It's A CRASH!!!
Baudrillard: "Globalisation is the globalisation of technologies, markets, tourism, information; universality is the universality of values, human rights, freedoms, culture, democracy. Globalisation seems irreversible; the universal might be said, rather, to be on its way out."
The FTSE is currently -450 on the day, while the DOW has just opened nearly 800 points down. There will be a psychological overshoot and a rebound but the government packages are being discarded as too late to save the system from the free market's rampant non-sustainability.
The FTSE has now lost 42% of its value from its all-time high.
This is much more than the 20% that is one of the markers of a recession.
Its a Depression.
In this post we focus on four aspects of the biggest financial crisis in 80 years.
Firstly, we examine the machinations of Hank Paulson.
Secondly, we look at the feedback loops that undermined the rescue package.
Thirdly, we assess the current state of play.
And, fourthly, we look to a rather different financial and political landscape in the future.
We have posted previously about the peculiarly positive correlation between #### #########################################################################
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Five investment banks became just two, and then these were restructured as retail banks with an investment banking wing.
A more thorough way to wipe out the opposition is unlikely to be found.
This gross manipulation of an industry sector triggered the Depression. Paulson caused the 2008 Crash by his destruction of leading investment bank, Lehmann Brothers.
As The Economist said: "After the bankruptcy of Lehmann Brothers last month, amid confusion about who the state would save and on what terms, they [market participants] panicked."
Paulson spooked the markets.
No investor worth their salt will undertake any strategy that might be undone by Paulson's market manipulations.
In addition to the disappearance of the Big 5 investment banks, Paulson's outrageous ban on short-selling (a legitimised corruption of a true market price) is undermining the business models of the hedge fund sector, that depends on high liquidity shorting for their competitive advantage.
Meanwhile, private equity firms are conspicuous by the eerie silence, and whole nations are being declared bankrupt.
Hank Paulson's initial proposal for Congress was 3 pages long.
And, it didn't mention the housing crisis, but merely the banking one.
3 pages for the biggest ever transfer of cash from the government ie the people (allegedly) to the private sector?
THREE PAGES - unemployment benefit applications are twice as long as that!
Of course, Congress added just a little smallprint and the final signed deal came out at 450 pages long.
Paulson, understandably, wished for a #################################
He didn't get what he desired.
The Economist, again: "...the point of bailouts is to socialise losses that are clogging the financial system. If taxpayers are completely insulated from the losses, the bailout will probably be ineffective."
The markets reacted negatively, just as they had when Paulson had bailed out AIG, the day after letting Lehmann Brothers disappear.
So even this incredibly short-term strategy utterly failed to assure the markets.
For those analysts who possess the ability to create scenario analyses of the future markets eruptions, the system is totally destroyed.
Quoting the Seeking Alpha Financial website: "Government manipulation can never prevent financial Armageddon. In fact, intervention and manipulation in the free markets eventually guarantees financial Armageddon. Armageddon was not prevented, but only delayed, and at the taxpayer's expense."
It is our assessment that Mr Paulson has a few outstanding issues with regard to his psychological well-being - ##############################################
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Paulson, after his Ivy League education, became a formidable college footballer (American football, that is).
He was renowned for his violence on the field of play.
His nickname was "The Hammer".
So, he's a 6 foot 1 inch thug.
When he joined Goldman Sachs, he was promoted rapidly up the company, mainly at the instigation of Jon Corzine. At a suitable elevation, Paulson maliciously back-stabbed Corzine and grabbed the top job at Goldman for himself.
So, he possesses no moral compass.
When the Strange Idiot Child from Texas brought in Paulson to save the financial world from itself, Paulson insisted on bringing a team from Goldman Sachs to work on his project. Goldman Sachs have effectively been able to have their hands on the levers of power, resulting in a government strategy that heavily promotes the interests of Goldman Sachs.
So, he abuses everybody else's realities for proprietary gain.
A standard case study of such an individual is presented below (adapted from Personality Disorders in Modern Life by T. Millon and R. Davis).
