As I peruse the various news websites today, it seems clear we have a fairly serious financial meltdown on our hands. Lehman’s gone, Merrill Lynch has been bought by Bank of America, and the big-ass insurer AIG is on the verge of going belly-up. And all the other BFFs (Big Financial Fuc.., uh Firms) seem to be on edge. You know it’s bad when we have the big font on the top of nytimes.com. So I guess we have a major crisis that if not worth of an advocacy campaign, is at least important enough to merit continued scrutiny.
My problem? I couldn’t care less. It hurts just to click on the story links, let alone read the articles. Now I know this is probably an irrational response, but what do I care if a bunch of BFFs and their buddies are in pain? What do I know about these arcane business deals (little, but you’ll note that doesn’t stop the rant). This is a mess of their making (can you spell G-R-E-E-D) , and I’m not alone in that emotion- check out the comments section on any of these stories. This seems to be the general sentiment:
September 15th,
2008
1:45 pmYou all deserve to lose your jobs. You are the ones who created this mess. “…great institutions and will be missed. I Wish my friends there the best…”
Well, I don’t wish them…thank god I didn’t have any investments tied up with these loser firms. The good thing is that apartment prices in NYC should come down and lots more foreclosures as well. Maybe I can buy an apartment at a 30-40% discount from current prices.
Posted by Hahahhaha
And:
September 15th,
2008
2:02 pmWill somebody, somewhere, finally be held accountable for this mess? Don’t tell me nobody did anything wrong.
Posted by Manteca
I mean, these are my general impulses- a hefty dose of schadenfreude and a general”isn’t anyone accountable?” mentality. But the current running underneath all of that is “what the hell does this have to do with my life?”
Because it’s not like I work for a BFF, want to work for a BFF, or have lots of friends that work at BFFs. Nor do I own a lot of stocks. And in these ways, I am similar to the vast- vast- majority of Americans. What is it, 90% of stocks in America are owned by the wealthiest 5% of Americans? Something like that, anyway. So why, exactly, should I concern myself with Wall Street goings-on?
Wait a minute! I know why. Because when Wall Street is on a high, they keep the rewards for themselves, but when they get the sniffles, the pain gets spread around. So while I have not been impacted at all by the past 6 years of high-flying boom times, probably somewhere, at some point, I’m going to get shafted by the BFFs, or (more likely) the government acting on their behalf. Great. All because they had to have their fancy-ass credit default swaps and all manner of other blathering financial transactions, which anyone with any common sense could tell were bullshit (the simple act of buying and selling a mortgage does not increase its value, by the way). Why did they need these transactions? To make ungodly, obscene amounts of money.
Because the act of selling and holding mortgages isn’t sexy. Oh no. That’s for chumps- like Fannie Mae and Freddie Mac. We have to bundle and securitize and insure and derive non-existent valuations. Simply lending money and making a reasonable profit over the long term isn’t enough. That’s what neighborhood banks used to do (chumps that they were). Neighborhood banks were satisfied with reasonable profits and the archaic ideal of playing a positive role in their community. There aren’t many neighborhood banks left, and the ones that are have swooned at the altar of securitization and byzantine financial transactions.
That byzantine nature is the fundamental problem today- nobody knows what anything is worth. And the BFFs are all up in arms about this, demanding government guarantees, pissing and moaning about “uncertain valuations”. What they conveniently forget is that the opaque nature of these stupid transactions was great for them- nobody could value it, so the assets (and more importantly, their derivatives) were simply valued at whatever the BFFs said they were worth. That’s what they wanted. It worked out nicely for all involved, because then they could create a nice big economic bubble that allowed them to make those ungodly, obscene amounts of money.
So kiss my ass, BFFs. I’m sure you’ll get me somewhere down the line. In the meantime, I want to hear from somebody that will tell me how to stop this from happening again (HELLO OBAMA?). My worry is that it’s too late- all the regulators are in the pocket of the supposedly regulated. More importantly, they are philosophically in the pocket of the regulated. Hopefully it won’t take another generation of this shit before we again discover how to regulate markets in a manner that benefits the common good.
