My Doom is Your Doom: A Scary Flight into the Depths of an Apocalyptic Vision

Are we heading towards this end?

I’ve had a strange feeling lately. Not one that is really describeable, per se, but one that given its affects on me, is not a good omen. I don’t see the world as we know it improving much at all.

Now, we can all attribute that opinion to the economic malaise and global chaos that runs amok like the children in Lord of the Flies. It seems that humanity – with all the gadgets and whatchamacallits – is still trudging along to a beat out of the Neolithic Age.

We’ve all heard the voodoo that is upon us: 2012, the Mayan End of Times doomsday scenario playing out at a theatre near you. I’m not a paint-my-face, genuflect-to-the-old-stones zealot on this point, but, I take my prophesies fairly seriously. (More of a Nostradamus fan.)

So, we have some bad juju swirling around. Cat 5 hurricanes, earthquakes, fires, climatic strangeness, genocide and economic reordering are just the wine list on your Airbus A380 flight to world catastrophe. (Enjoy!)

7 Billion of us currently fight for limited resources, crowd each other out, engage in warfare to gain those new footholds for water, for oil, for food even. International cooperation is a dish best served with a AK-47 pointing to your head. (Mixing it up here is good.)

But getting back to my feeling, the reason for all the hub bub in my heart is intimately tied to my own inabilities to right the titanic levels of anxiety hitting the icy cold waters of current reality. While I try to remain focused on the task at hand, I wonder, “will this matter a lick once the heavens (or depths) swallow me? Who the heck will survive it all? Does Oprah have a mountain getaway? (Would she take me on as a court jester?)”

Letting this sort of thoughts creep into your psyche is costly. (Couch costly, like $250 per 50-minute hour expensive.) But it serves notice on my conscious to do whatever I plan on complete before whatever doom-n-gloom besets us takes place.

Build that contraption. Learn how to play Eric Clapton’s ‘Cocaine’ on the guitar. Write that great book. Make a trip to Kathmandu. Ask out that supermodel lively around your corner. (Ok, I don’t have one of those handy, but hell, I dream.)

While its seems the Earth will end very soon – the Andromeda galaxy will to collide with the Milky Way, curtains close on humanity in this current form and location – we might as well do whatever our carbon-based life form can conceive in the present. Societal forces be damned. Trying to fix the problem: bullox that notion.

If we have only a short left, might as well do the Lord of the Flies wig out before we kick off. Or as William Golding put it, “Which is better–to have laws and agree, or to hunt and kill?” Seems we are all ready doing more of the latter than the former.

WaMu is shamu-ed: Another bank failure amid no way out

WaMu becomes the latest victim (or victimizer) in the credit crisis as it is bought out by JPMorganChase. The sale now makes JPMorganChase the 2nd largest bank until Bank of America completes its purchase of Merrill Lynch & Co, another large entity on the bands of this hurricane-strength credit meltdown.

With the inability to keep its cash, as exhibited by this quote:

Washington Mutual was shut by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. This followed $16.7 billion of deposit outflows at the Seattle-based thrift since Sept 15, the OTS said.

It is clear the market (and people) are spooked. As well they should be. The Perfect Storm of financial meltdown has brewed up the seas of Wall Street, Main Street and Washington to a lather not seen in 79 years.

On Capitol Hill, the fury of this storm has generated more emotion than was supposed to happen. As this quote from Yahoo! reports:

Financial Services Chairman Barney Frank, the feisty Democrat who has been leading negotiations with Paulson, reacted angrily, saying Republicans had waited until the last moment to present their proposal.

McCain, who dramatically announced Wednesday that he was suspending his campaign to deal with the economic crisis, stayed silent for most of the session and spoke only briefly to voice general principles for a rescue plan.

After the session, Paulson, hoping to prevent any chance for agreement from being torpedoed, pleaded with Democratic leaders not to publicly disclose how poorly the session had gone, said three people familiar with the episode. Frank and House Speaker Nancy Pelosi responded angrily, and Paulson, in an attempt to lighten the mood, got down on one knee, said the sources who spoke on condition of anonymity, like the others, because the conversations were private.

Weary congressional negotiators then resumed working with Paulson into the night in an effort to revive or rework the proposal that Bush said must be quickly approved by Congress to stave off “a long and painful recession.” They gave up after 10 p.m. EDT, more than an hour after the lone House Republican involved, Rep. Spencer Bachus of Alabama, left the room.

The partisan reality of this crisis is this: Republicans, who consider bailouts taboo, are in the wrong. I hate to side with bailing out greedy, immoral Wall Street investment bankers and their 2nd class ilk, but without a market that functions, this baby is going to reach irrepairable levels.

Great Depression. No Jobs. No investment. No loans without ample capital upfront. Industrial might lost. Technology lags.

And chaos that comes from financial calamities. Crime. People acting irrational that once were rational and decent people. Emotional depressions. Suicides. And resentment toward anyone with a buck.

Additionally, we are seeing big banks getting bigger. No competition. A sign of omens to come?

So while CEOs lie, such as Dick Fuld of Lehman Brothers in this interview from June 2008 by the Financial Times:

 “Do we have some stuff on the books that would be tough to get rid of? Yes,” he [Fuld] said, referring to commercial and residential mortgage assets. “Am I worried about it? No. If you have some repricing of these things will we lose some money? Yes. Is it going to kill us? Of course not.”

Lehman is a dead bank walking, say its critics who argue the reason it has not yet suffered the same fate as Bear Stearns is the emergency facility that allows it to borrow from the US Federal Reserve. “Lehman is propped up now by the US taxpayer and nothing else,” said one financial services industry chief executive. “When the Fed window goes away, so does Lehman.”

That is why the CEOs, CFOs, CIOs and key employees of any major financial concern should be asked to come to Washington, or New York, and required to sit in a large conference room and straighten this all out. Communications via overseas is a necessity; and these jokers have to figure out what can be done to fix mortgages (within the framework of United States) and to get these markets working. If it takes 2 weeks, it takes 2 weeks and 100s of hours per man, so be it.

Time is nearly gone. This Hurricane is only hours (read: days) from landfall. And it will take this country down, and nearly the entire world, with it as this quote shows the fear of other nations:

Still, officials from France to China voiced alarm.

 

“A crisis of confidence without precedent is shaking the global economy,” French President Nicolas Sarkozy said in a speech in Toulon, France.

 

As Thursday’s meeting began, Bush warned, “We’re in a serious economic crisis in the country if we don’t pass a piece of legislation.”

So, it is incumbent on the party in power to realize the clock is nearly out and you don’t have a Plan B. At least not one that works.

Note: I have been following this story for nearly a year. Books that might be of help:

• Bad Money – Kevin Phillips
• Trillion Dollar Meltdown – Charles R. Morris
• Chain of Blame -Mathew Padilla, Paul Muolo
• Twilight in the Desert – Matthew R. Simmons
• The Dollar Crisis – Richard Duncan
• The New Paradigm for Financial Markets – George Soros

America, The Slothful: Professor Morton J Marcus thinks so

Sunday, I get to read an Economics column by Dr. Morton J. Marcus, formerly of Indiana University. He usually recaps the Indiana Economy with a fictional character asking about what is causing…whatever. This week, he detoured into never-never-oh-no-he-didn’t land. He blames Americans for the current malaise.  His article here and a telling quote below:

Ask yourself, “What can I do with the skills I have to make more money”? Stop seeing yourself as a victim of something beyond yourself. True; you probably don’t know all you need to know, but for today, that’s how it is. Right; you don’t have enough money to do what you think needs doing, but today you have time to do something more than you did yesterday.

While the enthusiastic words of motivational speakers will not transform your life, self-pity is a non-starter. The problem is no longer the politician, the boss, the union, the market, NAFTA or your DNA. The problem is you, your inaction and your indifference to your degenerative social disease: sloth.

I know you think you work hard. But you and I know that you and I waste enormous amounts of time. Some of us do it writing in a Colorado coffee house while others will turn this page and forget its message. 

My response:

7 Sins and Sloth: Economy = Marcus*Gramm*Gramm

 

Usually, I read your articles for an informative look at the Indiana Economy. However, this Sunday, I read with a certain amount of disdain and contempt. I’ll elaborate.

 

Never religious, but raised Catholic, I know the seven deadly sins are: pride, covetousness, lust, gluttony, envy, anger and sloth. (Gregory The Great, 6^th century.) Our maybe you know them as: luxuria, gula, avarita, acedia, ira, invidia and superbia.

 

It is quite dismaying to indict us, Average Joe American, of laziness and/or not utilizing our talents. Sure, we are using “our time” to less than optimal point of maximum production that would satisfy economic goals and objectives laid out by our taskmasters, the elite and the 1 percenters. Of our 168 hours per week, we likely spend 35-60 at work, 42-56 asleep, 4-10 preparing to and eating, 3.5-10 driving a car, 5-15 watching TV (possibly learning about our world), 1-10 reading, 5-21 attending to kids, 1-2 cleaning ourselves, 2-7 hours on house chores, 1-5 exercising (if we are lucky) and 1.5-2.5 in the bathroom. With this stated, anywhere from 101 to 198.5 hours would be need to complete those particular tasks. Reflecting, I hope to you, that a range exists. Free time is plentiful at the minimum, but what laziness exists, is to your point, a very individual concern. Many are not at all lazy.  And many do use their talents within the framework of our society.

 

A typical Average Joe American

 

As sentient and free beings, it has come to our knowledge that those at the top do not have our best interests at heart. Even more so when you look at the career prospects and attitudes, healthcare shell game, resource redistribution and intrusiveness of government into personal privacy that has meandered away from logical and understandable levels of societal necessity. But I will not argue on those points. (Because it would take too long. Like this diatribe. Read on.)

 

However, it would remissive of me to not indict those at the pinnacles of power, wealth, and alas, decision making, of their sins.

 

Pride. The 1980’s Wall Street boom lent us the phrase, “Masters of the Universe” as they were kings of all they surveyed. As Reagan’s monetarist/Friedman policies took hold, creating record deficit spending and trade imbalances, we have also seen an inordinate glorification of these hedge fund, corporate raider, CEO-stock boosters types. Business channels pound the message that these men can (or rarely) do no wrong in business. And once more, they know it, and act the part accordingly.

 

Meanwhile, the Average Joe witnesses the America’s infrastructure dilapidate (while other countries revitalize), manufacturing GDP slip far behind the financial sector’s GDP – meaning his “future” job requires nearly an MBA-like education – and his “old job” is in “Chindia” with a worker making 1/10 or 1/15 of his “old salary.”  Universities create “specialists” in overabundance, pumping up the careers choices of financial, legal and health concerns over engineering and science. (And those that get into those lesser careers are foreigners or US kids going abroad.)

 

Our nation moves wealth upward via tax incentives and breaks that have been in place since “compassionate conservatives” took the mantle of power. (With “liberals” too scared, or too well compensated, to rock the boat with an election hatchet hanging over their heads.)

 

Lobbyists now run the congressional dog and pony show. Businesses of extreme power, oil for certain, get their ideas approved or heard – “drill more!” – while any alternatives, not moneyed properly, go silent.

 

We are enlightened that our malaise is of our own doing. That our country needs to get right with the Lord and leave behind destructive behaviors while our leaders consistently find themselves in legal hot water, often times, politically motivated in the charges. (And thus adds more delay and gridlock on actually addressing any problem, if leadership is so inclined.)

 

That we can find better opportunities, just look for them and get educated, but in the midst of the deck shuffling of our lives, the game is changed from pinochle to hearts, and the objective escapes us: a secure retirement. We leverage ourselves silly, driving our total credit market debt, public and private, to 44 trillion dollars. (Kevin Phillips: Bad Money, Richard Duncan: The Dollar Crisis.)

 

A dollar buys less daily. Our tax dollars buy even less when we pay more into the broken system. The private sector is lauded, while the public sector is besmirched. (But when Enron, Tyco, Worldcom, Countrywide, Bear Stearnes or IndyMac go under, we, the taxpayer, the pension holder, the employee are left holding the bag while corporate execs and major stockholders got out just in the “nick of time.”) We are bombarded with these images of 7-8-9-10 figure people living the good life. Told it is just a matter of will and want. (But never told it might be a product of happenstance and luck, immorality and illegality, and smoke and mirrors.)

 

And we grow to “envy” of their “gluttonous” behaviors. We “lust” for the good life – as do the millionaires cum billionaires. Our “anger” soon ensues over their “elite” thinking and their “prideful” stances via us, the little guy.

 

But all their “pride” and the media’s fawning over these stock market gurus, their ever-increasing portfolios, their freedom to merge against anti-trust legality, and their ability to move more “Average Joes (think: Hoes)” into the market (with no regard for their losses), belies a truth: that their game inevitably reeks havoc on our economy.

 

It’s a paper chase, not a tangible, fungible asset that can produce a real good, technology or value-added service. Moving funds around may create a strip mall or two, an occasional road or financial service building, but those are in over abundance all ready, and have been discarded, or ignored time and again. This “exotic” fund management has become a mantra to follow on Wall Street, but eventually, the house of cards comes tumbling down onto the backs of lowly American citizens on Main Street.

 

Meanwhile, as banks pumped liquidity into the market, often to people with credit burdens greater than any income potential to pay them down, we are spreading a contagion beyond the ability to cure the disease. And this time I am afraid, the rebound will not be quite as easy.  The disease has infested too far.

 

But our sin is not sloth, sir.

 

Covetousness (or Envy) is our real sin.

 

The desire of another’s wealth, whether we are $1,000,000/year hedge fund associate looking to be a $50,000,000 hedge fund manager or a $50,000/year single dad looking to be a $125,000 plant manager. But tied to the greed, it has driven those at the top rungs to expect more, desire more (while paying less taxes), look down their nose at the plebeians, and turn us green with such envy.

 

Since we don’t have intimate contact with such “Masters” we in turn take our disdain elsewhere, to our bosses or our neighbors. “Keeping up with Joneses” has become a higher stakes affair.

 

But when a stock trader in France name Jerome can generate a $7 billion loss in a year, it will take 140,000 Americans at $50,000/yr that entire year to make up for his mistake.

 

When we spend $3 Billion a week in Iraq, it takes 60,000 Americans to make that. Over a U.S. fiscal year, 3,120,000 Americans will work that off.

 

When we put 2,300,000 people behind bars, we lose their productivity, and in some instances, creativity. Meanwhile, once they are released, their abilities are resided to low-end, dead-end and no-end opportunities. And we wonder why they go back in droves of 80% recidivism. Meanwhile, we educate people in droves to prosecute, monitor and enforce backward, archaic and racially-punitive laws in the hopes of maintaining order that isn’t so orderly.

 

Capital expenditures on prisons, staffing and other assisting programs for incarceration, not education, increased significantly under the conservative regime. In the 1990’s alone, 292 large facilities (1,000 prisoners or more) were built to keep up with the prison boom. In the 1980’s, 314 facilities of various sizes were built to house the conservatives influx of drug abusers, sexual deviants and violent offenders. (Statistical Abstract of the United States, 2006, Table 336)

 

These new large warehouse style prisons ultra-conservatively cost $33.1 billion to construct and $4-6 billion annually to run in 2000 US Dollars. (Assumed $25,000 per staff member and 100 million for facilities under 2,500, 200 million for 2,500 or more inmates. Each assumption is an underestimation.) Older facilities cost an addition $6.5-8.5 Billion to staff, leaving aside food, clothing, electricity, security needs and other costs associated with these monsters. Assuming $30-45,000 per inmate cost, total cost is $60-90 Billion per year for all the needs to house these persons.

 

Another 1,800,000 Americans working solely for prison upkeep.

 

As the cost of college races toward a 1,200 sq. ft. starter home, we must acknowledge our flaws in educating and preparing for a 21^st century. (That means you, sir.) That their prospects are not as good as their dad’s, or more likely, their grandpop’s. They will not enjoy Social Security. They will have to live longer, work longer and watch as America sees China become the next superpower, or likely, engage in a WWIII.

 

That fiscal irresponsibility, lack investment in the future and pumping up a stock market are now coming home to roost. Whatever our laziness or incapacity to use talent is, it will not surpass the greed and envy aspects prior to the 2^nd Great Depression about to take hold.

 

But I also might be apart of “A Nation of Whiners.”

 

Lastly, I just hope you are intellectually honest enough to admit it when it comes.