Stop Digging

Or ... It's The Debt, Stupid!

When you're in a hole, stop digging!
- Old American proverb.

Don't shit where you eat!
- Another old American proverb.

Thanks to the extraordinary success of American capitalism and the American entertainment industry, I can, like millions of other people on the planet, place my hand on my heart and say Ich bin ein New Yorker! Yes, we all are these days. America gave us Coca-cola, Marylin Monroe and the Trickle Down Economy, which doesn't really. They also gave us Hollywood and folk wisdom like the aphorisms above, which one might expect to trickle up, but they don't really.

So as expected, it seems that the US congress have rolled over and done their patriotic duty. Despite the promise of 700 billion dollars however, stock market investors, in a display of what could only be described as churlish ingratitude, have to date, failed to reciprocate. The market remains flaccid, limp, soggy, sagging, deflating, wilting, slumping and sulking in a desultory non-bullish meltdown!

Since the Secretary of the Treasury, Henry Paulson, was formerly a Chief Operating Officer of Goldman Sachs, it is only natural that he would want to look after his buddies. Certainly he and Bernanke can appreciate the stresses and hardships that Wall Street bankers and CEOs must endure in these difficult times, poised on the ledges of high precipices, burdened down with all those large, ungainly, heavy sacks of money. They will obviously need some robust, heavy-duty parachutes to slow their descent as they plummet towards the concrete pavements below.

Paulson, Bernanke, Bush et al have accepted the need to cap the (tax-payer funded) payouts. They realise they must do this, because some of the American people, consumed with envy and resentment, may not understand the need to insure that these prominent citizens have a "soft landing" on those hard New York streets hundreds of stories beneath them. And so they have (reluctantly) agreed to trim a little bit around the edge of those golden parachutes that they have been busily weaving at the Treasury. Not that they have much golden thread left in the Treasury. Such is the shortage of golden thread that some of the parachutes may have to be made out of paper!

In Europe, cold, heartless Europe, they say they will not be doing any of this! There is even talk of penalising CEOs of banks and/or financial institutes that fail. I have to say dear reader, that I wept when I heard this. I wept with compassion for those unfortunate bankers trapped in cruel, callous Europe. I must have used up at least half a box of Kleenex, wiping my leaking eyes as I wept, and contemplated the fate of those poor bankers in cruel but fair Europe!

However, as it turns out, some of the tough talk from Europe may be just talk. Without a strong central authority and some means of backing up the the tough talk with action, the International finance sector may be able to pick the nations of Europe off one by one. Already Germany has caved in and this may be the start of a collapse in Europe's resolve. Expect more bailouts!.

It seems that the Credit Crunch could have been more correctly called a Debt Crunch. However, in accounting, one person's debt is always another person's credit And credit sounds like a much nicer word, doesn't it?

But on a more serious note, dear reader, I must admit that since this crisis began I have gathered metaphors from many places and mixed them into a colourful cocktail. However the sheer scale of the incompetence of the government sponsored bailout almost leaves me lost for metaphors.

Almost but not quite. This exercise would have been the ultimate in pulling oneself up by ones own boot-laces. Like trying to put out a fire by hosing it with kerosene. One of the questions I have asked my self is did the Bush turkeys really believe they could buy up their own debt or are they just going to drain all of the blood from the soon to be lifeless corpse of the American economy like a gang of vampires? In other words are they mad or bad?

Of course even the hint that the US government was contemplating spending trillions of dollars on preventing the stock market going down, was almost guaranteeing that the market would go down like a lead zeppelin. Such is the perverse herd like and irrational nature of markets. Especially if the bailout was hastily conceived and carried out in a half-baked inconsistent manner, as this one obviously is. Such a fiasco would only add to the panic! And surely, given their pedigree, the Bush turkeys would realise this? I've come to the conclusion that my question doesn't really matter. Because stupidity on this scale is evil. On the other hand, greed and fraud of this magnitude is just well, stupid!

Most serious of all is that many economists are now saying that America has been experiencing a Technical Recession for the last couple of quarters. Now you might wonder dear reader, just what a Technical Recession is? Well, it is a period in economic history that would be considered as an official recession if it weren't for the bullshit figures that certain gatekeepers cooked up to hide the fact that it was a recession. In other words if you subtract the amount that people borrowed in order to show some economic "growth", the net result is that the USA has been going backwards. Currently most of the world is experiencing a Technical Recession, and no doubt for the next decade or so we will experience a Technical Depression until it gets sorted out.

But as I keep saying this is all small beer compared to the Global Warming Elephant, which I keep promising I will blog about. It's just that I can laugh about the Depression Elephant, as I can find some grim elements of graveyard humour in the situation. The Global Warming Elephant, on the other hand is distinctly unfunny.

And on that note, I will leave you dear reader ... One moment, something is coming in just now. Yes, yes, we are to proceed immediately to the lifeboats! Women and children first! What's that? Sorry dear reader countermand that last instruction. It seems that the lifeboats were smashed up and burned in the boilers five years ago. Better put on your life jackets. And sorry what was that? No sorry dear reader, it seems the life jackets where shredded to make parachutes for the occupants of the top deck. Sorry captain, what did you say? Deck chairs? Deck chairs!?

Please excuse me dear reader, it seems I have to go and re-arrange some deck chairs ...