International Writers Magazine:
As the consequences
of the sub-prime mortgage disaster continue to concentrically spread from
the center like an oil stain on a white dress shirt, central bankers are
vainly trying to contain the damage like a Federal Reserve Chairman with
a bottle of stain remover five minutes before his big speech. Good luck,
Island Cyclone roller coaster ride may be closed for the season
but dont worry, your bank account is getting ready for the
ride of its life. As
the consequences of the sub-prime mortgage disaster continue to
concentrically spread from the center like an oil stain on a white
dress shirt, central bankers are vainly trying to contain the damage
like a Federal Reserve Chairman with a bottle of stain remover five
minutes before his big speech.
Good luck, chump!
Meantime, all these geniuses are passing the blame for this disaster onto
each other like a hot potato. Not since the execution of Mary Queen of
Scots in 1587 have so many big shots been out of the room. In his new
book, subtitled Dont Blame Me, former Fed Chairman
Alan Greenspan blames the Bush administration for its loose-booty fiscal
policies. The Bushies are pointing the finger back at Greenspan, as though
he were the one responsible for the tax cuts and the hundreds of billions
wasted on the Iraq war. The British Chancellor of the Exchequer, Alastair
Darling blames the American retail mortgage lenders for selling mortgages
to unqualified buyers. As though the financial geniuses in the City of
London dont have the brains to do due diligence on the securities
This sub-prime mortgage disaster seems to be shaping up as an Anglo-Saxon
phenomenon because most of the idiot bond traders were able to buy and
sell the worthless securities speaking the English language. A lot of
very rich markets werent even touched by it, and now that wealth
is more evenly spread around the world many emerging markets may be able
to rise in importance relative to the English countries and a few hitchhiking
suckers, notably the French, who went along for the ride.
Now that the western central banks have declared that they will accept
the worthless bonds as security for extending loans to banks so that they
dont default, the western governments have effectively become buyers
of last resort for the investment banks to dump their worthless investments.
Until the money runs out
And the bankers know plenty that we dont know, thats for sure.
Thats why they are whistling in the wind and pretending everythings
peachy, while secretly their knees are knocking.
Want to buy a home or a luxury Duisenberg touring car? Just wait til
next year when youll be able to pick one up for a song if
you still have two nickels to rub together. Of course, those nickels wont
be worth shit anyway. The European currency is currently at $1.42 American
and predicted to go as high as $1.48 by the beginning of 2008, while the
dollar is at its historic all-time low. Europeans are discussing a rate
cut because French president Sarkozy is bitterly complaining that French
exports to North America are taking a beating, though the Germans, who
have a more diversified export market for their machinery, are not yet
feeling any pain at all to speak of. The ECB prime lending rate is already
relatively low, at 4.00% compared to the American rate of 4.75%, which
shows how strong the fundamental economic position is for Europe vis à
vis the U.S. What if the ECB cuts its rate and their currency keeps getting
stronger, buoyed by increased exports ha-ha, then what?
People better watch where they walk, for fear of being squashed by a falling
banker. Two days after the British investment bank Northern Rock was saved
by the bell from collapsing by the Bank of England, they declared a dividend
for their top officers, the blokes who did such a fine job of loading
the place up to the ceiling with worthless investments in sub-prime mortgage
securities. These guys can take their dividends and have one final blow-out
before they open the window and jump out. (They didn't pay out and
withdrew the divvy. Ed)
A victim of globalization, I was knocked out of the box long ago. But
Im happy now.I have no assets to seize. In fact, I have an edge
on all these analysts and structured finance accountants I know
how to survive in a jungle.
Things got so bad for me at one point that while I was commuting to my
shit job at a white shoe law firm, the bus driver jammed the brakes before
I was able to reach my seat. For fun. To watch me go flying around through
his rear-view mirror. As a result I broke my arm, requiring surgery.
Now I have not one, but two personal injury law firms going after the
MTA for me. You dont get two personal injury firms at work for you
unless you have an extremely strong case.
The only problem is, Im going to get paid in dollars, which are
sinking every day, and which are going to sink like a lead weight. I guarantee
you, Bushs family, being advised what he was doing to the economy,
got out of dollars long ago, the same as he let the Saudi royal family
flee the country after he fucked up 9/11. I intend to immediately do the
same as soon as I get my hands on my settlement.
But where to go? The British pound and the euro are going to collapse
too. It looks like the Swiss franc for me, because those Swiss bankers
are the worlds biggest pricks and its not likely that they
let themselves get sucked in. If there is a decline of western civilization
this collapse of the international monetary system has to be an integral
part of the process. Who is to blame? Nations can be sapped of their vigor
by bad leadership. This certainly seems to be shaping up as the case for
the (formerly) industrialized west. No amount of effort can overcome the
handicap of a blundering, myopic ruling class. Our continuing decline
has been long and steep, and our loss of manufacturing capacity is not
the least of it. How much wealth can be generated by a population that
is mainly employed talking on the telephone? Financial services alone
cannot keep a country rich. Even Switzerland, the worlds greatest
banking country, still makes watches and chocolates.
We have been led down the garden path for reasons that have not been made
comprehensible to us. People think of skills these days in terms of interpersonal
relations and clicking on a computer mouse. Everybody wants to be a stockbroker,
and look where that has led us!
At the beginning of the twentieth century Argentina enjoyed a standard
of living equivalent to the United States. Unfortunately they suffered
under a corrupt and grasping oligarchy and ham fisted military rule for
most of the century. The depletion of our military establishment due to
the war in Iraq may have postponed the latter occurrence, but we are firmly
in the grip of the former.
This writer has long maintained that a culture only learns from long experience
of suffering. Now the American people are going to learn the hard way
what they refused to learn through education and reflection: wishing does
not make it so. Anyway, Ill be long gone. Its now coming time
for the winds of change. Other countries and cultures will soon have the
chance to show what they can do. I wish them luck!
© Dean Borok October 1st 2007
Emperor's New CDOs
Dean Borok explains sub-prime lending
down into bite-sized pieces that even I can understand, this is how the
racket was set up:
Labor Day in New York City
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