now that Detroit has turned into Tom-All-Alone’s, and other Michigan cities are taking part in that Dickensian nightmare too, why don’t we just all sit back and read about Justin Bieber’s paternity suit and Kim Kardashian’s divorce?
For once, Wall Street stocks are beaming truth out to the rest of us. The stock market is falling, because it’s perfectly clear that the deal struck betwixt Obama and the two houses of Congress is a lousy one and will do us harm in the near future.
What is “balanced”? That’s how the president described the plan he extended to Boehner. But it was all negatives with no positives. I’d hate to see Obama try to jump-start a car.
And speaking of brinksmanship —
All governing is done on the edge, now.
It would be really nice to have a government that acted responsibly.
I just got another of those political emails that come to you after they find out you have opinions. This one, immediately after the signing of this atrocious debt ceiling fiasco, was asking me to pat Obama on the, uh, hand, I guess; they wanted a donation because he’d helped, supposedly, to force automakers to start making cars that can get 54.5 miles per gallon. (They will start making them, I think, several years from now.) I responded to the automail asking, How about you don’t bother us with this sh__t that should have happened a decade ago? Why didn’t the president invoke the Constitutional option and raise the debt ceiling without awarding the Republicans all these budget cuts that’ll hurt us later?
I shouldn’t write things like that — although I did receive a very polite autoreply thanking me. Because the car thing should have happened two decades ago.
So sick of Wall Street and its bonuses today, sick of Goldman Sachs (pig!)
, sick of AIG’s yacht-loving executive, and Ted Geithner and Larry Summers and Bernanke! Very sick of them. Instead, I’m thinking about social ism today. I avoided putting it in one word so you wouldn’t choke; I know how Americans don’t like saying or hearing the word. It’s as if you all lived during the 50s.
I’m thinking, not a full system of socialism but just some good practices which are generally or vaguely socialistic. So everyone can just relax.
To segue to a discussion of them, against my first instinct I will quote Ilargi of theAutomaticEarth. Ilargi, hidden man of the financial industry, is a doomsayer. He scares me, sometimes, with his proclamations: that living in the suburbs is a trap, that everyone should buy gold, that the world’s going to end, yadda and yadda. He is a smart guy but doesn’t seem to understand the American governing method of making things palatable for the public, of preserving appearances. Utter economic destruction is unpopular, so if only for that reason the government will do things to avoid a lot of it. It won’t do it well, but it’ll do it. Therefore his Armageddon world will not really arrive. Nevertheless I find important quotes in his writings that are worth remembering and are even of use buttressing oneself against despair. This, for example:
“…the stock market is not the real economy. And neither is it representative of that economy, in fact it’s probably less so now than at any point in the recent past. And it can turn in a second and on a dime.”
I’ve said before that stocks, which rise and fall influenced largely by reports (and rumors) from the issuing companies, are not a measure of the economy the ordinary person lives in. The megacorporations have changed their very accounting equation, faking their numbers, and their manipulation of their supposed assets and losses is being tolerated by the federal government.
If “the stock market is not the real economy” right now, we may have some power over our own economic futures after all. Obviously the financial sector is not who would read this blog, so you, sitting across the screen from me, are probably one of the middle class. That same middle class Elizabeth Warren says is caught in a vise. We — we are closer to the underpinnings of the economy than Wall Street is. We consist of the workers, the small businessmen, the professionals, and so on. If the stock market isn’t an accurate picture of anything in our lives, I wonder if we can’t start creating our own economy, distinct and separate.
It would take a lot of humanity and patience, and a lot of people. A lot of people acting cooperatively. Here are some actions we’d need to take:
1. Searching for new green industry — and more important, small greener practices — to invest in, buy, or start up. Small green spots are what I have in mind, really; individuals beginning in ones or twos to start buying a thing which is renewing… or renewable. Like using red worms and compost for your lawn instead of a chemical-based lawn service. Chemicals mean big corporation, usually; red worms mean small farmer. Go on from there, and go bigger, finding more green practices and industries.
