The Fix Is In – Part Two

it's always xmas on wall street

Today, a distinguished board of economists said the country had been in a recession since December ’07, a statement that normally the markets would have discounted, because, yeah, like we knew that. But no, the market’s took a massive swoon, again, giving back all the hard earned gains of the past week’s rally.

Call it rank cynicism, but it just can’t be helped. It’s just too tempting a thought not to consider all this just a tad convenient. Last week the long guys had a party to celebrate a completely predictable new Secretary of the Treasury. This week the toilet beckons because we were told what we already know, and the short guys make a bomb. Coincidence? Perhaps. But if there was collusion between the traders, who after all work either a drink after work or a few desks apart, one could hardly be surprised. After all they’re just trying to make a buck or two with someone else’s money. Right?

Treasury Runs Out Of Money To Give Away. Fed Rides In

paulson + bernanke

This is getting silly. Two days ago, Toxic assets were out. Then Treasury bailed out Citigroup’s…toxic assets. And now the Fed (they’re the ones who actually print all those T-bills) have taken over and pledged $800 billion to bail out all toxic securities built on consumer credit card debt. In one fell swoop that’s a bigger bailout than the one we haggled over during the campaign.

Crass incompetence is kind of quaint when we can chuckle about it in other parts of the world, but when it’s taking place here at home and hitting you hard in your pocketbook it’s not quite so funny. It only goes to show, you can only really judge the quality of government during a time of crisis.

By the time Obama rides in, we’ll be lucky to have an economy left at all.

The Fix is In – The Long and the Short Of Wall Street

Another bumper day on the Street. The Government bails out another basket case bank. Everything’s right with the world. Hurrah! Yet again, Wall Street proves it’s an utterly amoral, self-interested, club that has nothing whatsoever to do with you and me.

panic on wall street. or not.

Massive market volatility, huge gains on the basis of nothing, followed by huge losses and back to gains. Is there a pattern to all this? Not on the surface, at least. The press loves reasons, and tacks on some or other reason for that day’s movements. Recession indicators, new appointment at Treasury, another baby for Angelina and Brad.

But maybe something else is in play too, something mysterious, something very, very fishy.

Traders either go “long” hoping a stock will rise, or they go “short” on borrowed stock hoping the stock will drop and they get to keep the difference on the sale. Long traders and short traders are not in competition, but supposing they were, even in some unspoken way, in collusion. Wall Street traders aren’t known for their mild-mannered approach to business, so could be…

The Cannibalism Of Capitalism

feed me

There’s something diabolical about a creature that consumes itself. It seems so profoundly irrational, so utterly insane. We file stuff like that in some ‘unspeakable’ part of our minds.

Except that we live it every single day.

Capitalism is a great system in many ways, but it has a tendency to destroy itself if left unchecked. We’re seeing that all too clearly right now. There are two areas where capitalism is profoundly cannibalistic.

Let’s Talk About “The System”

hi, i'm the system

Back in the eighties there was an awful lot of talk about the nefarious “system”, a deep and dark conspiracy of the powerful to keep down the powerless. Before resentment became a tool of the right, it was a clarion call of the unreconstructed left, a youthful, incoherent, but somehow meaningful rallying cry that drove many a drunken, sophomoric conversation. You don’t hear too much about “The System” these days. Nobody seemed to care anymore, when “The System” was delivering them flat screen TVs and great opportunities to flip condos.

But it seems to me that it’s time to revive talk about “The System” because it’s become very clear what it is.

Undiluted socialism for the rich and influential, and the legal and enforcement system to protect it.

When Will Hank Paulson Be Done Wrecking The Country?

He’s got less than two months to do it, but it’s possible that by the time Obama gets into the hot seat, America may be in a very nasty depression. Take Hank’s words of wisdom for example on NPR.

November 13th.

Nobody is asking themselves anymore is there some major institution that might fail…

November 23rd

Ten days later and Citigroup’s stock is trading at well below the level where many institutional investors have to sell. Citigroup and the Government meet over the weekend to create a “bad bank” backed by the Government to park all Citigroup’s ‘toxic’ junk, so the bank can rebuild at taxpayer expense

Please, Hank, just go away.