Money Markets: Just Another Word For Gambling

I haven't had anything to say about the credit crisis in the US, which is affecting financial institutions around the world. And there's a good reason for that. I don't have the slightest idea what it's all about. But if you want an excellent primer on what's been happening for the last few months and the tumbling dominoes of the last few days, go here and for more analysis go here. Bottom line? It's all about gambling. High risk gambling. And government failure to regulate based on ideology.

But as a layman (not a Lehman, fortunately) I have something to say about this. As I understand it, this whole thing started to unravel as a result of what's called the "sub-prime mortgage crisis." It amounts to this: financial institutions were lending money to homebuyers at below prime interest rates. From the first moment I heard this, my reaction was: WTF???? How can you lend money for mortgages at below prime and make money? Obviously, I'm not the money market wiz some of these guys were, eh? But when it comes right down to it, I think these Wall St. wizards were running a sort of Ponzi scheme, a financial tower built on quicksand.

I believe it started with Bear Stearns. What the hell is a Bear Stearns, you ask? Damned if I know. I'm just a poor schmuck of a wayward pote. A brokerage firm I think. Used to live on Wall St. Well, the brokerage went broke. Hit a Bear market and suffered Stearns consequences. The Bear Stearns cupboard is bare. Barely there. The reaction around the board rooms was something like, "Whew! Glad it's not us! But after all, it's only one company..."

Enter Fannie Mae and Freddie Mac.

Fannie Mae and Freddie Mac? Who are they, you want to know? Not who. What. Mortgage companies basically.

Fannie Mae and Freddie Mac? Now, I know the US is the home of Disneyland and Ronald McJob, but what kinds of names are those for serious companies (formerly) worth billions of dollars and holding the fortunes of thousands of struggling homeowners in their greedy little paws?

Fannie Mae? That's the title of an old R&B song by Buster Brown. Later became a signature tune of Jaco Pastorius, who turned it into a bass solo tour de force. But the name of a giant mortgage company? Give me a break.

I looked up the lyrics to Fannie Mae, just to see whether there was any sort of divination to be had there. Something spooky happened. The first set of lyrics to come up were these:

Well I want somebody to tell me what's wrong with me
I want somebody to tell me what's wrong with me
Oh I ain't in any trouble and so much misery
Now Fannie Mae, baby won't you please come home
Fannie Mae ae ae, baby won't you please come home
Yeah I ain't been in debt baby since you been gone
I can hear your name a ringin on down the line
I can hear your name a ringin on down the line
I want to know pretty love how do I win my time

MUSICAL INTERLUDE

I no o o o for me, I no-o-o-o for me
Well I ain't been in trouble and so much misery

You will notice I put one line in boldface. What’s this about debt? I ain’t been in debt until I met you Fannie Mae? Huh! I bet there are a lot of former homeowners singin’ pretty much the same tune!

However, those are not the lyrics Buster Brown actually sang. The words he actually sings on the recording (perhaps a little hard to decipher) are: Now I ain’t been myself, girl, since you’ve been gone. Where did these words about debt come from? I dunno. (Some smartass fooling around on the song lyrics sites?)

Meanwhile, there’s also the first line of the song: Well I want somebody to tell me what's wrong with me…

I’ll tell you what’s wrong with you Fannie Mae! You didn’t take care of business and you abused the trust of your clients, that’s what!

So the Feds had to pony up to keep Fannie Mae and Freddie Mac’s asses afloat.

Then came Lehman Brothers. Investment bankers. It appears they invested mostly in their own bank accounts. 180 years or some such down the tubes. Greed, I tell you…

And now, the latest domino to fall…AIG. Agh! What’s that? I’ll tell you. Re-insurers. See, in the financial industry it ain’t enough to have insurance. You need insurance for the insurance. In this case, what was needed was insurance for the insurance for the insurance cuz the insurance for the insurance didn’t quite cut it. And AIG was “bought” by the US Federal Government for the bargain price of 85 billion dollars. Not because of a sudden ideological urge to nationalize the financial industry. No. It was necessary to save the shoddy capitalist free marketeers. M-I-C…K-E-Y…M-O-U-S-E marketeers.

Some people, like Rosa Brooks in the LA Times, while satirizing the predicament of the US economy, have tossed out the “S” word – yes, the big bogeyman SOCIALISM. Never mind that she and others who do this simultaneously disseminate and perpetuate the delusion that government control of some institution equals socialism. (That could be the subject of a whole other post…which I’ll probably never get to…) In North America, at least, we have succumbed to the myth of the middle class. Except for the upper stratosphere, which in reality commands most of the wealth (an obscene proportion of it…) and the really destitute homeless pariahs of society, everybody supposes themselves to be a member of the middle class. Well, I have breaking news…

Yo! Bubba! I don’t care what your wages are. I don’t care if you’re on salary. Maybe you’re driving a Hummer and you got a nice little hot tub out there on the deck. I don’t care. If yer workin’ for the man you ain’t middle class. Yer working class and you oughtta wake up to that fact.

Meanwhile, just because a government assumes control of some major industry, or a portion of it, that doesn’t mean it’s suddenly become socialist. In fact, the whole purpose of all these bailouts and the hundreds of billions of dollars being poured into these failing companies is to bolster the twisted underpinnings of post-modern capitalism. There’s nothing socialist about it at all. You could say the government is desperately trying to find a way to help someone continue to make a profit out of this whole mess. And be assured that someone will profit. Here’s another phrase, or paraphrase, that you’ll see if you look around: what the Feds are doing with these bailouts (which comes from tax money squeezed out of all those people who think they are middle class but who really are well-dressed working stiffs…not the gamblers who created the problem) is privatizing the benefits and socializing the risks. In other words, someone will profit (not the working stiffs), but if they don’t profit, the working stiffs will take the loss. As they already have.

Now, if you were to define socialism as a system of government in which the politicians really cared for and looked after the interests of the vast majority of the people, in ways that mattered to them (which does not include, in my books, massive subsidies to mismanaged giant corporations in the hopes that meaningful jobs will trickle down), required (on pain of permanent liquidation…) corporations to follow the environmental, health, safety, and financial, rules for the benefit of the people they employ…If you defined socialism as just that, nothing more (and really it is so much more) then I say, the US and Canaduh too and probably every other country in the world could stand a good dose of socialism!

This financial boondoggle would look good on its perpetrators, just what they deserve, if it were not for the fact that it’s not they who are really suffering. It’s the ordinary people, Joe and Jane Lunchbucket who really take the hit. When they lose their houses, they lose their life savings. Just ask the people in Slovenian Village in Cleveland.

And why? Because we’ve allowed our economy to be run and manipulated by speculators and gamblers. Really, the stock exchanges are nothing but tarted-up casinos where guys in suits lay bets on the price of virtually everything there is. And everything is for sale. Especially if you’re using Other People’s Money. OPM. You think drugs are the problem in the good old U.S. of A? No, it’s OPM and gambling and betting on the price of gas! That’s the addiction that’s killing the golden goose.

Look around you. The price of gas. Artificially boosted by stock market speculators. The housing boom. Obscenely boosted by manipulated mortgage rates, ie. sub-prime mortgages. Food prices going through the roof when supposedly our methods of farming and production are more efficient than any other time in the history of the world? What is wrong with this picture?

But just to return, at the end of this unconscionably long diatribe, to the subject of the bailouts and the mismanagers and CEOs who mismanaged themselves into a Federal bonanza…

If I were king of the world, my first move would be to seize the personal assets of all those guys, and I mean every last dime, and spread it around to the victims of their mismanagement. Maybe we’d save somebody’s house!

The State of the US Economy...

I've been reading Karl Marx lately, so the symbolism here is just too poignant for words.

This photo is part of a Photo Essay on the Republican National Convention, at Mother Jones.

Photos and text by Jonathan Stein.

Seals Cycling (Again)(and Again)

Hard to believe it's been a year since I posted about the annual seal hunt. And the picture of McPaulrus Cartnew and whassername? on the ice floe getting illegally close to a seal (which they're not planning to kill...)

Not much has changed since then. For the seals.

Sir McCrustcart Paulney, on the other hand, has had a whole year of divorce-type wrangling with whassername? Whassername? meanwhile has decided to Dance With the Stars cuz her settlement with aforementioned McWalrus doesn't allow her to live in the style to which she became accustomed, for example, jetting off to ice floes in March whenever it felt like March...

(I don't mean to be deliberately disrespectful of whassername? I really can't remember her name.)

(And let us not forget the ironies of an animal rights movement that wants to murder Knut the pampered polar bear but save the seals.) ??? (Not to wish anyone ill, it's not a good thing for Buddhists, but I hope Knut grows up big enough to bite one of them animal rights people on the nose, just to prove he's a real polar bear...)

Online Petition Re: Climate Change

I suppose I take a rather un-nuanced view of environment and global warming or climate change or whatever the heck it's called. There are a lot of people coming out of the woodwork these days to criticize David Suzuki and even my dark-horse saviour of the Democrats Al Gore. Junk science, they say. A bunch of bureaucrats pushing an agenda, they say. A con job, they say.

I don't really know. Here's what I know. It doesn't seem right that we can keep pulling shit out of the earth's bowels and then burning it and pouring it into the earth's lungs at the rate we've been doing, and expecting to increase this besides. Is man affecting the environment? Hell yes! So we probably need to be doing something about it.

Having said that, I get emails. Yes, Larry doesn't have much to do with online petitions. But he's pushed this group before. So one more time...