2. Formation of tiny groups to support one another in other ways, especially when it comes to financial ventures. We need Kiva lending here! In colonial America, some religious and ethnic groups formed their own trade groups; groups which trusted their members if only because they were of the same faith or background. I used to hear, on the radio, ads for a Christian group that provided a sort of health insurance for each other just by paying one another’s medical bills. I’ve no idea how it worked out, and suspect it was a big scam but if it wasn’t it may also have tanked due to being unreasonable. However, it suggested the vast power there could be in joining a like-minded group. But today we see betrayal of that sort of grouping in the Bernie Madoffs, Ted Haggards, etc., etc. If we are subject to the social phenomenon known as the Big Sort, we can also change the way in which we sort ourselves. And it is not really a “sorting” if outsiders are welcome to join the contract. Example: food co-ops. You can buy here if you do some work here. And credit unions, that’s another example. We’ll give you a loan because you’ve kept your money here for a certain period of time, and you pay your bills on time too.
3. Patch Adams-types of solutions for health care. Greater equality among participants in every aspect of the health care system. (It is, actually, proper to call it a “system,” since it is a natural part of our lives.) The Gesundheit Institute and its friends have done mountains of work on this and other subjects.
4. Purchasing a real item of value instead of buying stock. De-sophisticating the economy. If the banks too big to fail are getting bigger; if the financial houses are again engaging in the same risky practices that brought down the economy; if the government is not regulating the banks and financial industry enough, then all stocks are a much, much bigger gamble than they appear. It’s enough to make you want to buy not just precious metals, but timberland acreage and other things that ordinary people actually need. Trucks, tools, building material, livestock, even large appliances for heating and cooling. Since most of these things can’t be squirreled away like savings, you’d have to use them, rent them out, or sell them. Each of which involves difficulty, but at least you have control over the process. Successfully sell or rent your assets, and you’ve become a business…
Small businesses may be the best things for the (real) economy. They tend to use extra money to buy new equipment and even new people: employees. They are the big consumers and the big job creators, not Wall Street and not the government. The smaller they are, the less likely they are to be speculating on Wall Street with their cash. Small is good.
While I’m climbing Dream Mountain, I imagine masses of people moving their money out of the stock market and putting it to work themselves. Not putting their faith in big corporations (which have acted without good faith). With the exodus of lots of investors, the stock market would shrink. Making the whole “economy” much more real, easier to participate in. Making it sturdier. Making it stronger.
Okay, I don’t have the background to analyze what the result would be to a growth-dependent economy, but the stock market lived and breathed for decades well below the frantic trading levels we see today. It could do so again.
No, I can’t replace people’s 401Ks and IRAs with anything yet, not quickly. Slow-growth investments like bonds can’t cut it yet, maybe, not by themselves. But if you do your own stock-picking for your financials, you should keep in mind what just happened in our economy and everyone seems to want to forget. The financial industry destroyed a great deal of what you’d been saving for years. They did it for themselves. And they are working themselves back to that position again, saying we need that old bonus system and huge executive compensation so they can keep the same sort of “creativity” on Wall Street. You know — “creative,” like financial derivatives are “creative” products. Oh, they’re creative all right. And magic too. They made millions of houses vanish.
No, that’s incorrect — the houses are still there. (Missing some copper wiring and pipes, though.) Their magic trick was to turn millions of homeowners into street people. Abra-Cadabra. Poof!
Rather than putting all your eggs in that same rotten basket you could set some aside, let them take their chance in the world and become chickens. Not all of us are good at raising chickens but you could try, and join a group of chicken-raisers or something. It’s a risk. It’s always a risk.
………….. Boy, I almost let that mention of Goldman Sachs (pig!)
in the first paragraph go without putting the word pig beside it.
Wall Street Bonuses! Did you get yours yet? No? You must not work on Wall Street, then! You don’t matter in this world!
Down to business.
I have to confess that I descended into the bowels of the earth yesterday, and visited the BileMaster. And I drank some of the brew he makes. It’s awful; tastes like quinine mixed with Gatorade. But you find you can’t stop drinking it, so I had a lot. **
Afterwards, your vision is tinged sort of greeny-yellow with red streaks running down it. Or maybe those red streaks are just the blood running into my eyes from the gash on my head. I don’t know how I got that. I don’t really remember what I did most of the evening.
Today, I find I hate everything. Filth surrounds us. And everyone is a crook, I think. I look around and I see crooks on every side. Crooks, crooks, crooks….
I’m really sorry; I don’t usually talk like this. It’ll take another day or so to get back to normal, so I’ll just get this off my chest and out of my system while I’m waiting to recover my usual sweet self and sunny outlook. So read this, you bastard!
Again — I’m sorry. Hard to control myself.
