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Mr Paulson this weekend, after a huddle with the honchos of the G7, led by Gordon Brown, until this moment hapless new PM of the UK, now hero of the alleged rescue plan for the foundering economies of the industrialized countries.  Paulson’s happy, having been hoisted off his own petard, a new advocate of Euro-style socialism, quite a leap for this happy Wall Street capitalist who, until his own system was about to go down the toilet, would have seen government take-overs of banks as a very pink, or even red (in the old usage) thing.  Wall Street and the other markets responded joyously, leaping up record levels – the DOW went up in the biggest jump since the 30’s (is this a good sign?) and other markets followed suit, recovering much of last week’s losses in a single faith-filled day.

So what is really happening?  The various governments have in unison decided to rev up their printing presses and throw public money into the black-hole of debt generated by the private sector’s greed, i.e., for example, Mr Paulson’s greed.  Just how this is done remains to be seen, but money is being churned out at levels previously unimagined, and for the questionable motive of keeping those who produced this problem afloat, so they can grease the economy with money of ever more dubious provenance.  Somewhat the walnut shells are being shuffled real fast, in an effort to show that not one of them has anything under it.  So who will gain with this?  The banks in their various modes, for sure.  The politicians who will stave off economic collapse a little longer.  And perhaps in an illusionary respite, JQ Public, not having to face just yet a full-fledged depression.  So governments will become part holders of depleted banks, perhaps jiggling the pay figures for CEO’s, and banishing for the moment golden parachutes and other practices of the suddenly finished Golden Age.  But somewhere that debt remains, nagging away, eating at the core of these economies.  Somebody is getting burned.  But as usual, it ain’t (yet) the guys at the top.  Instead its the ones at the bottom, with no job, no pension, no insurance, no nada.    So after all the “shock and awe” of the last weeks’ financial news, the U-turns of dyed-in-the-wool-uber-capitalists turning into bleating lambs of socialism, the wild roller-coaster of the stock markets, the bottom line is they’ve forestalled the day of reckoning by printing up bazillions of bucks and tossing it at the monster debt incurred by, well, ordinary human shit-headed greed and selfishness let loose in an unregulated Market Economy Paradise.  But worry not, the bill is coming, and no matter how much these guys try to dodge the bullet, it has their name written all over it.

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3 Comments

  1. Way back when some teacher or other tried to instruct us on Mr Newton’s first law of thermodynamics, that such a system can store or hold energy and that this internal energy is conserved, it cannot be created or destroyed.

    Mr Paulosn & Co. seemed to be wanting to create something from nothing, or money from debt. Kind of a reversal of that first law. No surprise, is it, that these naughty financial instruments which were used to cause this collapse were created by math-heads and physicists. More smoke and mirrors, Jost. Adam Smith’s invisible hand still working its crafty prestidigitation.

    That celestial laughter you’ve been hearing these past weeks is Karl Marx pissing himself.

  2. Nouriel Roubini is on Bloomberg tv, right now. He’s saying 250 billion ain’t enough to stimulate markets. He’s given us about five years to get our financial house in order or else…

    Remember that David Bowie song from the eighties, his ode to the apocalypse, Five Years?

  3. Pushing thru the market square, so many mothers sighing
    News had just come over, we had five years left to cry in
    News guy wept and told us, earth was really dying
    Cried so much his face was wet, then I knew he was not lying
    I heard telephones, opera house, favourite melodies
    I saw boys, toys electric irons and t.v.s
    My brain hurt like a warehouse, it had no room to spare
    I had to cram so many things to store everything in there
    And all the fat-skinny people, and all the tall-short people
    And all the nobody people, and all the somebody people
    I never thought Id need so many people

    A girl my age went off her head, hit some tiny children
    If the black hadnt a-pulled her off, I think she would have killed them
    A soldier with a broken arm, fixed his stare to the wheels of a cadillac
    A cop knelt and kissed the feet of a priest, and a queer threw up at the sight of that

    I think I saw you in an ice-cream parlour, drinking milk shakes cold and long
    Smiling and waving and looking so fine, dont think
    You knew you were in this song
    And it was cold and it rained so I felt like an actor
    And I thought of ma and I wanted to get back there
    Your face, your race, the way that you talk
    I kiss you, youre beautiful, I want you to walk

    Weve got five years, stuck on my eyes
    Five years, what a surprise
    Weve got five years, my brain hurts a lot
    Five years, thats all weve got
    Weve got five years, what a surprise
    Five years, stuck on my eyes
    Weve got five years, my brain hurts a lot
    Five years, thats all weve got
    Weve got five years, stuck on my eyes
    Five years, what a surprise
    Weve got five years, my brain hurts a lot
    Five years, thats all weve got
    Weve got five years, what a surprise
    Weve got five years, stuck on my eyes
    Weve got five years, my brain hurts a lot
    Five years, thats all weve got
    Five years
    Five years
    Five years
    Five years


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