When I read recent remarks on financial policy by top Obama administration officials, I feel as if I’ve entered a time warp — as if it’s still 2005, Alan Greenspan is still the Maestro, and bankers are still heroes of capitalism.
“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” says Timothy Geithner, the Treasury secretary — as he prepares to put taxpayers on the hook for that system’s immense losses.
Meanwhile, a Washington Post report based on administration sources says that Mr. Geithner and Lawrence Summers, President Obama’s top economic adviser, “think governments make poor bank managers” — as opposed, presumably, to the private-sector geniuses who managed to lose more than a trillion dollars in the space of a few years.
But I must quote myself from my October 30 2008 post, all the money in the world. Since that post has proven to be totally correct. I'd brag about being a prophet, except millions and millions of poor people just like me saw the same thing. You had to be an economist to believe the bullshit:
"As I said in my vulture of doom post about the bailout, there is not enough money in all the world to successfully bail out the system. The managers of the great Popping sound (the sound of 100,000 hedge funder penises exploding all at once) have established a nice rhythm for the deathfuck: they come up with a solution and for a month, a relative calm prevails, and then another shoe drops. From last week to this week, the new idea is that the worst is behind us. So the markets go happily upward. But do we have any reason whatsoever to think that counterparties are now protected from the almost sure consequence of housing prices dipping another ten percent? I don’t think so. The write downs have been so many stabs in the dark. Meanwhile, every developed nation has put its government money on the line – a unique event! – to stop the oncoming tide of losing bets. All the money in the world, in other words, is on the line, because more than all the money in the world has been bet. Eventually, many of those bets will simply have to be canceled. Sorry charlie! And as the players don't even know they made the bets - charming megachurch x in San Diego, the school system in Xville, Minnesota, the Icelandic Tuna Fisherman's pension fund, and so on - this will not be happy. As every fan of cheap sadomasochistic entertainment knows, surrender is a long process, but game by game one gets to that final, liquid moment of mutual pain and cumming. It isn’t Wall Street, among the cheesy films of the eighties, that describes the current situation. It is 9 ½ weeks."