Posts
Actually, after the pile-on of the first few days, my conclusions about the Spitzer kerwhipple# are:
1) He should never have forced his wife to “stand by her man” during his “mea culpa, mea culpa, mea maxima culpa” moment; and
2) He should not have resigned in the first place (which would have made step (1), supra, unnecessary). That was purely self-indulgent and/or cowardice on his part, and did not serve the interests of the people who elected him to office.* He really did need to stick around to breathe fire on our white-collar-criminal-class in/on/around Wall Street & Exchange Place. What he does in his off, or get it off, hours is his biz.
Just think for a moment about how what is now the United States’ “biggest slice” of our Really Gross domestic product — the so-called “financial sector” — has conducted itself over the past 20-or-so-odd years — really, since Reagan — he whose boys in the White House, the National Security Carousers, broke federal laws, aided and abetted money-laundering, guns-for-hostages, cocaine-smuggling — that whole crack epidemic in Los Angeles thing. And how vulnerable it was to an assault by a powerful government official who actually knew what the hell this “financial sector” (hereinafter referred to as the “White-Collar-Criminal Class” or WC3, not to be confused with W3C, which is the WorldWideWebConsortium) is and has been up to — and how they did it all.
2
We have had permanent, and escalating, corporate welfare. We have had increasingly lax, or non-existent, watchdogging of the IOU and gamblers' markets. With the repeal of Glass-Steagal, the banks, as the Savings & Loan Associations had before them (with the inflation of the FDIC insurance cap from about $15,000 to $115,000), became members of the gambler class along with all of the Casino Banks (so-called “investment” banks).When I was a kid, my parents encouraged me to save money. Bankers and bank tellers made a real cute “fuss” about “little Jimmy opening his first bank account.” Awww, that's thooo cute! You got a green or a purple “passbook” into which your weekly 25¢ deposits were recorded — later, maybe $10 deposits when you mowed lawns, raked leaves and pulled weeds after school and in the summer.
And, oooh yeah: THE PASSBOOK ACCOUNTS PAID 5.25% INTEREST!! There was actually a POINT in putting money in the bank. Now it's just for convenience, unless you lock up your “liquidity” for some number of months, making it less convenient to have it in a bank than ever it was with passbooks, where you had to go to the bank to withdraw money.
Now our accounts are “free” — of interest, but not, unfortunately, of fees.
So what does Spitzer know about the WC3 in the gamblers’ den called Wall Street?
3
Anyway, you get a bunch of guys ’n’ gals taking really stinky IOUs from reasonably defenseless consumers. These are “mortgages.” They’re using OPM — other people’s money — to buy these IOUs. Money from the previous owner of the property or, in the case of “re-financing,” from the current owner of the property. That is, the “loan origination fee” or the “brokers fee” or the “commission” or the “vigorish” comes out of the little dollar dances done at “closings.”
[As an aside: If you’ve ever looked at the HUD “full disclosure statement” when you buy a house, you should have noticed that, while there is an interest rate of some number, say 6.25%, mentioned on the document, when you look at the dollars borrowed and the total dollars to be paid back, the interest rate is actually 300%. That is, you pay back the principal of the loan, or 100%. And then twice that amount, 200%, in interest. Total: 300%. To be sure, that is “over the life of the loan,” IOU or mortgage. I’m just sayin’.]
It used to be that the bank, the consumer’s “neighborhood” bank” was betting that:
1) You would pay back your 300% IOU or:
2) If you didn’t, the house would be worth enough to cover enough of the loan when you defaulted so they wouldn’t lose their shirt.
And the bankers were in the same neighborhood, in the Chamber of Commerce & Rotary Club, etc., and could have some positive impact on the value of housing in the community. All that “enlightened self-interest” hot-footed it out of the kitchen when the “national” mortgage outfits started peddling the IOUs.
Then a bank buys the IOUs from the “originator,” and pays him a commission. Then the bank sells a bunch of these IOUs to another bank. The employee who does the selling gets a commish, (has anyone done any reporting on the amount of these fees?); the bank sells them all at some discount from that 300% they’d have gotten paid back over 30 or 15 years, but they get the money up front. I think this has to do with all those “net present value” formulæ you find in your spreadsheet’s tool basket. I profess my ignorance, other than to admit that probably “two in the hand’s worth more than one in the Bush,” or however Dubyuh would put it.
I don’t quite know how the hundreds and thousands of IOUs get “securitized,” but I reckon that there’s some kind of numbering scheme to indicate each one of the separate IOUs, and that a batch of those numbers is typed or printed onto some Annex or Appendix to some other piece of paper, and that you don’t call it “A Bunch of IOUs.” What would you call it? “A Really Big Revenue Stream of $30 Million, Give Or Take, Per Month From A Bunch of IOUs”?
Our WC3 would probably call it a “product” of some sort, but nobody’s doing anything but printing paper — of the 8.5 x 14-inch size — and getting signatures and trading other, much smaller pieces of paper (now of the 2 3/4 x 6-inch or so size — if I had some, I’d measure ’em, but I don’t, so I’m just guessing.) And it’s parti-colored paper, too! Whee.
It’s still just a bet. A much bigger bet than the first IOU. Somehow, though, the bets and the odds on those bets got munged into such a big pile of paper, or computer printouts, — or, conversely, got separated into piles that were so far apart — that, had anyone wanted to try, they could not have traced each one of the IOUs back to the guy or gal who first signed it.
