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Fullblown Panic ^ | January 21, 2008 | James H. Kunstler

Posted on 01/21/2008 7:12:51 PM PST by B-Chan


Knees knocked last week from sea to shining sea as the shape-shifting monster of economic reality cut a swathe of destruction through the markets and financial ranks. The exact nature of this giant beast still remained largely concealed in a fog of accounting gambits, policy blusters, and reporting dodges, but a few intrepid scouts who glimpsed the behemoth up close said it looked like Godzilla with Herbert Hoover's face.

George W. Bush tried to appease the beast by offering each American adult the dollar equivalent of half a month's mortgage payment -- with the exhortation to drive forthwith to the nearest WalMart and blow it on salad shooters and plasma TV's -- but Hooverzilla just laughed at the offering and pounded the equity markets further into the dust of loss, while the "bank-like" guardians of wealth lay in the drainage ditches bleeding from their ears and eyes.

My favorite moment was seeing Treasury Secretary Paulson and one of his fellow shaved-head deputies at a press conference rostrum frantically trying to calm the news media rabble like a couple of extraplanetary high priests from a Star Trek episode -- the batteries having run down in their laser wands, and their incantations ("liquidity! liquidity!) veering into mystifying glossolalia.

I resort to such admitted extreme hyperbole because it may be the only language that an infotainment-drunk society can still process in the face of an epochal calamity that will transform the lush terms of everyday life as we've known it into something like a bleak surrealist landscape in the manner of Tanguy. That crashing sound out there is the armature of confidence needed to support an economy based on faith that borrowed money will be paid back. It's as simple as that. (Doesn't seem so exciting now, does it?)

The United States is so broke, its people at every level from the Federal Reserve on down don't know whether to shit or go blind. The homeowners cringing in the media rooms of their 5000-square-foot personal family resorts don't know how long they can stay put microwaving pepperoni hot pockets with the default clock ticking. The mortgage "servicers" don't know how they will persuade interested parties like, say, the Illinois State Cafeteria Workers' Pension Fund (holder of X-amount of mortgage-backed securities underwritten by, say, Merrill Lynch or Deutsche Bank) to foreclose on properties scattered everywhere from Key West to Bainbridge Island -- or if there is actually any legal mechanism known to man that would make it possible to "work out" the sliced-and-diced collateral. The millions of maxed-out credit card holders and the issuers of their plastic are stuck together paddling a leaky tub in a sea of troubles every bit as wide, deep, and polluted as the one the mortgage junkies and their enablers are sinking in. The developers of malls, office parks, and power centers are weeping into their filing cabinets as the harsh daylight of insolvency stops the orgy of "consumption" and the retail tenants pack up their unsellable goodies for the liquidators, and the rent checks stop arriving in the mail, and the notes on this mall and that mall enter the eerie realm of "non-performance." And, of course, there are the genius wonder boyz and Wall Street playerz whose algorithms and turpitudes underwrote the script of this horror show -- for all I know they'll end up laughing into sugary skull drinks on a beach in the Cayman Islands, or doing Chinese fire drills in federal prison (or simply ass-fucked on the granite countertops of their Tribecca aeries by mobs of angry, repossessed, swindled former American dreamers pouring into Manhattan from the tract house dormitories of New Jersey and Long Island).

There's a lot to be concerned about out there. I don't mean to be too cute about it. But, as the master once said, nothing is funnier than unhappiness.

A whole closet full of "other shoes" is now waiting to be dropped. Surely the biggest clodhoppers in the closet belong to the hedge funds, representing trillions and trillions of dollar-denominated "positions" which, however hallucinatory, had previously yielded enough real "money" year-by-year to keep all the realtors and Humvee dealers in the Hamptons goose-stepping to Goldman Sachs's drumbeat. These "positions" can't help now from moving into counterparty crisis territory, especially as the bond insurers such as MBIA and Ambac go up in a vapor, and if that happens the damage could be so colossal globally that Stephen Hawking might have to be brought in to run the Federal Reserve.

This is going to be a rough week. Fastening your seat belts may not be enough for this ride. Better superglue yourselves to the floorboards and pray for God's mercy.

TOPICS: Business/Economy; Crime/Corruption; Government; News/Current Events
KEYWORDS: economy; fed; finance; fraud; markets; mortgage; paulson
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The Panic of '08

NOTE: All posts by B-chan are intended for entertainment purposes only. Opinions expressed in cited links are not necessarily those of B-chan.

1 posted on 01/21/2008 7:12:53 PM PST by B-Chan
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To: B-Chan
The United States is so broke, its people at every level from the Federal Reserve on down don't know whether to shit or go blind.>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

B-Chan, you are MY kind of writer. I suspect you are Canadian, as I am, with the blind expression.

Now I will call you B-samma, instead of B-chan.

But I agree with your thesis.America has nothing to fear but fear itself.

And we have the MSM, the Dems, and every liberal's dog howling in the night that we are all gonna recede.

2 posted on 01/21/2008 7:19:48 PM PST by Candor7 (Fascism? All it takes is for good men to say nothing.)
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To: B-Chan
Well, that was entertaining in a Dr. Strangelove sort of way.

I believe the American (and for that matter, global) economy is stronger that the panic-seekers in the press would have us believe. Remember, making people think the economy is bad is very good in an election year. If you're a Democrat.

3 posted on 01/21/2008 7:20:26 PM PST by TonyInOhio (It is hot in Suez. The dice are on the table.)
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To: B-Chan

Typical hyperbolic B.S. coming from the dweebs of Wall Street, the limp-wristed pasty-faced quants who love to use testosterone-laden language so they can pretend that their paper games are manly.

They know they can’t drive a nail, much less drive a truck.

4 posted on 01/21/2008 7:20:40 PM PST by Redbob (WWJBD: "What would Jack Bauer do?")
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To: Candor7

Thanks, but I can’t take credit for this one. The article was written by James H. Kunstler.

5 posted on 01/21/2008 7:22:34 PM PST by B-Chan (Catholic. Monarchist. Texan. Any questions?)
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To: B-Chan
And once Hillary is elected the economy miraculously makes a change for the better and we will live happily ever after, according to the MSM.
6 posted on 01/21/2008 7:31:30 PM PST by kempo (I)
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To: B-Chan

Sleaze bags handing out government guaranteed mortgages to non working (underemployed?) people is no recipe for economic growth.

On the other hand, a military action that will stabilize oil producing countries ultimately might put a lid on energy costs.


We shall see what happens.

7 posted on 01/21/2008 7:32:27 PM PST by Radix (If your outgo exceeds your income, your upkeep will be your downfall.)
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To: B-Chan

The stooge writer is dutifully substituting what he’s been told must replace the democrat war disaster mantra, since the war went ahead and got fixed by the hard work and blood of real patriots. The democrats must have a major diversion, immediately! Heave the ‘journalists’ to create econominc panic as easily as they created economic paradise for the clintons / democrats to bask in.

8 posted on 01/21/2008 7:39:47 PM PST by MHGinTN (Believing they cannot be deceived, they cannot be convinced when they are deceived.)
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To: B-Chan

Let me guess. Buy gold?

9 posted on 01/21/2008 7:41:37 PM PST by Nachoman (My guns and my ammo, they comfort me.)
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To: B-Chan
Well then, you're my kind of reader. The writing is excellent. Updated to the 21st Century,Benjamin Franklin could not have done better.

Kunstler is a pamphleteer at heart.

10 posted on 01/21/2008 7:43:27 PM PST by Candor7 (Fascism? All it takes is for good men to say nothing.)
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To: Candor7

Actually the Democrats have proposed to save the economy by pumping money into ‘green collar’ jobs. Just on tonite’s debate, Her Thighness Hillary II proposed hiring ‘hundreds’ of young people to install these new fangled solar panels, thus saving us from global warming, and rescuing the economy. Why should ‘We The People; be frightened when we have leadership like that waiting in the wings?

