Money Why It’s All Going to be Ok
posted by on September 17 at 14:57 PM
(Or I’ve now switched from Mahler to Copland.)
1. Nobody—not the Republicans, Democrats nor the plutocrats actually running the show—want the October Surprise to be the collapse of the nation’s largest Savings & Loan.
Could you imagine WaMu’s forty million account holders getting a call weeks before the election that goes something like this: “Hi! We’ve lost all your money. But don’t worry, the Federal government will bail us out. Using your tax dollars! Here’s your number so you can wait in line. Hey, you’re number 32,324,664! Neat.”
No. Instead, there will be a shotgun wedding. We’ll all get to see now the game of chicken between Paulson on one side—saying no Bear Stearns style midwifery for you!—and the potential suitors—whining that all this shitty debt will scuff up their wingtips.
It’s all over, save the arguing over the dowry. And we—the taxpayers—are picking up the tab. Should be fun for us all! At least I won’t have to memorize a new checking account number for a while.
2. Oil is below $100 per barrel! For the first time in about six months! The latest bubble has popped, taking with it the entire Russian “economy.”
This is just as I predicted, twice. You know what date had the peak price of the bubble? July 3rd, my birthday. I’d like to think this was a little “hi!” to me from the Global Oil Conspiracy (TM).
High oil prices were like a knife held to the neck of the global economy, as we were all being mugged by the assorted collection of Russian, Middle Eastern and Texan oil oligarchs. Well, the muggers were sloppy and nicked the carotid.
As the global economy has bled to an inconvenient extent, the muggers have started to panic. Even the Saudi’s are ready to reopen the pumps.
Add in the new oil shale extraction techniques plus the newly discovered technique to collect America’s vast natural gas reserves and we’re well back on our path to totally destroy the global climate by profligate burning of cheap fossil fuels! Neat.
3. The vast consolidation of global wealth has made most of us disconnected from the most of the losses—so far!
Did you have a brokerage account at Lehman Brothers? Me neither! How about billions of dollars in Fannie Mae bonds? Me neither!
Thanks to Bushinomics, a breathtaking amount of global wealth was concentrated in the hands of a teeny few—the collection of petty dictators sitting on sovereign funds, monopolists and oil barons sitting on multibillions.
Want numbers? WaMu is the country’s largest savings and loan, with about 40 million depositors and about $150 billion in retail deposits. Our entire, collective, plebeian, life savings are chickenshit the scale of the losses of these diversified financial monstrosities managing the money of the wealthy few. We’re so far down on the wealth chain, that our meager earnings barely dent the vast sloshing of wealth battering the top.
Regular people might end lucky in all this. The housing bubble, at least, produced a whole bunch of new homes for people to live in. Food still is incredibly cheap by historical standards—and about to get cheaper again as oil prices come down, and commodities speculation dwindles down. The astonishing reality of our present is, trillions of dollars in wealth can be totally evaporated, and the overwhelming majority of us will still be fed and live indoors. Hopefully.
So ends my afternoon message of irrational exuberance! Go forth and serve.
I do have to say, the number of people with inherited wealth who are getting fucked is pretty awesome.
We'll be fine, UNLESS the fat cats get us to pick up the tab for all the money they gambled away. How likely do you think that is? We're already doing it.
Thank you Jonathan. I feel a little better. Sort of.
What's that? The Dow is down 449 points today? Erp... Slightly positive feelings evaporating...
Julie:
Irrational exuberance. Irrational.
Get on it.
Gold had its largest single day gain today, and oil closed up 6 bucks. So much for the commodity bubble bust.
Thanks for that irrationally exhuberant warming of my cockles, sir.
heard a rumor that wells fargo is going to buy WaMu.
Wow you are so wrong about oil. Oil is going up, up, and away. The latest drop in oil prices was due to dollar strengthening.
Deflationary arguments aside (they're bogus), we'll see $130 oil again by Christmas.
ok... i'm officially never paying attention to any sentence with the word "economy" in it ever again. i'm not a richwhiteman so it doesn't affect me in the slightest.
other sentences that are dead to me include the words:
commodity
wealth
"the dow"
bubble
funds
financial
bailout
savings
loan
"past due"
@4. I'm trying! Umm... The government can just print more money to get us out of this situation!! The Bush administration loves the American people and is looking out for our best interests! If I lose my job, I can always become a real estate agent or an alpaca farmer!!!
Hmm. That certainly was irrational exuberance, but I'm not sure I feel better.
