RIPLEY: ..because just one of them managed to kill my entire crew in less than twenty-four hours.
LUELYN: Thank you; that will be all!
RIPLEY: God damn it; that is not all! Because if just one of those things gets down here, then that will be all -- and all of this, this bullshit you think is so important -- you can just kiss all that goodbye!!
-- Sigourney Weaver, Aliens (1986)
At Firedoglake, another dirty hippie terrorist supporter website, commentator Ruth Calvo makes a few observations about our teensy little economic problems.
Calvo relates (new paragraphing only added for clarity):
One example of academics gone terribly wrong... is a relative who swallowed whole the teachings at Harvard’s School of Business about creative debt, a.k.a. ‘deficits don’t matter’. Now underwater in a huge mortgage, his retirement funds and borrowings against a house, invested in the market, disappeared, as did so many other retirement plans.
Now, he’s struggling to keep his home from foreclosure while his wife is working in retirement to manage their living expenses. Like all too many of our generation, under assurances that economic theories he’d paid dearly to study, combined with the siren call of living high and paying later, this business school believer went over a cliff of controlled and rational planning sold widely by the purveyors of debt. Those credit card companies and financial houses are living high, even now, on those outdated theories’ effects.
...
An economy consisting almost entirely of hyper-extended households ‘having it now’ suddenly had to cope with twice and more the amount budgeted for that ‘controlled debt’. The paycheck-to-paycheck majority got into more debt than it could afford. The first card in our national house of cards toppled.
After that, each incremental share of our overextended house of cards began an inevitable tumble that is barely above depression level nationally, while personally the tragedy in many households is at depression level.
...
That your debt is their profit is as far as [the financial sector] can see. That is the lowest and last layer in the total house of cards our economy had become. If they can’t let go, and become part of the functioning, REAL, economy, that last layer is on the verge of tumbling.
Believing in myths, and putting a balance on their books that ignores investments in bundled "toxic" mortgages – which include a preponderance of debt that will go unpaid – means that REAL value has been wiped out. Holding tight to a blind faith in outmoded and wrong theories has led to a whole system based on a ground floor that is gone.
"Mark to Market" – the term for accepting actual monetary reckoning on all those bundled bad mortgages – is the sound of that last row of cards beginning to believe in gravity.
As I said the other day, the amount of bad debt held by the financial industry is like nuclear waste: We can't eat it, launch it into the sun, or transform it into cute stuffed animals and sell them at airports and County Fairs.
This is what the efforts of the Obama administation, the banks, Secretary Timmeh and Gentle Helicopter Ben have been about since the beginning of 2009: Shore up the banks and investment houses to prevent complete collapse; keep people thinking everything will be just the way it was. Hope that no one notices the truth, and that the Banksters can find some way to, you know... fix things ... except, that isn't possible.
Now do you understand why the banks won't lend money? Do you see why those who have the capability of increasing their wealth are doing so, with tooth and claw?
This is what's behind the curtain, boys and girls; this is what the last question on The Final will cover. Or, as The Great Curmudgeon puts it,
...I think Ruth has it about right. The financial system is like a house of cards that is teetering on the brink of collapse. Sooner or later all the assets held by the banks will have to be valued at market rates instead of the inflated values currently assigned to them.
I suppose our betters are hoping that either the housing market will re-inflate or that they can spread the losses out over several years for a soft landing. Either way, it's not very comfortable knowing that we're so close to having the whole house collapse.
All it will take is a severe shock, or a series of them -- and, not even here in the United States; which is why the problems of economies outside our own really do matter.
But, another New Orleans, another 9-11, or imploding financial giant... and the time that TARP and the Obama stimulus package bought for the Old World we all grew up in, financed by debt and greed, will run out.
And that's why buffoons like Beck or Palin, and the kind of theocratic politics they represent, are worth watching -- because in the worst of times, the Worst can rise and seize the day.
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