Friday, May 2, 2008

This is nuts. . .

Reading the financial news daily, mostly I read the macro finance stuff off of Bloomberg or Mish's link at the bottom of the page. Jesus. . .if you were going to diagnose the "mood of the markets" at this point you could only say that you were dealing with a undedicated manic/depressive paranoid schizophrenic with multiple personality disorder.

The Fed and the Treasury want to "restore investor confidence." You do, eh? Right.

If there is anything that wholly destroys investor confidence it is fucking around with financial policy. Once you start bailing out banks(bear sterns) that simply screwed up and should by rights fold at whatever cost, when congress starts talking about linking foreclosures with jail time, and all sorts of fiddling with the economy--while you screw with and devalue a nation's currency--you create an environment of utter uncertainty in which any informed investor will simply sit on the sidelines. Or invest in whiskey and ammunition. Uncertainty is not risk. Risk involves a calculated chance: with uncertainty you have no means of judging what's coming at you. And any prudent investor or businessman never takes chances with uncertainty. This alone will have a profound impact on the economy as a whole.

For those of us who have lived very prudent financial lives, we especially are very pissed off. Those of us who didn't speculatively borrow during the housing boom, as it was fucking obviously unsustainable, or elsewise, and didn't get ourselves in a hole, thinking perhaps we'll buy in when the bubble bust, as it did, will now look at a situation in which government policy is only interested in protecting bad speculative behavior and devaluing the cash some of us have saved. That isn't funny in the slightest, and it will take a while for most of us to forget it.

The policy is clear. Protect the kleptocratic banking system, and devalue the dollar to shed the vast amount of unrecoverable debt that the US now holds. Those with a lot of money will hide their assets in Dubai and the rest of us can all go to hell. 5 years down the road these guys will come back, and buy up the remaining country for pennies on the dollar.


Mike said...

All true of course, but no different than at any other time in history. Robber barons, royalty, multi-national corporations - all different snakes on Medusa's head. Those with the capital, organization, and weapons take as they please and the working man(woman) gets the left-overs. Best to learn to like the taste of rodents and insects, as the chances that anyone will get off their couch and do anything about it is pretty remote.

dskaugrud said...

Republican economic policy institutionalized and codified-

Here is what gets me about "CONSERVATIVE REPUBLICAN FINANCIAL PHILOSOPHY". It is really quite a simple concept, a concept not original to my poor and feeble brain...


The Bushies where extremely successful at doing this. What a bunch of assholes!