A Readers’ Digest of the news in 2008. 

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The novel of the 20^th century, Sophie’s Choice, really was a story about a great looking Polish woman who was living in Brooklyn after the war.  She had spent the war years working for a commandant in a concentration camp.  It was all about the times that she lived in.  She had two kids.  The commandant wanted her to sleep with him, in return for saving one of her two kids.  Sophie’s choice, on the surface, was about what child she wanted to save.  But the novel was really about evil.  It was about what had created the environment.  It was as much about what happened in those times, the banality of evil.  It had taken years for the environment to be created, choices made over the ten years before.  And Sophie never appreciated what the temperature of those times had created.

In Germany they gave preference to the Aryan race. This week the U S government showed preference to stockholders.  AIG was rescued.  Bond-holders, always affected by the yield of U S treasuries, bit the bullet.  The dollar soon would be in free fall.  Currency traders had to have made a killing this week, as the U S Dollar fell by a full cent in one 24-hour period this week.  Someone was being favored by these decisons.  When a ship was sinking, decisions had to be made as to who would be saved. Salvation.  Sophie’s Choice was really about a theme of salvation. 

Since May 2008, treasury yield have been sliced nearly in half, at one point on Friday.  The market closed at a yield of 2.18%, in a recovery if I am reading the chart right of 27.4%.   Treasury markets reflect decisions.  The following stories were posted yesterday.

“NEW YORK (MarketWatch) — Treasurys plunged Friday, sending yields on benchmark notes up by the most in at least two decades, amid investor relief that the U.S. government is planning a broader solution to the financial crisis.” 

”SAN FRANCISCO (MarketWatch) — A tumultuous week for financial markets was capped Friday with the closure of Northfork, W.Va.-based Ameribank Inc., the 12th U.S. bank closure so far this year. “

“NEW YORK (MarketWatch) — Rates on three-month Treasury bills, among the most popular assets for investors seeking quality amid market turmoil, rose back above 1% Friday. The rate had dropped to as little as 0.02% earlier in the week as companies ranging from Lehman Brothers to American International Group and Goldman Sachs came under pressure and fear grew that the country was headed for a depression. On Friday, rates rose by the most in at least 20 years after the U.S. government announced a broader plan to solve the financial crisis, including propping up money market funds and buying financial institution’s bad assets.  The rate had dropped to as little as 0.02% earlier in the week as companies ranging from Lehman Brothers to American International Group Goldman Sachs came under pressure and fear grew that the country was headed for a depression. On Friday, rates rose by the most in at least 20 years after the U.S. government announced a broader plan to solve the financial crisis, including propping up money market funds and buying financial institution’s bad assets.”

 
For now, salaries of professional ballplayers and the performers on Wall Street remained the same as they have for the last ten years.  These gods remained above the fray, elevated to their heights sometime by natural power, other times by performance enhancement drugs.  The system had been skewed, law if not order, to favor those in power.  The gods of Wall Street for the most part now owned sports franchises, compensated their athletes like they were compensated, not as mortals.  The end justified the means.   

In the aftermath of September 11^th, in the days of the War on Terror, we still assumed there was not evil on Wall Street, no self-interest.  Leaders know to speak of socializing losses, after privatizing gains.  Financial instruments, derivatives, were left to operate clandestinely, like the CIA, without regulation amidst all of this.   Unchallenged, more risk was taken in this shadow financial system.  Unchallenged, untested, ballplayers or rogues took more risk in their Game of Shadows (SEE book by Mark Fainaru-Wada and Lance Williams), in this shadow financial system.  What was the name of the book by those journalists from San Francisco who covered the BALCO story?

But there was now talk of a revolution coming in the financial markets, if not to these performers, financially supported by the 3500 lobbyists in Washington, for both parties. 

There was a new form of fascism in the stories this week.  That is if “fascism” was a word about comforts, with government offering instruction how all of us could live easier.  Government was now deciding who would be saved, which among us would be rescued. The free market was being replaced.   But it did not really all recently start with those positions in naked shorts.  Those naked shorts just revealed without fear what was there all along. 

In other news, Austrian authorities say a small earthquake set off a large World War II-era bomb in the garden of a Vienna home yesterday. No one was injured in the explosion.  But the affects of history were felt for years.