I don’t know how they did it, but somehow, the individual loans or IOUs must have gotten separated from the NEW paper products. Dunno why, but I think “toilet paper” whenever anyone in “the finance sector” talks about “products”; they don’t SAY paper products, but because I know that they only make IOUs, and the IOUs are melted toner on shredded dead trees. So, ipso facto, they’re paper products. True, our WC3’s also produce the giant sucking sound of money coming out of other people’s wallets and their governments’ treasuries, but isn’t that an intangible? Or is it tangible? Or fungible?)
I conclude that some kind of IOU amnesia must have taken place, because we’re told that “the financial sector” (or WC3) cannot figure out how to “price to market,” is it? these amalgamated IOUs. Or do they call it the “price point”? That is, they can’t predict who gets speared at a particular price, maybe?
You have to wonder, this being the main difficulty complained of about the bail-out program “Toxic Assets: Rapine & Plunder by” (TARPby, the “means-by-which” silent, as always) how it was that the so-called “risk-factor rating agencies” in the so-called “financial sector” ever managed to assert any particular label of riskiness regarding these IOUs. I mean, if you can’t trace the IOUs back to the original signer and check ’em out, how can you honestly say that the riskiness is AAA or ABA or whatever labels these guys use?
Or was it the case that they couldn’t — and didn’t? That is, they just said that the riskiness is AAA or ABA--and the honesty was silent. Or maybe the theory that carried the day (weeks, months, and years) was “All’s fair in love and war,” and the “financial sector,” as in WW1, is engaged in tranch warfare.
All the “financial sector” people sound so experty and neoflavinadnoidal when they talk about “tranches”; I’ll bet the girls all think Jimmy Baker III (or IIII or IIIIIII?) looks sexy when he barks “Capture the tranches, men!”
Supposedly a “tranch” is just a “slice,” en Francais. But is it a slice of π, or of cheese, or a golf slice (with a wedge)? Like a sector on a π chart? And how would you slice hundreds and hundreds of IOUs? Mash them all into a watter-sogged paste and then roll ’em out into a sheet? Maybe that’s it! But you roll ’em out into a ROUND sheet, like a π-crust, dry ’em and cut ’em into π-slices. And then of course it makes total sense why you couldn’t figure out whose IOU was whose. It’d be like trying to read the note from your girlfriend after it had gone through the washer in the pocket of your dungarees. (Hey, don’t mock! “Jeans” is fading; dungarees’ll be in again. Just think what’s happened with fads like string ties, or saddle-shoes or defending the Constitution.)]
Now, when we’ve got a slice of IOU π (that’s 3.417, etc.), the WC3 tie a bunch of them together, securely. (Is that when they become a “security”? But if the knots slip, are they then called “loositys”?) Dunno.
But pretty soon, however securely these IOU slices are tied, the WC3s are taking IOUs from the rubes (that's us, or maybe our pension fund manager, or bank, or mutual fund manager) who are betting on whether this or that loosity or security will be paid off, or won’t. And then they’re using some of their commissions on all of these bets to buy insurance on all these bets on the side-bets on the side-bets.
I think these are called “derivatives,” sort of like a horse race where you don’t bet on the horse to win, place or show, or the amount of sweat on the horse as it gallops by the finish line, or even on the smell of the sweat on the horse as it gallops by the finish line; with derivatives, you bet on what other people will THINK of the smell of the sweat on the horse as it gallops by the finish line. And then you sell bets with or against the WC3s who are betting against the guys who have the IOUs of the guys who bet people will think the horse-sweat smells sweet or against the guys who have the IOUs of the guys who bet people will think the horse-sweat doesn’t smell sweet. Or both. Or all of them.
And finally the White-Collar-Criminal Class Community (that’s WC4) finds itself holding nothing but IOUs that stink.
Which is where we are today, no?
What I want to know is how grown men all around the world can get away with betting so much of so many other people’s money on the opinion about the stench of stale, dried horse-sweat, losing those bets, then demanding that the people give them even MORE money to make up for those losses, without being horse-whipped and sent to prison. It smells like horse-shit to me. And not in a good way.
Seems to me that Elliot Spitzer had a solid, tight grip on the horse-whip. Even better, he apparently practicing using it, both frequently and often, to keep his hand in, so to speak.
Which is, in the final analysis, why he should not have resigned, and should, instead, have taken on the WC3, and even better, the whole WC4. Seems to me that every member of the White-Collar Criminal Class in their WC3 Communities is playing the same game at which Spitzer has become a triple black belt — an avowed master, a sensei. The game they’re all playing is Stocks and Bondage. And they all knew that Spitzer could whip them into the stocks, and keep them there for a long, long time — the kind of bondage that would make everyone gasp ecstatically, if I may be permitted to carry the conceit this far.
—————————footnotes———————
# Kerwhipple: that’s like a kerfuffle, but with whips, not fuffles)* "…elected him to office." This means accepting as “real,” for the sake of argument, the frail notion that “the people” have anything to do with elections anymore — even though Obama was not derailed by election fraud in the Nov. 4, 2008 election (not “voter fraud,” as that's been proven to be virtually non-existent).
The problem is now and has always been ELECTION FRAUD, or the criminal conduct of those officials in control of the elections — or who are responsible without control, as is the case when election officials (or states, or counties or municipalities) buy computerized vote-registering and -tallying machines and it’s the manufacturers who maintain control because they refuse to make public the software (the software should be open-source like Unix or Linux or PROMIS—the Prosecutors’ Mgmnt Info. System).
———30———
0 comments:
Post a Comment