Start worring when the crow lands on your desk
Posted on 01/21/2008 7:12:51 PM PST by B-Chan
[CAUTION: CONTAINS VULGAR LANGUAGE]
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.
Some $40 billion or more entered U.S. money market accounts last month. I believe that set a record. It appears that folks are parking their money to see how this shakes out.
Well, at least Wall Streeters got their bonuses this year before all the hoopla.
Half a point cut will mean nothing, as well as the much bandied about three quarters cut. Last week ben should have announced a full point cut. Tomorrow will be seen as too late and a desperate move to forestall panic. Its done, the die has been cast and tomorrow the curtain will open on the next act of this grand play.
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.
BumPing (thanks for the ping, jed).
I’m no economist, but, in my opinion, a prime rate cut by the Fed isn’t going to help matters. Dumping liquidity into the market will only throw gasoline on the already-smoldering inflationary fire.
That may well be, but in my world, the bally is the all important form of communication to gather the tip. "Here, Here" would be used to gather the tip, just like "Right Here, Right Now.' Now the key B-Chan, is to turn that tip and then clear the midway.
Just a bit of bally that I use might be: "Here, Here, Folks, step right in, This is it, the Strange Thing, the strangest thing you will ever see. Here now, and on a national tour, See the Strange THing. ...It will create a mental image you will never forget--see the strange thing right here, right now..
“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.”
Your whole comment was extremely well put. Nice analysis.
your kidding right......there’s nothing to do except plant a garden and eat squirrel.
Total agreement.
The people who try to spin this as some sort of ploy to get her Thighness elected don’t have a clue.
The people and corporations and financial monoliths that are in trouble here can and often do buy and sell politicians by the truckload.
Couldn’t resist...
We can’t have a depression like 29. See, these days we have prozac...
The market needs anti depressants right now. India is down over 10% within minutes of the open, and they put a trading halt on the market for one hour. Interesting to see when the halt is lifted how bad it gets.
I wonder if our correction here, isn’t also about busting some of these hyper inflated emerging markets. Our market has been living on our own money for many years, while foreign markets have thrived on foreign capital, that is now making a mad dash for the exits.
I agree. Usually I see the more pollyannish economists talking about a short economic set-back, but confidence is such an integral part of a recovery that you wonder if they are just playing their role, as written by the moneyed intersts that employ them. So it is nice to see something that could be a more accurate description of current events, and my oh my, A+ for style.
It will level off at 10,500
I’d like to see how it shakes out. Right now there’s a lot of moving parts. I think tomorow may be interesting, but not in a spectacular kind of way. Economics isn’t a Jerry Bruckheimer movie — it’s more of a soap opera.
Eat squirrels? Too small, raccoons are bigger, bout as much meet as a turkey and all you need is a 22 and a decent dog to do all the dirty work. The fur will keep you warm and cozy, would take at least 200 squirrels to make a coat.
Raccoon, you might be depressed, lost all your money, but you’ll be well fed and warm during the winter!
Start worring when the crow lands on your desk
“Stephen Hawking might have to be brought in to run the Federal Reserve.”
Serious topic...but that was hilarious! :)
Am I alone in this or did Pottersville look like a helluva lot more fun?
“HOw about drilling on our own land where we KNOW billions of BBL’s in proven reserves lie?”
that would be too easy.....
drama is more interesting...
...everyone is into reality TV... happiness is not as entertaining as total humiliation....
... sad ... what we have bought into and become.
When bank rates are 2%, mortgages are 4% we’ll build ourselves a new fangled bubble. Trust me, nobody wants a 2% cd, and there is enough cash to make the last bull mkt look like nothing. Much of these writedowns is mark to mkt, and that means they can go up big, just like they went down big. Playing against the world, usually isn’t very profitable...
In the last 60 yrs, the sp500 has violated the 400 day mva 13 times, with only 3 of those being actually signals to sell. The other ten, were actually buying opportunities. If you don’t believe me, look for yourself.
The world might end (now), but I doubt it. Tuesday sure going to feel like it though!
Leni
very!
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