http://jameshowardkunstler.typepad.com/clusterfuck_nation/2008/07/pretend-o-rama.html
Clusterfu*k Nation by Jim Kunstler Comment on current events by the
author of "The Long Emergency" (also on www.kunstler.com ) Pretend-O-Rama
Apology to readers:
after being hassled by Canadian immigration officials at the
Edmonton, Alberta, airport on Sunday afternoon, and in a rush
to make my connecting flight to Grand Prairie, I stupidly
left my Mac notebook in a plastic tub at the security gate.
Luckily, they'd checked it into the security lost-and-found a
nd gave me clear instructions for retrieving it when I called to inquire.
I picked it up today (Tuesday) on my way back through
Edmonton en route to Vancouver.
Written on Sunday July 20
The comprehensive bankruptcy of the United States, at every level,
in all corners, atop each hill and mole-hill, and down not a few rat-holes,
is preceding like some kind of hideous multi-media, inter-dimensional
cosmic grand opera as produced and directed by the Devil.
Every week, some bizarre new subplot is introduced
by the stage managers, each turn and twist geared
to produce maximum pain and carnage in the US economy,
as if to foreclose any possibility of redemption on the way down.
Well, the absence of hope is, after all, the essential nature of Hell
(setting aside, for the moment, J.P. Sartre's quaint notion
that Hell is other people).
Among the many developments in the story last week was
the solidifying consensus that the nation is in really serious trouble,
and the noticeable slippage of legitimacy
among those pretending to run financial affairs.
The howler of the week was the Securities & Exchange Commn's
edict that Wall Street sportsters would be prohibited
from trafficking in so-called "naked short" sales
against a cherry-picked bunch of 19 banks
and financial companies for the next two weeks.
A cute trick, Naked Shorting is done by
Pretending to Borrow a bunch of Stocks,
Pretending to Sell them High
just before the share-price falls,
Pretending to Buy them Back at a lower price
when the share price has fallen, and then
Pretending to Return Exactly the same number
of lower-priced shares to the lender,
Pocketing the Difference.
Real shorting is cute enough, and involves "clearing" the sales -
- i.e. proving that real stocks were really lent and really returned.
Shorting is helped along by generating rumors
that a given company is in trouble,
thus nudging share prices down.
This works really well when a company
already is known to be struggling, as many now are.
In fact, it usually works best
when a struggle turns into a feeding-frenzy -
- as when a bleeding mullet attracts the swarming sharks.
When this scam is run using odd-lots of millions
and tens-of-millions of shares sharked up at many dollars each,
the profits to be made in this sport is obviously huge.
With naked shorting, however, the stocks being shorted
are basically non-existent, imaginary, made-up, fictional,
registered only as pixels in a program.
It's a racket, pure and simple, run by both the
supposed borrower of the stocks and the
supposed lender and, more to the point,
was wholly and absolutely against the law
before the SEC declared a selective holiday from it last week.
So, what the SEC action really demonstrates
is the utter lawlessness reigning on Wall Street,
and the SEC's singular unfitness as an enforcer of the laws,
not to mention the criminal irresponsibility
of the clearing authorities who only
Pretend to go through the Motions
of certifying the sales.
What's more, the Companies
Cherry-Picked for Immunity against Shorting
were some of the Very Companies believed
to be Most Active in Profiting Off
Naked Short Sales
against other companies. - (LOL!!!)
Thus, the credibility of all the authorities in American finance,
including the Secretary of the Treasury, Mr. Paulson,
the head of the Federal Reserve, Mr. Bernanke,
the director of the SEC, Mr. Cox,
takes on the Aroma of Week-Old DEAD CARP,
while the affairs of American banking and business
as a general proposition look to the rest of the world
like a Simple LOOTING Operation,
reflecting poorly on the paper certificates
that we use as "money" in the land of the free.
The odor of blood and desperation around these activities
must be sending a strong signal to those offshore
who hold American dollars in some form or other.
It must make them
rather itchy to DUMP Them - while the Dumping is GOOD
- before some clever American B-School Boyz figure out a way
to short their own country (if they haven't already done that).
Finally, Mr. Bush presides at a remove from all this,
sitting just offstage in his own special velveteen loge of Hell,
watching this opera-to-end-all-operas,
and waiting for his reputation to be sealed
as the historical equivalent
of something found in a colostomy bag.
The sub-plot of Fannie Mae and Freddie Mac
just lends a romantic edge to the show.
You could spin it off as a sitcom called
"The Fu*ked and the Feckless."
This would include all the poor shlubs who signed
$XXX-K mortgage contracts, for houses now worth
$XXX-K-minus-XX-K (and still sinking),
as well as the shareholders, who saw their share prices
approach penny stock range
(especially the pensioners whose fund managers
gorged on Fannie and Freddie paper) and not least
the sovereign wealth funds of China and Russia.
Those responsible for fu*king everybody,
the investment bankers who engineered the tranches
of securitized bundled non-performing mortgages,
and pocketed huge fees for doing so,
are now conniving to off-load the liability
of all this worthless paper on the taxpayers,
led by chief conniver, Secretary Paulson.
Meanwhile, the runs on the banks are just beginning
with Indymac last week and Whachovia
warming up to catch the baton this week,
with more banks waiting
to enter the relay race to insolvency.
It's becoming obvious that the
Federal Deposit Insurance Corporation
will Choke and Croak
on this WAD of LOSSES, and its Liabilities
will also be Fobbed onto the Taxpayers.
In the meantime, though, it will be obvious that
the full faith backing of the United States is an empty promise.
That may be the near-term endgame for all this pretending.
When American depositors get screwed out of their deposits
and the deposit insurance doesn't come through,
the full force of the fiasco will drag the dollar underwater
like the legendary Kraken of old preying on a babe thrown overboard.
Then the forces of darkness will really be loosed.
Things may get so chaotic
that Mr. Bush and his circle
may actually be Removed from the Scene
Before his term in office expires.
He could go out of office much the way he came in:
by means unconventional.
Mrs. Pelosi will keep the seat in the oval office
warm for a few months.
Then the Prosecutions will Begin.
____________________________________
My new novel of the post-oil future,
World Made By Hand, is available at all booksellers.
July 22, 2008 in
Commentary on Current Events | Permalink | Comments (332)
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