Baseball91's Weblog

March 3, 2009

The Noonday Demon

Filed under: Ben Benanke,currency,euro — baseball91 @ 2:38 AM
Tags: ,

 

The opposite of depression is not happiness but vitality.  A defintion of depression involves the loss of vitality.  When you are depressed, the past and the future are absorbed entirely by the present, as in the world of a three-year-old.

 

The blame game.  With joint and several liability, politicians now deserve the blame with bankers and Wall Street.  And they all point to people who wanted to buy homes when they could not afford it.  The system, the financial system, the political system, the capitalistic system, were all in a mess.  This threat included its affect on the power structures of the governments and the armies of the world.  A failure by the government to support the U.S. financial system could lead to “a depression,” Senator Charles Schumer, a New York Democrat told reporters in September 2008. “To do nothing is to risk the kind of economic downturn this country hasn’t seen in 60 years.”

 

These financial wizards created this mess in the first place.  So their life and their lifestyle were threatened.  The answers have yet to be found.   

 

From The Noonday Demon, by Alan Solomon, which won the National Book Award book in 2001:  All this made me feel that I was losing my self. Scared, I tried to schedule pleasures. I went to parties and failed to have fun, saw friends and failed to connect; I bought things I had previously wanted and gained no satisfaction from them. I was overwhelmed by messages on my answering machine and ceased to return calls.”

 

The down side.  For banks.  Not liquid.  With no value.  The big ones.  A little more than half of the U.S. Banks.  Pretend banks.  The news was worse about Europe. 

 

We have lived through the times when the banks quit playing for the community.  When Citibank arrived.  And put that local banker out of business. 

 

Trends. Business trends are so evident.  Saved banks….but banks not fixed.  As a result of big banks in too many businesses, this republic is threatened.  The scale of the problem.  Bloomberg has reported the total bailout and loan guarantees, the stimulus, total $9.7 trillion now – enough to pay 90% of all US home mortgages.   This was not just sub-prime crisis.  A calamity was a lot like fire.  People cannot buy homes and cars from a banking system where half of the banks are on the brink.  And the rest of us cannot sell. 

 

The fire news from Australia, last month.  It was miles away and then… WOW!  The fire was HERE.  All around. 

 

Pretend banks.  The fact is that undercapitalization is by definition a solvency problem. 

 

“It is going to take some time to work,” I heard the current Treasury secretary say last week. 

 

The lender of last resort seems to be racing headlong onto the road of nationalization not so much as to help the common people as to keep dying financial dinosaurs alive. The Fed continues to pretend that firms likes AIG are merely going through a liquidity crunch, nationalizing all dying enterprises.
 

But the story in the coming weeks will be about the euro’s fall. 

 

February 27, 2009….. OTTAWA and TORONTO — The global recession could bankrupt as many as 16 countries, and the world’s lender of last resort says it doesn’t have anywhere near enough money to bail them all out. That’s the hard message contained in a report released yesterday by the International Monetary Fund, as Latvia’s Prime Minister-designate warned that the government is on the edge of financial collapse, Romania’s central bank chief said the country may need IMF aid to stabilize its deteriorating finances and several other countries showed widening cracks stemming from the rising tide of financial and economic woes swamping the globe.  ….Latvia, Ukraine, and Hungary lead the way.  Mr. Strauss-Kahn is paying the price for richer countries’ refusal to yield more power, said Bessma Momani, a senior fellow at the Waterloo, Ont.-based Centre for International Governance Innovation, who studies the IMF.  Asian countries have piled up hundreds of billions in foreign exchange reserves since the continent’s currency crisis in the late 1990s in part because they felt the fund mishandled the situation.”

I noted last November that according to Elizabether Moyer in Forbes, fighting the financial crisis has put the U.S. on the hook for some $5 trillion, one report says.  So far.  She felt that for all the “fury” over Treasury Secretary Henry Paulson’s $700 billion emergency economic relief fund, it seems downright puny when compared to the running total of the government’s response to the credit crisis.  According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.”  I think that if these financial institutions have their way, the worldwide bailout will take 30 years and end up costing more than $350 trillion in the credit derivatives written.  And somehow these guys –what was the name of the Thomas Wolfe novel in the 1980s? –expected to go about their jobs collecting their regular pay, letting the tax codes prop up the world they created.    That ultimately was what the government created by lobbyist, brought to you on radio and television by sponsors, was now trying to sell. 

 

“A mourning for our past.”  America was about to be reinvented.  Between the credit markets and the equity markets.  And this time not by the spin doctors.

The loss of vitality was occurring everywhere in the western world. 

Advertisements

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

%d bloggers like this: