I was reading yesterday a book "Dear Mr. Buffett" by a womaan named Janet Tavaloki on "the guts" of the current banking crisis (Ms. Tavaloki in her day job is a credit analyst who takes apart finance documents).
Reading between the lines of her book the whole world's banking structure is simply shot. It is like a hydrogen bomb has been buried in the world's fianancial system courtesy of Bush/Cheney and before them the Clintonites. This may be their last and most enduring contribuiton to the humanities.
The book is like reading a footnote of 250 pages, which is very long and obscure printed in eight point type. But my god what is says is that the world banks are sitting upon multiple trillions of dollars worth of financial instruments with little value.
I now wonder how long it will go on (the world financial system) ... days, weeks, months? No wonder Bernake is terrified each time I see him on TV. Geitner and Summers (now named "the Squid"... I had not also realized he is a dwarf) are also similarly irrelevant in this scernario.
Added to this malefaction (above) Citibank just raised it's interest rates on credit cards and "carried purchases".... to a "new" 30% interst rate... this from from previous rate of 11.9%. Pity everyone who was carrrying balances of $15 to $50 k on cards they got in mass mailings of the hundreds of millions during the last five years.
Bank card credits are now basically toast. More stark perhaps is the fact thaat now since small business can't get money from banks today they have been running their business(s) with cheap 11.9% money and simply rolling their balances. They too are now toast.
And ah ....yes! Why there is always James Kunstler to think about and what he says
"....If you think we have been in a crisis of finance and economy for the past year or so, consider that we have also been sunk in a comprehensive crisis of leadership. Nobody in authority is willing to face the truth, state the truth, and offer a reality-based idea about how to meet the truth, This is a leadership failure not just in politics and government, but also in business, in the university faculties, in the editorial and production offices of the news media, and even among a barely-breathing clergy.
Americans look around and see nobody standing up for their interests. Their greatest interest is a vision of a fruitful society that they can help build and be a part of beyond the current wreckage of revolving-debt consumerism. It will have to be a vision based on fewer resources and on new arrangements for daily living. It will have to recognize losses frankly, and enable us to let go of things whose time is over, whether that is Happy Motoring, college-for-everybody, vast industries devoted to vanished leisure, or procedures geared to getting something-for-nothing.
For now, I still see the inflection point as coming by the holiday season, when the masters-of-the-universe on Wall Street will have to publicly post their Christmas bonuses (and as publicly held corporations, they will have to). It is also well within the realm of possibility that a Black Swan the size of Rodan the Flying Reptile will swoop through the stock markets to breath fire on the computer terminals and melt the glorious rally of 09 away. In the meantime, I wonder about that man in the White House, and those ever more comical meetings he attends every day. He must emerge from them spinning like a nine dollar gyroscope. Nobody wants to imagine what happens to him when the spinning stops."
See:
kunstler.com |
