The mess of financial markets is no surprise. The blame runs a complete circle - unqualified mortgagees, brokers too happy to take commissions on the loans, institutions happy to buy & package the debt, the vast sums of investors clamoring for more and more of the oh-so-lucrative-and-secure mortgage backed securities, and "derivatives" (see: silly made up formula that involves taking a bet, on a bet, on a bet, on a bet made based on a lie and the accepting smile that says "sure, I believe you...").
Lehman is down, the DOW is down, the Futsi, Hang Sengm the DAX, but silver lining! The CAC-40 is UP...WTF?! (the French, go figure). By and large the global "markets" are in full me-too mode.
AIG is down and almost out based largely upon the losses that they must now cover n the super-risky derivatives market. So just to get this straight, AIG was selling insurance to protect against investment losses involving ultra-risky and stratosphically complex financial "instruments" (see: worthless bundles of paperwork which traders passed around were accompanied by congratulatory back-slaps, big commsions, and fat year-end bonuses).
Things would've been fine if the damn little guys had kept paying their mortgages. Forget that many never should've qualified, forget that oil/gas rose 3x in cost in the last 6 years (no, not pre-9/11, pre Operation Iraqi Liberation - O.I.L. ooops "Freedom" not Liberation. (For those really not paying attention, I shit you not, "Operation Iraqi Liberation - O.I.L." was the real first name given by the US Gov't to the Iraqi war...), forget that Healthcare costs have been increasing at an average rate of 15%/year for more than a decade now, forget that the incresed fuel costs make EVERYTHING more expensive - many food commodities, flour, corn, etc - have doubled of more in the last five years, and lastly please forget that ALL insurance is just a big PONZI scheme.
The plain and simple fact is that the "insurance industry" is a big numbers racket. No insurance company EVER has the assets to pay off all of its customers if a BIG ONE hits. Well, here is the big one. Let's throw in hurricane IKE just for some added fun, smack in the middle of Houston -"mission control" for so many oil service companies. D'ya think that'll have an additional affect? Hmm...
As Jane and John public you may have experienced the "that is not covered" cover story that insurance companies throw at you, as standard operating procedure, whether they do or do not actually cover something, because they know that a cetain percentage of folks just slump their shoulders and walk away - end of story. Well, "instutional investors" have no shoulders to slump and employ armies of lawyers to make sure that their asses.. err.. assets get covered.
OK, great story Kev, thanks. Time for the happy ending, right?
Unfortnately, I don't think so. This may be the time when we get to see the fake "15% annual growth" global economy fall apart. It's not real, you can't demand more every year just because shareholders want it. In the last 20 years, have watermelons got 15% larger every year? Has your significant other (or favorite celebrity) gotten 15% better-looking every year (naturally)?
Businesses can't keep growing and doing more just because of the demand for increased profits.
Real profits come from organic growth & real demand for real goods and services. I have a 6 year old iPod that works just fine, even though it only holds 2000 songs, I have a 10 year old car that works fine, and I don't need a little green monster to try and convince me that risking my liver is a reasonable proposition for getting rid of toe-fungus. STOP pushing more new stuff at me.
What do I need? Fresh tomatoes grown nearby, clean water, and a simple way to stay warm during the winter. Food and shelter for my family. All of this 1st world market mess is created because we've convinced ourselves (through hypnotic marketing, thanks) that we need so much, and then next year we need more, when what we really need is less so that we can look around us to really understand what IS important in life. (hint: family& friends dumbass - or solitude if that is your thing).
OK, I gotta go, time for my medicine. Thank god I saw that commercial for it during my favorite reality TV show.
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5 comments:
Very well put, Croninski!
Hey! I saw that commercial, too! We must all watch reality TV.
Or did I miss the point again?
u have toe fungus?
eww
ok, seriously....
Amen.
But, I suspect that you are preaching to the choir here.
What I learned from Croninski:
The Government has plans, the brokers have plans, Insurance companies have plans. You know, they're schemers. Schemers trying to control their worlds.
We at Cynics online are not schemers. We try to show the schemers how pathetic their attempts to control things really are.
Why don't we cut up all these Wall Streeters into little pieces and feed them to the pooches? Hmm? And then we'll see how loyal a hungry dog really is. It's not about money... it's about sending a message. Everything burns!
(sorry, I was channeling Health Ledger...)
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