Friday, April 24, 2009

How to give CPR to a zombie.

On the surface, the mad burlesque of our banks trying to restore investor confidence by resorting to assorted accounting gimmicks that undermine what little investor confidence is left appears to be madness. Yet, this is the very madness that propels Wall Street.

Wall Street is a magic kingdom where if you say it, it will be so, since everybody believes it is so, even though it isn’t so, but who gives a fat flying fuck as long as everybody says it’s so.

So it is that they tell us our economic downturn has touched bottom. It makes no difference that what’s been touched isn’t bottom but is the submerged corpse of a zombie bank acting as if it’s out for a swim.

The Fed has pumped $13 trillion into the economy. The beauty of the number “trillion” is that it rhymes with “billion” and “million” so the public tends to conflate the three and has no feel for their relationship. If, instead of dollars, you denominate the three words in seconds, you get the following:

· A million equals 11.7 days
· A billion equals 37 years
· A trillion equals 37,000 years

So the Fed has pumped the equivalent of 481,000 years worth of capital into the system in an effort to replace the eons of capital the downturn has vaporized, even though the capital lost wasn’t real but was primarily indebtedness that was entered on the asset side of the ledger.

Of course, the money the Fed’s pumped into the economy isn’t exactly real either. It is what we say it is even though it really isn’t, but, once again, who gives a fat flying fuck if everyone says it’s real. It’s all a matter of which high priest can cast the best spell.

It is with a blind faith in sorcery that the Fed curls its toes into the sunken corpse and sees the light at the end of the tunnel even though it’s several hundred feet below the surface of water so murky it can’t see shit.

--Belacqua Jones

2 comments:

thepoetryman said...

Smack! This was such truth that it just sounded very funny when indeed it was not, but as you say, "Who gives a fat flying fuck", eh?

Case Wagenvoord said...

Therein lies the problem.