Friday, March 5, 2010
700 William
Thursday, March 4, 2010
It's Greek To Americans
I shocked my wife when I was able to translate place names on our road trip through the Balkans, driving in the Republica Srpska, a bastard pseudo-state in Bosnia-Herzegovina whose fascist leaders yearn to be part of the Cyrillic world of Serbia and Russia. Of course languages are alive and to be remembered they have to be used and nowadays I find my ability to remember the difference between a D and an L, or a YI and an N to be fading away...
Unhappily for all concerned there was no mechanism written into the new currency to allow for countries that essentially over borrowed and went belly up, which is what has happened in all but name in Greece. That was because the framers of the Union didn't think about secret deals that might be made between governments and bankers and Goldman Sach's deal with Greece, it turns out, was a doozie. After much reading I think I have figured out in plain terms what they did. Goldman Sachs lent enough money to Greece to allow the country to write off sufficient debt to allow it to meet the threshold for entry into the Euro-zone. The loan was masked as a currency trade and the Greek government used future income (!!) as collateral for the loan. Does this sound like a crazy mortgage as sold to "home owners" in the US? What makes this even worse is that it seems Goldman Sachs bought and sold Credit Default Swaps on this loan giving the bank an incentive to drive Greece into bankruptcy.
There has been much discussion in the US about the moral legitimacy of walking away from "underwater" home loans and in the ordinary course of things one can understand a certain moral repugnance at people who abandon loans that cover properties that have simply lost value. However it is really important to understand that the institutions that underwrote those loans weighed the odds against them. Not only did they happily make loans to people clearly not able to handle them, they then bet the loans would fail, by using Credit Default Swaps. They then cut up the loan packages, mixed them in with solid performing loans and sold them around the world as Grade A US loans backed by the burgeoning real estate market. In this way they made it extremely complex for people to renegotiate their loan terms as the paper was held by thousands of people and institutions around the world (literally!) and besides that they had no interest in getting these loans to conform or pay off! They wanted these fragmented investment papers to fail because their insurance- the Credit Default Swaps- then paid off and paid off big time. And even then the banks caught in the trap pleaded with the US government that promptly shoveled some twelve trillion dollars of YOUR DEBT to them to cover their losses. This is exactly what is happening with Greece. It profits Goldman Sachs if Greece implodes! Are you scared yet? It gets worse.
Strikes and protests are building in Greece with workers demanding to know (unlike American sheeple) why the bail out has to come on their backs, and their indignation is spreading across Europe as the realisation sinks in that bankers have duped their governments. The Greek Government has no answer to this fundamental question of human justice, the Germans don't want to know about Greece's problems and the European Central Bank has no mechanism to bail Greece out except to pay off it's debts. It's as though the US Federal Government were to pay off Illinois and California's debts knowing full well both states will go back down the path of overspending and racking up more debts. Besides there isn't any money left! From here on out the Fed has to print dollars because foreigners, seeing the coming crisis, have figured they better not buy any more American debt. China and Japan principally have cut back hugely on US sales of Treasuries.
To close out this excessively long and unpleasant essay let me say that I believe we are in the equivalent of 1931 of our own 21st century Great Depression. I have no idea what to do to prepare for whatever comes next, except to keep on keeping on. I don't believe there is any recovery coming soon and we are starting to hear publicly expressed doubts by people who usually are in the cheerleading section of mainstream news. There is no jobs program and health care reform will run up against God knows what economic crisis. Even if what happens in Greece looks Greek and alien to us, it might be worth while paying attention because the next phase of economic collapse may take the same shape here in the US and it would be nice if it didn't come as a surprise.
Our bankers have already baked the first layer of our cake with the housing collapse, unemployment was the next layer, and to top that we will soon see public employment attacked as parasitic and then the icing will be the failure of our currency. Just like them Greeks are seeing right now.
Beach Walk
Wednesday, March 3, 2010
Looters Galore
And so it is one has to wonder what the protocol is when civilization has broken down all around you and the normal transactions of daily living have ceased. I suppose everyone wanted to believe that Haiti would end up a cesspit of violence after their earthquake, and this picture from a survivalist blog would reinforce that prejudice:
Yet we hear from rescue services that despite the horror, people in Haiti have behaved with admirable fortitude, restraint and self reliance. I guess people will steal given the opportunity, God knows our bankers have managed a grand theft of historic proportions right under our noses. About that I could do nothing but protest. I hope that when disaster strikes my hurricane supplies will survive intact and I will be able to hold out relatively comfortably until help arrives. I would hate to be labeled a "looter" were I forced out to hunt and gather supplies after a disaster. Hawk Missiles
The towers and the buildings and the protective berms are still there as we shall see in a moment. Before we return to the present there was one other Hawk Missile picture from the Cuban missile crisis that I really like. It was featured in the Citizen newspaper a while back and I've never forgotten it. It shows three women and a baby walking past the missile batteries on Smathers Beach apparently unsupervised and without a care in the world. I wonder if these days with all the terrorist paranoia we will ever learn to trust each other again like this:
Tuesday, March 2, 2010
Governing By Myth
For instance Republicans have announced forcefully there is no need for health insurance reform, that everything is pretty much okay as it stands and the President's plans are going to bring Communism to our shores. It is obvious to any human being that our insurance system is a total rip-off designed to squeeze profits out of sickness, a technique that involves denying coverage, refusing to pay, forcing patients to struggle with mounds of paperwork to get what should be theirs by virtue of premiums paid. Yet when Democrats offer a reform people without insurance shout them down. I recall early on in the campaign a protester injured at an anti reform event had no insurance to cover the costs of the injury!
Consider the campaign of presidential candidate John Kerry, a decorated war veteran running on the Democrat ticket against President George Bush the Younger, a man who evaded military service by joining the Alabama National Guard and failed to report for duty there as required. yet Kerry's war record was wrecked and he lost horribly and the draft dodger (not forgetting the Vice President who famously advised he had "more important things to do" when asked why he was deferred five times) got re-elected by people who loudly proclaim their loyalty to the military and to some brand of patriotism known only to them.
Consider the budget deficit, run up to astronomical heights by a consistent policy of cutting taxes and increasing spending. This craziness took off under President Reagan and has continued to this day. When it is pointed out to conservatives that President Clinton left office with a budget surplus, this achievement, unique is decades of governance, is simply shrugged off. And those famously loud crass "patriots" bay for the blood of socialist "democrats." Do we recall how the right wing nutters warned us ominously of President Obama's plans to take away people's guns? These are the "patriots" who cheered President Bush on as he claimed the right of the President to be above the law, to allow any surveillance of US citizens, to permit torture and to hold suspects indefinitely without trial or even access to lawyers? we still have our guns but our civil liberties are more eroded than ever.
I wish I understood why Democrats can't confront these Republican myths and put them where they deserve to be, out of sight under some moldy militia rock somewhere. But there again, expecting Democrats in leadership positions to stand up for anything to anyone is asking a bit too much. Perhaps I should join the tea baggers and demand to see a Presidential birth certificate. that would show those Dems!