"He (most PPDs are male) thinks that life hasn't given him his fair due. He believes that he has been deprived on the required amount of love and support and material reward and that others have received more than their share. Jealous of others, he is driven by an envious drive for retribution. Through deceit or destruction, his goal is to compensate for the emptiness in his life. Seething with anger, his greatest pleasure is to take control of the properties and possessions of others. Many possess an enormous desire for revenge manipulating others like pawns in a power game. He remains insecure about his power and status. He makes ostentatious and wasteful displays of materialism and conspicuous consumption as a means of exhibiting their power to others. He has little compassion or guilt for the outcomes of their behaviour. He will never be happy. He is fearless under threat. He is unable to gauge his own fear and ploughs ahead violently regardless of risk. He finds life clinically boring and needs sensations of excitement to feel alive. He is aggressive, oppositional and opportunistic".
On January 3rd 2007, we produced a post entitled "Psychopathic Personality Disorder - A Paradigm", the above quote was taken from that post.
We continued on.
"... the whole structure of the trading system is psychopathic. Monopolistic abuse is sought out as a business strategy. Manipulation and corruption are seen as competitive advantages. Cartelisation is creative networking at a corporate level. The markets are manipulated in a variety of simple and complex ways that allow advantageous trading conditions for insiders and market operators. The markets are not transparent and disinformation is rife. Insider trading is accommodated and, indeed, encouraged. The accounting and legal systems are swiss-cheesed with loopholes. Institutions, governments and regulatory bodies are co-opted into the power structures. The psychopathic operators seek control of their environment - they deal with absolutes and not probabilities. The less level the playing field, the better.
In the current global investment climate, individuals with PPDs have the ideal credentials to succeed in a system that is designed with a prime purpose of helping them to succeed. Due to globalisation, the prize for the psychopathic man is greater than at any time in history. The downside for the rest of the planet is that these psychopathic individuals are making psychopathic decisions that effect all of us in all areas of our life in a manner not seen before in history. Their thinking is short-termist (as defined by their condition) and their desire for instant gratification is one of the key problems underpinning climate change, for example."
Enterprising Americans are learning how to deal with Mr Paulson.
For example, the people at buymyshitpile.com are offering Hank all their unwanted items. You can even have your shitpile delivered to the psycho's office!
Excellent.
And the ravages of this Crash are only just beginning.
We could list scores of reason's why, for instance, Britain is in extreme risk, but we'll settle for just a few components that have not yet had anything like their full negative impact on the markets.
* 20% of British mortgages are #############################################
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House prices have a long way to fall yet. We would estimate that a further 30% will remove that particular fallacy of hyperreal wealth creation.
* Credit derivatives are an unknown and colossal risk somewhere in the system - the Monster from the Deep.
* The scaling back of shareholder capitalism via regulation, the impacts of the Depression, a prolonged consumer-led lack of consumerism and the not-yet-factored-in Real dynamics of climate change is hardly conducive to one taking any interest in a free market system. Cancerous economic growth will be trimmed, a number one all over...
* People are not willing to pay for this, even more so as they are watching their money being flushed away needlessly and without effect. The Left is going to gain massively from this Crash. The Economist uses the mistake of hindsight to judge that, say, across Europe, the right has been in the ascendancy in recent elections.
But that was before The Crash.
Witness the breakpoint in the US Presidential election once the Crash began. Obama and Oven-Chip were neck and neck on the prediction markets at 50/50.
The price is now 80 Obama, 20 Oven-Chip.
Hank Paulson has ensured that the US will be getting their first ever 'Black' president.
It is a pity that Obama's economic team is full of free market economists from the same Chicago school that spawned both this current economic crisis and that other psychopath, Milton Friedman.
Nasty little man...
British taxpayers may end up paying £13,000 per person to bail out the banking industry. This is the same industry that provided clients with dodgy pensions and investment advice in the late nineties, while trading the opposite way in their investment banking arms. For fuck's sake, these people charge you 50p just for going overdrawn.
And, when they go overdrawn, we give them trillions of pounds globally.
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And, as Baudrillard commented: "... because the initial problems were of the west's making, it is only fair that we should profit by them."
China is calling for a new non-US based currency system to prevent such financial tsunami's reoccuring.
But the crises of capitalism are recurrent.
Recessions are very common.
While Depressions can, by their very nature, happen only once per lifetime, as the people are not stupid enough to be hoodwinked a second time in the same manner by a bunch of psychopathic fraudsters.
Unfortunately, the blocked out parts of the posts and all posts labelled # are available in full to subscribers only.
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