I see that Wall Street is looking for a bottom to the hole it’s dug for itself.
Financial wizards have no taste for realism. They analyze the markets past movements and use them as criteria to predict future movements. The Greeks tell us that we walk into the future backwards, which is exactly what the wizards are doing in their naïve belief that the future will replicate the past.
The same is true of our presidential candidates, one of whom will replace you, if you allow him to. One writer points out that:
Both McCain and Obama remain prisoners of the neoliberal Washington Consensus. Obama’s top economic advisor is Austan Goolsbee, a Friedmanite from the University of Chicago, not exactly someone capable of reasoning outside of the golden Goldman Sachs box.
The truth is that both they and Wall Street are so inside the box they don’t even know they’re inside a box.
Bin Laden, in one of his taped infomercials, said that al-Qaeda’s strategy was to bleed the empire dry until it collapsed in bankruptcy. The strategy is a no-brainer when fools are running the shop.
In all the media yammering about our financial “crisis”, very little is said about the elephant in the room: the credit-default swaps (CDS). Here we are with up to a quadrillion in toilet paper wadded here and there throughout the system, and nobody seems to notice.
A credit-default swap is an insurance policy against an entity defaulting on a bond it has issued. The beauty of this instrument is that a speculator can take out a credit-default swap on a bond he doesn’t own from a hedge fund that doesn’t have the money to cover the bond’s default.
The holder of the CDS then shorts the company that issued the bond, which increases the possibility that the company will default on the bond, and sells his CDS, at a profit, to a third party who is not a bond holder.
Someone has compared it to taking out an insurance policy on my neighbor’s house from a company than couldn’t pay the loss were the house destroyed. I then torch his house, and, while it is burning, sell the policy to my neighbor across the street at a profit.
Do we need any more proof that greed rots the brain?