Dear friends,

Last week, Avaaz campaigners hand-delivered our 100,000-signature climate change petition to the environment ministers of the world's most polluting countries. It worked. The chair of the meeting waved the petition in the air, calling on his fellow ministers to act--and they agreed that climate change would be the #1 issue at the G8 summit in June.

The momentum is on our side. Let's build on it. Next Tuesday, another high-level group will meet to move forward with G8 planning -- and we can keep the focus on the climate issue by showing that the call for action is growing. Can you help us reach our ambitious goal of 150,000 signatures by Tuesday by forwarding this email to ten friends? Your friends can sign the petition here:

http://www.avaaz.org/en/climate_action_g8

Here's how our campaigner Iain Keith, who presented the petition, describes his experience:

When my turn came to speak to the Environment ministers, I was so nervous that I thought my voice would quiver. But I wasn't just speaking for myself--I was there on behalf of 100,000 Avaaz members, and I couldn't let them down. I walked to the microphone, took a deep breath, and said, "Dear Ministers, ladies and gentlemen, m y name is Iain Keith and I'm here on behalf of the 1 Million members of Avaaz. Avaaz is a new online community where global citizens can go to take action on the biggest issues facing our world. I have here, in my hands, a petition from our members who would like to tell you that they are scared of climate change, and the lack of action being taken. The countries represented in this room are responsible for the majority of global greenhouse gas emissions. As ministers of the environment you are in an excellent position to persuade your leaders to make tackling climate change the number one priority for the next G8 summit. Our members humbly request that you accept this petition as a reminder of your responsibilities, and to help persuade your leaders."

I handed the petition to the German environment minister, Sigmar Gabriel. The meeting continued, with speeches on other issues from other organizations. I wondered if all of the work had been worth it.

And then came Minister Gabriel's closing speech.

I could hardly believe it: he was saying that climate change must be the number one priority at the G8 summit. And he was holding our petition.

"Thanks to increased pressure from people around the world," he said, "the tide is turning. When an international NGO can gather this many signatures" (here he holds up the petition), "we cannot ignore this problem anymore... As Environmental ministers, we have a responsibility both to the environment and our voters to make sure our heads of state act!"

And a few days later, German Chancellor and G8 President Angela Merkel vowed to put climate change at the top of the agenda for the G8 Leaders Summit.

We did it!!

Iain's right. And we can do even more. Can you forward this email to ten friends, and help us reach our goal of 150,000 signatures by Tuesday?

http://www.avaaz.org/en/climate_action_g8

It's amazing what can happen when we work together. Thanks for all that you do.

With hope,

Ben, Iain, Ricken, Lee-Sean, Galit, Graziela, and the rest of the Avaaz team

P.S. For a more detailed report of the meeting, including photos, visit the Avaaz blog

Don't Bother Me, I'm Counting My Money

According to Forbes Magazine, the world now has 946 billionaires. According to Canadian Business, in 2005 Canada had 40. Sheesh, that's a lot of Lamborghinis!

Unfortunately, Forbes didn't count them, but I bet there are at least a billion 946aires in the world. So I've taken out my abacus to determine which category I fit into.

I'll let you know in a minute...

Update #2 on Gas Shortage

Just a quick update on the gas situation in Ontariario.

I heard in the last few days that the Esso refinery that suffered the fire is now back up to about 75% capacity. In other words, the supply of fuel to the province is gradually approaching more normal levels.

NB: the supply, the supply, the supply...

And of course this increase of supply came to its logical(?) conclusion yesterday when the price rose by about 4 cents/litre.

So much for the free market. Law of supply and demand. Competition? The only competition here is between anger and frustration.

Update on Gas Shortage

OK, it appears I was wrong, sort of, about a gas shortage. Some stations have actually closed down cuz they was outta gas. The Minister for Lack of Energy in Ontariario, Duncan Donut, says about 10% are experiencing a squeeze at any given time. His reaction to people driving about looking for a station with gas? So What!

"You have to put things in perspective," he says.

OK. Here's the perspective. Two events, a fire at a refinery and a simultaneous rail strike, have put the entire province into a furor, cost industry a lot of money, made people a little panicky, and incidentally cost the operators of those empty gas stations a good portion of their yearly income...

So what. Eh?

Do you think the Minister for Lack of Energy might deign to come up with a contingency plan for the future? After all, this was not a major catastrophe. Only a couple of events coinciding.

Premier Faulton McGuilty called it "the perfect storm," implying it was a sequence of events that was so unlikely it could never be repeated. Come on! If the province is vulnerable as a result of these two events, how would we survive a more concerted effort to disrupt supply?

Gee! Maybe it's time to introduce new and stiffer anti-terrorist laws, hold gas guzzlers in detention without counsel until they surrender their pipelines, and send them to a Middle East country where they might be tortured if they don't reveal the source of their gas...