11 posted on 01/21/2008 7:43:31 PM PST by milwguy (........)
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To: B-Chan; Petronski; Toddsterpatriot

I hate humor I have to think about.

Oh, well, when in trouble or in doubt, run in circles scream and shout!

We’re doombed!


12 posted on 01/21/2008 7:44:28 PM PST by Larry Lucido (Thompson/Hunter 2008)
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To: TonyInOhio
To reduce this GENUINE crisis to a partisan political jab simply shows your ignorance.

The very foundations of the financial infrastructure are under great stress and there is legitimate concern it may not hold.

Trust has been broken. Credit is no longer considered an asset.

Every balance sheet in the world is under revision...and it's NOT PRETTY.

13 posted on 01/21/2008 7:46:25 PM PST by Mariner
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To: Radix

HOw about drilling on our own land where we KNOW billions of BBL’s in proven reserves lie? ANWR, the Beaufirt and Chuchki Sea, off the coast of California, and in large parts of the Gulf which are presetnly off limits. Also, how about actually building neuclear plants, a technology we invented and is now being developed on a massive scale overseas, mostly supplied by our buddies the French and Japanese. On that note, how about investing in ‘clean coal’ since we have 1000 yeears+ supply of coal? Our coal business is prospering right now in part because EXPORTS have reached a record level, all due to our enviornmentally concious European friends buying it from us and burning it because it is their cheapest source of energy. The whole economic picture is bleak in large part because of enviromentalists and the Democrats and spineless Republicans who didn’t realize sending our wealth overseas to fuel our cars would eventually bankrupt our nation.

14 posted on 01/21/2008 7:49:06 PM PST by milwguy (........)
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To: milwguy

Let’s call it the MLK melt down.

15 posted on 01/21/2008 8:22:57 PM PST by Oldexpat
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To: Mariner

Oh well, I lived through the Hoover Depression, I guess I can live through another one. Not to worry. Hard times build character.

16 posted on 01/21/2008 8:23:03 PM PST by WVNan
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To: Nachoman
"Let me guess. Buy gold?"

And vote Ron Paul.

17 posted on 01/21/2008 8:25:09 PM PST by Justa (Politically Correct is morally wrong.)
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To: Mariner

Easy does it. The machine is still intact and will remain intact.

18 posted on 01/21/2008 8:26:25 PM PST by durasell (!)
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Bushbot to the end, I love it. Seriously have you been reading anything about the economy or the world markets in the past year or two?

19 posted on 01/21/2008 8:35:54 PM PST by Eyes Unclouded (We won't ever free our guns but be sure we'll let them triggers go....)
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To: Mariner
To reduce this GENUINE crisis to a partisan political jab simply shows your ignorance

I have to agree with your observation there Mariner. There are too many here on the board that can not see the forest for the trees. Everything is a democrat/CLinton plot according the Mantra.

Sometimes things are what they are. There is a very real danger of the entire world global financial structure unwinding. As to the reasons why and who exactly is to blame can be sorted out by the book writers in the coming years.

We are on the verge of this generation's '29. Maybe it is happening, maybe it isn't. The extent won;t be known for a while yet. But to attribute the declining Asian Markets to some sort of Clintonian Master plot is laughable.

The prospect of a second Clinton presidency is not something I look forward to seeing. But come on folks, some of you are attributing more powers to the Clintons to affect things than the demo dweebs believe Rove can do...

Get used to living on 10K or less a year...

The global markets had hoped that they could decouple from the problems of the US markets, but that is not the case. That coupling and unwinding is what has to be of concern. The repetitive mantra of Clinton and MSM responsible for a breaking of the faith in the fiat money does not make it so...

20 posted on 01/21/2008 8:38:34 PM PST by abigkahuna (Step on up folks and see the "Strange Thing" only a thin dollar, babies free)
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