What's All This Then?

commentary on the passing parade

Agree? Disagree? Tell me

My Other Blog

Wednesday, September 24, 2008

Does it sound familiar?

We’ve had the unraveling of a series of financial houses of cards , and "experts" are telling us that if we don’t fix it NOW we could have a recession that could make 1929 look like a walk in the park. So the recommendation is for a bailout of our financial systems amounting to billions or maybe trillions - using non exiting dollars or borrowed dollars or printing press dollars or whatever you want to call the smoke and mirrors money game that’s being played with the rules being invented as play unfolds. Congress is being asked to approve the hundreds of billions that will be funneled back to the companies that blew the hundreds of billions so that they can save us all from a second great depression. By hiring a fox to guard the hen house. One man who says only he should be in charge of all that money and that no one should have the right to question what he does with it. Henry Paulson, who worked for Goldman Sachs for years pulling down millions of that funny money annually. It’s about as close to The Year of the Jackpot as I’ve seen in recent times. Once again Congress is being asked to give the Bush administration unprecedented authority to take unprecedented action - and there’s no time to stop and consider what they’re being asked to do. Act now, they’re being told - or we will be facing certain doom. As I said above - sound familiar?

Whatever the final outcome of this alleged crisis, it’ already had one positive outcome. It’s told us something about the Republican candidate for the presidency that many already know but that is becoming clearer and clearer to more and more people - that John McCain is, to use words that Sarah Palin might understand - one scary dude. His response to the crisis? To fire someone - if he could. It really didn’t matter who, but he picked on Chris Cox, Chairman of the SEC, saying that if he were president, he’d fire Cox. Presidents nominate people for that post but they don’t have the power to fire them once they’re in office - so he was wrong on that count - and to blame the incredible mess of the financial markets on one man exhibits the dangerous aspect of McCain’s nature that compels him to "act" - no matter how ill considered the act. Just show that you’re a man of action.

And then he blasted Washington lobbyists - a description of those running his campaign - and the greed of CEO’s who walk away from failed companies with golden parachutes - I guess excluding his -for the moment silent - financial advisor Carly Fiorina - who ran Hewlett- Packard into the ground and walked away with more than 40 million bucks. And for sure no blame for former Senator Phil Gramm - his other advisor who championed the deregulation of cockeyed financial instruments that led directly to this mess. And yet, mixed in with all this nonsense - he managed to find a way to put some blame on Obama The guy doesn't have the temperment to be president - as even conservative columnist George Will pointed out the other day. If you still want to vote for this man, you truly do need to have your head examined.

All of these financial troubles were supposedly precipitated by the sub prime mortgage debacle. So say the experts - and who am I to question their wisdom? I know very little about how thousands of sub prime mortgages were bundled together by financial con men and peddled as securities to unsuspecting pigeons

Some of what went on may have been fraudulent, but while these collapsing financial institutions may be populated with con men motivated by greed, I have a feeling that the con men may well be outnumbered by numskulls. Or maybe they’re one and the same.
Regular readers of this blog may remember my two day revelation of the idiocy of Capital One Financial Services - or at least of people working there and presumably representing the mid set of management of that company. That was on December 13, 2007 and December 17, 2007 I approached them on a simple matter that could have been resolved in a matter of minutes but Capital One was having none of that. Simple resolution wasn’t mentioned anywhere in their style book. If you read the back and forth e-mail correspondence that took place, you’ll probably finish up asking the same question that I asked. How the hell could people this stupid stay in business? I haven’t seen any reports that Capital One is one of the troubled financial companies - but it wouldn’t surprise me.

I have heard rumors about troubles at Citicorp and I wouldn’t be surprised to learn that the rumors are true because it seems that that company is also populated by numskulls. A few days ago both my wife and I got a letter in the mail from Citicorp - telling us that they had "decided to close our account due to inactivity." What they were referring to was a credit card account for which we never applied - but which indeed we found stuffed in a desk draw along with similar items. I don’t know how we ever got a Citicorp credit card. I imagine my wife and I are looked upon as potential suckers in the same way that unqualified people were used in the sub prime game to make profits for the con men of the financial world. They figure if they send you a credit card you might use it and start carrying a balance which accumulates interest and you’ll become part of their profit base. We do indeed have two or three other unsolicited credit cards which we never use. But none of the issuing companies have ever told us that they were withdrawing their card because we didn’t use it. Citicorp is a first. And maybe it is indeed a warning that they’re going under and want to hide how many people they’ve tried to sucker into becoming their debtors.

I have heard from someone who heard from someone in the bowels of a major international financial institution that what we’ve seen so far is just a small part of troubles ahead. And now we're hearing from Washington that as many as one hundred Americn banks could go belly up.It wouldn’t surprise me one bit.

So watch out below

And now we have the latest gimmick from McCain. Starting the week saying that the fundamentals of our economy are strong and ending it saying we are in the most serious crisis since World War II, he adds to the atmosphere of hysteria launched by Paulson, Bernanke and Bush, saying he must suspend his campaign, call off Friday’s debate and go back to Washington to help forge a deal to be in place before the markets open on Monday. Almost guaranteeing that the market would drop if there is no legislation in place by that time. As indeed there shouldn’t be. No matter how many Chicken Littles the administration lines up, the most dangerous thing that congress can do is to pass panic legislation. Without sufficient thought and with far too much emotion. We should have learned our lesson from the way congress caved and allowed Bush to involve us in the never ending Iraq disaster - which , in case you haven’t noticed - has made a major contribution to our financial woes but which McCain wants to continue indefinitely.

There is absolutely no reason for the presidential campaign to be suspended or for Friday’s debate to be delayed. The staffs of the two candidates can be and should be in touch with their congressional colleagues. Both candidates are a phone call away if their views are sought or needed. It is a gimmick folks. A Hail Mary pass by McCain. And why?

What happened between "the economy is fundamentally strong" and "the most serious crisis since World War II?" The "crisis" didn’t change. The polls did. They began to turn against McCain. That’s what happened. So the "maverick" decided it was time to "put country first" again. Just like he did in selecting Sarah Palin.

If the shoe was on the other foot, I have no doubt that McCain would have called it a political gimmick. I just wish that Obama hadn’t been so damned polite, long winded and professorial in his response this afternoon - but at least he made it clear that he wasn’t buying into the gimmick - pointing out that presidents should be able to pat their stomachs and chew gum at the same time and that the debate should go on as planned.