Or we could examine the gas distribution system in the province and figure out how to make it more reliable. Which would be a job for Minister Duncan (So What) Donut. God help us.

Gas Causes Heartburn in Ontariario

Last week there was a fire at an Imperial oil refinery in Nanticoke. This, along with a strike by CN Rail conductors and engineers, has disrupted the distribution of gas in Ontariario. Today, the price of gas shot up to over 96 cents/litre in some places...Lunchbucket being one of them. Even tho the international price has generally fallen recently. In fact, it's about the same as it was a year ago, but the local price of gas is more like 16 cents/litre more.

Because one refinery in the province had a fire.

Now, admittedly, this refinery is responsible for a significant percentage of the provincial capacity. (Do I smell "putting all your eggs in one basket"?) But still, it's one refinery. One company.

Oddly enough, every company raised its prices. Supply and demand? The news today was all about a shortage...except for the reports that said maybe 75 stations out of Imperial's 450 were running short. Nobody else is running short. Why? Cuz there is no shortage.

How long will we tolerate oil company collusion?

There is, however, collusion, or my name ain't Larry Keiler. A local radio reporter spoke to an employee at a competing gas station and asked him why, since only one company's supply was affected, all the companies had raised their prices. This employee actually used these words: "Because we have to stay competitive." !!!!

Excuse me? Am I standing on my head? Since when does "competitive" mean you match your competitor's upward spiral? I thought competition meant that you might use a competitor's weakness to your advantage.

You see, the more this happens, the more I am convinced that we must find alternative and better ways to move ourselves around, if only to punish the companies that have grown obscenely rich by exploiting our need. Wouldn't we all feel so much better if we didn't need them anymore?

Some Talk About Money

HWSRN gets the union newspaper. He belongs to the union. Musicians union. The American Federation of Musicians. AFM. Affiliated with the AFL-CIO. They let the Canadians in too.

The paper is called International Musician. That's so you know they let the Canadians in too. Canada has its own vice-president. He has a moustache.

I've got three articles here from the Jan/07 issue of International Musician. (They're a little tiny, but if you click on them you get a larger version.) The first one that caught my eye was this one:

Check out that last paragraph. $7 a day! In the good old US of A! Does this not seem Third Worldish to you? Does it not conjure up images of shacks in the Ozarks and Dustbowl Okies? Can you not picture some wide-eyed little nappy-headed boy sitting in the corner of a dank verminous underground parking lot in the projects? Wondering whether he should spend that seven bucks on a Big Mac or smokes? And the population that's living on that is larger than Canada's whole body count!

I thank my lucky stars I'm not in that situation. But all I know is, I've been working harder (it seems) for about the same money for a couple of years now. And the same can not be said for the oil companies, to which I am such a generous contributor.

Just to the left of that article was this one:$200,000. That's a lotta money for horsehair. (Or whatever. I'm not too familiar with Cellos. I have more experience with Jello. Red is my favourite.) This goes to show that the world of classical music is still a big business with a lotta money floating around. And it also shows that branding holds sway even in the rare air of Symphonic Olympus. "It is the bow's provenance that is the most significant element of its sale..." not necessarily the qualities of its construction, or whether a modern-made bow might actually be better. (Everybody loves antiques.)

Finally, on the next page of the paper, to the right of the incomes article, was this:
What do you think of a company that controls $18 billion worth of communications? If all those $7 per day people had access to the supposedly public airwaves, I wonder what they would say.

I suppose I'm commenting, eh? But I'm really just making an observation. In this union newspaper we can go from abject poverty to spending a coupla hundred grand on a cello bow to billions on ways to influence the minds of the masses. And it's all happening in one little corner of the universe called USA. (Of course, they let in the Canadians too.)

Oh, and here's another benefit of union membership...Clipart!

Save a Life, Raise Your Insurance Rates

Here's an interesting, not so trivial factoid.

If you see this little guy here on the side of the road and he suddenly decides to jump out in front of you, the insurance companies in Ontario want you to hit him rather than swerve to avoid him and maybe end up in the ditch or hitting a tree.

Why? Because if you hit him, there's proof that an animal was involved in your collision. Therefore you're not at fault and your insurance rates won't rise. If you miss him, however, and hit a tree, you can't prove that there was a deer on the road. Therefore, it looks like and is treated as a single-car collision, and you (you compassionate, caring, deer-saver) are totally...100%...utterly...completely at fault.

(I hate to say it, but I can see the insurance companies' logic here. However, I'd still be doing my best to avoid hitting Bambi.)

(More Trivia: During mating season, early November, 65-70 deer are struck on the highways per day! Not sure if that's just Ontario, or all of Canada. Just Ontario I think.)