Topic: Economics
So You Thought Spitzer was Immoral? Eliot Spitzer was a Cub Scout and Kristen was a Den Mother if your Comparison is the United States Government and the Bankers it Sucklesby Random Outlier
(libertarian)
Friday, March 14, 2008
You train the mule with gentleness and understanding after you get his attention.
Your attention has this day been commanded -- diverted from luscious Kristen -- with a cast-iron two by four, and the Mayflower romp has become, comparatively, serious as a parking ticket. But it does direct our attention to the dull subject of economics.
Eliot's lust was satisfied in a tryst with a dandy body, freely available for his purpose, the libertarian imperatives of consent and free market having been complied with, subject, however, to a certain criticism for being uneconomical.
Uneconomical? Good Lord, folks, you've seen that snapshot of the bikinied vixen who hefts out at maybe 110 pounds at best. Do the math. At $4,300 a crack, that comes to thirty-nine bucks per pound. Per hour. No wonder New York is broke.
But would that you and I could survive this day that cheap as we prepare to take what Kristen took on Valentine's Eve.
The bare sterns of Eliot and Kristen pale alongside our Bear Stearns. Bend over anyway. You have no choice. Ve haff ways of making you bend.
----
Perhaps we thought, wrongly, that the last interesting word has already been said on that laffer called the "housing crisis," which it isn't. It's a brain crisis.
Your goofy brother-in-law makes thirty-five grand a year sweeping out a body shop in East L.A. He got the loan for a cute little Malibu mansion. You wondered about it, and him, and the ninny bankers who said sure, Bro, enjoy your new travertine spa.
A year later the inevitable happened. Even a U.S. Senator could have foretold it, though she of course wouldn't. Your relative missed a few payments. Since you love your sister she's living in your spare room. So is he, and the three spoiled brats.
Because he also is in some disagreement with Visa, Mastercard, and the nearby payday loan office, his Pop Tarts and frozen burritos are on you.
Tough enough, but you're not done forking over.
Your brother-in-law wasn't famous enough to get headlines. He wasn't big enough to get Obama's attention. Or Bernanke's. Just one more moron taken in by a guy brokering mortgages in lieu of finishing high school.
He is one individual problem, insignificant except as a challenge to your personal frustration threshold or propensity to homicide.
But the contagion spread, fanned by the hot and seductive breath of the electric television ads by cuddly mortgage bankers, dangling money by the ream before the viewers panting with house lust.
Buy the home of your dreams now! No down, interest-only. Your income is what you say it is; it would be unfriendly to call the body shop and verify you really do take home a cool eight thou a month.
Give that kind of ad campaign a couple of years and you produce what seems like half a nation living in relatives' spare rooms and their vacant dream homes rotting away, going begging priced at half their 2003 prices.
---
The bankers own most of them now, and even that breed eventually figured out that they're not going to get paid.
Good thing the little country banks sold all those Mother Goose mortgages to the big boys -- like Bear Sterns -- who in turn wrapped them up into pretty stock certificates (CDOs, CMOs and whatever else Madison Avenue could dream up as a substitute for the vulgar word rhyming with twit) and sold them in a market more gullible than any since the internet bubble.
Even the Wall Street giants got in trouble, some for selling white elephants, others for buying them with borrowed money. Everybody owes billions to everybody, and nobody can raise enough actual cash to meet the price of an '87 Saturn.
As luck would have it, the masters of our financial universe have better flacks and D.C. lobbyists than your brother-in-law.
Enter Ben Bernanke, crowned head of the Mother of All Banks, the mighty Fed. He's panicked, but still his old generous self. Not to you, of course, nor your brother-in-law in his BVDs, watching MTV on your set and drinking your beer.
His benevolence is directed toward, you guessed it, the banks who made the loans and especially the even bigger banks who bought the mortgages with borrowed money.
Not to mention his largesse is financed by and courtesy of, and I mean this exactly, you.
He's spending your paycheck, your bonus, and most tragic of all, the value of that little retirement account you're painfully building against your senior years.
---
The swishing sound of the that attention-getting two-by-four on its way to your noggin could have been heard months ago when the federal government, operating through the federal reserve system, began whispering softly that the sins of the irrational borrowers and lenders must be atoned for by sane Americans -- those who borrowed and lent only that which could be expected to be repaid.
The whish of the swinging club is over, and we have taken it on the bridge of the nose as of now. Smack.
This morning, Washington and New York announced that Bear Stearns, as the nation's fifth largest investment bank, was just too big to let fail. Never mind it had demonstrated corporate competence about sufficient to manage an enterprise consisting of two guys with brooms.
A Bear Stearns peer is J.P. Morgan bank, and good ol' J.P. said to B.S., "We gone hep you, Boy."
Sadly, the helpful Morgan boys didn't have much cash either. Happily they have a good buddy in Ben whose realm includes the printing presses of the United States Bureau of Printing and Engraving.
"Why shore," Ben says to J.P. "We kin run 'em a little faster so's y'all kin hep out those good ol' boys at Bear."
(No. I can't think of a good reason why it's that complicated, why Ben can't suckle Bear directly.)
But Ben is pretty savvy, even holds a Ph.D. in economics, so he knows he'd better get some collateral as security for your money which will be tendered to J.P. Morgan which will hand it to to Bear Stearns which will permit B.S. to pay some of its bills and survive to lend another day.
So J.P says to Chairman Ben, "Collateral? You bet. Here it is."
And he hands over your brother-in-law's mortgage papers.
-----
If you've ever wondered why the United States Dollar is the world's laughing stock and the despair of those of us who must depend on it, that little drama is part of the reason. That kind of thinking is most of the reason.
If you wonder what, in concrete terms, it might mean to you personally, try this.
You have 20 years until your golden retirement. You work. You save. Your potential social security benefits keep rising, right along with the Consumer Price Index. Your stocks do well and you amass a couple of million which you convert to solid fixed-income securities.
Best of all, by amazing mid-life luck you meet the most charming and attractive thing, trim, brunette, beautiful yet in her black bikini -- and ambitious enough to continue her profession part time as you journey hand-in-hand through life.
At age 65 your wealth converted to hundred dollar bills would fill a Yankee Stadium. And not far into retirement you gaze into her eyes over breakfast.
"Kristen, Darling, a little more Meow Mix please?"
"Just a bit, Sweetheart. It's gone up to $39 a pound."
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You know... what is up with these women who stand by jerks like this? First her husband violates her trust and their vows. Then she receives the ultimate humiliation by standing by him on national TV.
I'd like to see her pull out a baseball bat, take care of his little itch, kick him out of the house, and then sue his ass.
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