This would sound really convincing if the government was only bailing out the customers and not the mis-managing/greedy corporate higher-ups of these institutions, but you can be assured that is not the case. We are still losing our money, just in round about way (i.e. Our taxes are going to our bank accounts and to the bailout that shouldn't be necessary instead instead of other important public services).
I'm leaving for Italy in a week for vacation; I wonder if I'll bother coming back.
@9
It's interesting that you're not interested in the economy. I'm not a rich white man either (but I am white) and I'm terribly interested in the economy.
If you work, the economy effects you. Even if you own nothing, the economy effects you.
Wake up and gain some understanding. Then the "RWF" won't be stealing from you everyday like they do now. Knowledge is power.
@11:
If you don't come back, can I have your house?
@8:
You aren't by any chance one of those folks who a few months ago predicted oil futures would reach $200 a barrel, are you?
Golob, you're getting more unhinged by the post.
'Tis a gift to be simple, Golob.
What about people who have been saving for retirement, or people who are relying on a pension fund? It's not only people like that guy on Monopoly money who are exposed to financial markets.
13 - You can sub-let my apartment. :P
WaMu's new CEO just got $20 million to take the position. Do you think that he'll have to give that money back? No. It's our money (from deposits and the like) that just went into his pocket; he'll pay a couple million in taxes on it, but that's just another money hole that the taxpayers are going to fill in with a bailout. He's stealing $20 million from the taxpayers essentially. And he's not the only one.
Hello Jonathan, thank you for another great post. I want to make sure you know about
http://thearchdruidreport.blogspot.com/
which offers a refreshingly clear and practical view of life at the end of the cheap-oil-age.
Re: your metaphor "We’re so far down on the wealth chain, that our meager earnings barely dent the vast sloshing of wealth battering the top."
dent the sloshing? batter the chain? hmmmm, maybe try
"We're so far down on the wealth chain, that our meager earnings barely scratch the paint job of the global economy."
cheers
I'm thinking doom and gloom is probably helpful to Barry O, so please save your happy ending posts till after the election! Kthxbai.
WAMU would be fine if they had not fucked up and made their slogan "WHOO-HOO" instead of "WOO-HOO" or even better "w00t!"
Dumbasses.
So what you're saying is the for the vast majority of people, life is good and getting better financially.
So it's the economy, dim bulb, then probably no need to "change"...
@21: Irony or not, what you're saying is that this shipwreck is a superb opportunity for a brisk swim, which will undoubtedly leave us healthier once we reach the shore, which you can just... well, you can almost see it right over that way...
@15 Your wit always puts a smile on my face.
Makes you want to shout at CNBC: It's not the ("fundamentally sound") economy, stupid! It's the fundamentally corrupt financial system.
@24
Seriously, you wanna roll with me to burn down the CNBC studios? What a bunch of hopeless pumpers.
When the stock market crashed in 1929, it was only stock brokers jumping out of windows at first. Of course, eventually the Great Depression hit even the common man with thousands of bank failures (no FDIC back in those days) and 25%+ unemployment rates. Even in bad times, the wealthy usually come out on top.
I guess what I wonder is what have the thousands of the "chosen"- the broker dudes/dudettes- been thinking about for the last few years? Do they talk at lunch? Do they all have houseboats on a river in bumfuck egypt? AREN'T THEY ALL KINDA SMART? Does money really derange people that much? Do I want to know? really? hmmm... ^..^
May I suggest to everyone that while the economy is fundamental to the lives of all Americans, day-to-day and long-term, we have an election coming up where we need to hold the candidates accountable for ALL of the policies and rhetoric they have produced in the weeks leading up to November 4? Immigration, education, foreign relations, and health policy are all extraordinarily important areas we should be looking at. While I appreciate Jonathan’s *heartening* take on news from the financial front, I also want answers to my questions about what the candidates propose to do to strengthen our position in the global health and research arena, for example. Bringing more research to the US can only help our global financial position and our economy. I notice that out of the slew of hopefuls for US Congress, only two Washington candidates have filled out the questionnaire at http://www.yourcandidatesyourhealth.org/ and gotten on the record about where they stand on these issues. Do you know what your candidate’s plans are for addressing the financial problems facing us today? It is useful to dialogue amongst ourselves about the issues, but in the end, we must decide who is best suited to represent our wishes in Congress and as President, and time is running short for making those informed choices! We cannot trust that only the very richest will suffer from the financial tumble, we should make sure that our elected officials have OUR best interests in mind in 2009.
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