Taking Stock

Rolling Stone's Matt Taibbi can be vulgar, crude and beyond incendiary and usually I love him all the more for it. Especially with the piece he wrote in the October 15th issue (RS 1089). Dude might want to relax on some of the heavier drugs though because he is getting super paranoid, and yet frankly I fear he may be on to something.

He addresses the unknown figure who gambled on March 11, 2008 that Bear Stearns' shares value would precipitously drop and was right. Taibbi calls it as insider manipulation, an effort on behalf of this mystery figure to cause Bear Stearn's demise. Adding to the general X-Files aura of the whole thing, there was a meeting that same day of the Federal Reserve Bank of NY which was attended by Both Ben Bernanke, Timothy Geithner and all the major Wall Street investment banks EXCEPT Bear Stearns. And the plot thickens.

It isn't known exactly what happened at the meeting, but by the time it ended Bear Stearns' fate was sealed and investors started banking that the company was going down. Apparently it all has to do with a practice called naked shortselling. Taibbi explains it and I almost understood it which says a lot of his powers of explanation, because banking ain't something Broad gets. I won't bore you with the details or try to explain it myself, but suffice it to say it is dirty and underhanded and generally kind of illegal (you can check out the link to the article above to get the scoop yourselves).

But it doesn't stop there. Apparently someone later tried this with Lehman Brothers and it of course worked again. Vanity Fair addressed the topic in an excerpt from Andrew Ross Sorkin's upcoming book in its November issue. Of course Sorkin is more deferential, polite, etc. than Taibbi and he also doesn't have the paranoid "they are all out to get us" ideas behind his article, but he adds that Morgan Stanley and Goldman Sachs feared they were next. From the tenor of Taibbi's piece I would say that just ain't so, that those two were in on the death of Bear Stearns and Lehman Brothers, but I don't want to fall into complete conjecture.

The takeaway for me is that the banking and investment worlds are dark, murky places and the inside folks like it that way. They don't want the average American to know or understand what they are up to because once we understood it, we would be appalled. It appears that much of what is going on Wall Street is legalized stealing and lying in many ways, but I guess that shouldn't come as too much of a surprise to any of us anymore.

What I can't help but wonder is if we had allowed these banks and investment companies that were deemed "too big to fail" to actually fail, how much would the average American have been hurt? Or would if have just wondered those people who will be fingering their six figure bonuses come this Christmas?

Endings vs. Beginnings

I feel like I have bought a LOT of sympathy cards lately. It has not been a good couple of weeks for grandparents. The juxtaposition of this with today being the first day of spring really struck me. I have my own little theory of how things work, we could call it the Broad Way, if we were so inclined, and while it hasn't been codified or compiled in any logical manner it exists in a free floating form in my head. (Much as just about anything exists in my head, although if you should never go in against a Sicilian when death is on the line, then equally true is never go against Broad when 80s music trivia is on the line. Lethal.)

The Broad Way strongly espouses that reincarnation is a possibility, because why would God be wasteful? The Broad Way has also concluded that most people create a lot of the drama in their own lives; loving someone involves so much more than being in love with them; and sometimes a half hour spent in Target is all you need to cleanse a troubled soul. I could go on, but you get the idea.

But all the recent losses for my friends and their families coupled with the idea of spring as a time of rebirth makes me pause. Which leads me to think that the Broad Way needs an amendment. Let's call it the teeter totter amendment—equal good and bad must happen in the world for things to stay in balance. I don't think there can be an change for the future without some sort of loss from the past. Change can be good or bad.  So can loss. Sometimes we loose things and it turns out to be the best thing in the world for us, it kicks us in the butt and helps us to move forward. Sometimes we gain things that restrict our ability to live the way we should.

Where am I going with this? Good question. Not sure I have a good answer, but to put it into a worldview/political perspective, I noticed today's headline on the local paper put my state's unemployment rate at 9.9%. That is the average of course, some counties are higher, some lower, but overall that is a high number. Obviously that is bad. Ben Bernecke has recently said that the US recession could be over by the end of this year. While the end of the recession certainly won't mean that all the people who have lost jobs have found new ones, it will mean that our economy will be on a more stable footing and hopefully the massive job losses will be a thing of the past. Good. Perhaps even better, would be if we came out of this with a better grasp on how our money is invested and what gains are realistic and sustainable.

So today is the first day of spring. New things are coming, it is a beginning.

Calamity George

Time to set the DVR's gentle readers, our illustrious leader will address the nation this eve to allay our fears about the economy and expound on the three (I SHIT YOU NOT!) page document that Congress received from Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke explaining why they needed $700 billion and fast, no questions asked to fix this mess.

Um, dudes . . . I don't think so.

Something tells me ole Georgie Boy doesn't have the vocabulary to make this disaster make sense. But it might be good for kicks and giggles, if of course your heart doesn't explode from your elevated blood pressure.

And just when the networks were finally unveiling some new shows to watch.