…..
The President says it was “instant gratification” that fueled the bust of the economy? Not precisely. Instant gratification is to blame for the proliferation of the microwave, Tivo, millions of TV channels, and lots of other stuff like that. The growth of the economy is not equal to the bust of the economy. And that’s what the “culture” of instant gratification helped along: the growth. Not the bust.
It was people doing things that they found they could get away with, because the general public didn’t know about it. It was hidden, greedy crime. That’s what started the bust. Then it was the mismanagement of all the financial institutions dealing with the outcome of that hidden greediness.
No one in the past seemed to consider the big lack of savings accounts on the part of the middle class “the economy” — so let’s not call it that now. Our savings never really figured into things, at least in the last half-century. Only our spending did.
“The economy” still doesn’t care about us. But it will when we’re older, or broke, and out on the street. Then we finally become part of “the economy” because we’re so very visible. Big, out on the streets, demanding answers. Just like Godzilla.
The Duplicitous Products
Back in the early 90s, I thought that America’s main product that the world needed, or at least wanted, was military force and weapons. (Both our army itself, and our weapons manufacturing.) It seemed that the world’s use of us was to make us the police officer of the globe. Or so it seemed to me for about five minutes.
Now, the U.S. supplies the world with things it didn’t really ask for. Except maybe the bankers and finance guys. They would have wanted these things.
What are our products? The credit default swap. Wall Street bonuses as a pay system. The bundled, insured, diced-up bunch of toxic loans. The practice of demanding from customers multitudes of hidden fees that no one thought of charging for, until lately. Duplicitous products of finance and business!
Did you know that fully HALF of the people who received loans from companies like Countrywide, who ended up with Adjustable Rate Mortgages and subprime loans, actually qualified for prime rate loans? That’s fifty percent. That is NOT the poor being enabled to buy houses. That’s regular borrowers duped into signing stuff they didn’t know they were signing. They were conned into putting their names down for ballooning mortgage payments.
This is as good, or better, than the scams of the eighties, when banks were scammed by fake borrowers who took out big loans to flip real estate and other stuff, and eventually just walked off with the money. Of course the fake borrowers were usually also people from banking, who knew how to work the banking system.
This is as good as Enron. As good as manipulating the energy market of the largest state in the nation. As great as Wall Street bonuses. As good as the Bush election in 2000.
…
If you don’t own a bunch of stock, WHY on earth do you worry how the stock market does? (And why are the news media trying to make it so important?) That’s like taking the temperature of your neighbor down the block to see if YOU have a fever or not.
WHY is the credit default swap still a legal transaction? Or is Wall Street simply a bookie operation? Is AIG one?
WHY hasn’t shorting stock been severely restricted already?
I suspect everything and everyone in business now. That’s what the stream of revelations of the machinations of the financial corporations has done to me. For instance, I turn on the TV, there’s this American Idol show running over its time into the next hour. I wonder why — because that never happens. TV ad time is so expensive.
It was planned, I think. A little gimmick that made some sneaky people money in a new way. In the ten minutes of that show overlap, sensation/surprise Adam Lambert sang so prettily. He was:
1) Seen by a whole lot of people who never ordinarily watch American Idol. These accidental viewers were waiting for the show Fringe, which has a very different audience.
2) Missed by the regular viewers of Idol who DVR’d the episode, who probably set their recording devices to correspond with the normal time of the show. They missed the overrun of 10 minutes.
3) Yanked off Youtube.com, which in the first few hours afterwards, showed that video of the last 10 minutes. Now it does not, and people are rabidly searching for it. (He was that interesting, yes.)
4) Sold hugely on iTunes. That 10-minute performance from TV (trimmed down) is now for sale there. The planners managed to keep it exclusive by making it run past its time.
Just an interesting little experiment that was probably very successful.
But the bigger arena of business artistry is elsewhere: the fees that credit card companies, banks, cell phone companies, and other companies have found they could charge us. More examples of American creativity!
It’s hard to list all those newfangled fees that have cropped up in the last year or two. We’ll post a short list of some examples soon. And you’ll soon be noticing those and zillions more, every time you open your eyes. Or your mail.
**The BileMaster evidently sold a batch of his brew to Kenya once. http://news.bbc.co.uk/2/hi/africa/1025120.stm And Alan Turing (father of the Turing Machine) may have eaten an apple dipped in it. It’s bad stuff.