[A-List] Fullblown Panic

[Bill Totten <shimogamo@xxxxxxxxxxxxx>]

Clusterfuck Nation

by Jim Kunstler

Comment on current events by the author of
The Long Emergency (Atlantic Monthly Press, 2005)

www.kunstler.com (January 21 2008)


Knees knocked last week from sea to shining sea as the shape-shifting
monster of economic reality cut a swathe of destruction through the
markets and financial ranks. The exact nature of this giant beast still
remained largely concealed in a fog of accounting gambits, policy
blusters, and reporting dodges, but a few intrepid scouts who glimpsed
the behemoth up close said it looked like Godzilla with Herbert Hoover's
face.

George W Bush, tried to appease the beast by offering each American
adult the dollar equivalent of half a month's mortgage payment - with
the exhortation to drive forthwith to the nearest WalMart and blow it on
salad shooters and plasma TV's - but Hooverzilla just laughed at the
offering and pounded the equity markets further into the dust of loss,
while the "bank-like" guardians of wealth lay in the drainage ditches
bleeding from their ears and eyes.

My favorite moment was seeing Treasury Secretary Paulson and one of his
fellow shaved-head deputies at a press conference rostrum frantically
trying to calm the news media rabble like a couple of extraplanetary
high priests from a Star Trek episode - the batteries having run down in
their laser wands, and their incantations ("liquidity! liquidity!)
veering into mystifying glossolalia.

I resort to such admitted extreme hyperbole because it may be the only
language that an infotainment- drunk society can still process in the
face of an epochal calamity that will transform the lush terms of
everyday life as we've known it into something like a bleak surrealist
landscape in the manner of Tanguy. That crashing sound out there is the
armature of confidence needed to support an economy based on faith that
borrowed money will be paid back. It's as simple as that. (Doesn't seem
so exciting now, does it?)

The United States is so broke, its people at every level from the
Federal Reserve on down don't know whether to shit or go blind. The
homeowners cringing in the media rooms of their 5000-square-foot
personal family resorts don't know how long they can stay put
microwaving pepperoni hot pockets with the default clock ticking. The
mortgage "servicers" don't know how they will persuade interested
parties like, say, the Illinois State Cafeteria Workers' Pension Fund
(holder of X-amount of mortgage-backed securities underwritten by, say,
Merrill Lynch or Deutsche Bank) to foreclose on properties scattered
everywhere from Key West to Bainbridge Island - or if there is actually
any legal mechanism known to man that would make it possible to "work
out" the sliced-and-diced collateral. The millions of maxed-out credit
card holders and the issuers of their plastic are stuck together
paddling a leaky tub in a sea of troubles every bit as wide, deep, and
polluted as the one the mortgage junkies and their enablers are sinking
in. The developers of malls, office parks, and power centers are weeping
into their filing cabinets as the harsh daylight of insolvency stops the
orgy of "consumption" and the retail tenants pack up their unsellable
goodies for the liquidators, and the rent checks stop arriving in the
mail, and the notes on this mall and that mall enter the eerie realm of
"non-performance". And, of course, there are the genius wonder boyz and
Wall Street playerz whose algorithms and turpitudes underwrote the
script of this horror show - for all I know they'll end up laughing into
sugary skull drinks on a beach in the Cayman Islands, or doing Chinese
fire drills in federal prison (or simply ass-fucked on the granite
countertops of their Tribecca aeries by mobs of angry, repossessed,
swindled former American dreamers pouring into Manhattan from the tract
house dormitories of New Jersey and Long Island).

There's a lot to be concerned about out there. I don't mean to be too
cute about it. But, as the master once said, nothing is funnier than
unhappiness.

A whole closet full of "other shoes" is now waiting to be dropped.
Surely the biggest clodhoppers in the closet belong to the hedge funds,
representing trillions and trillions of dollar-denominated "positions"
which, however hallucinatory, had previously yielded enough real "money"
year-by-year to keep all the realtors and Humvee dealers in the Hamptons
goose-stepping to Goldman Sachs's drumbeat. These "positions" can't help
now from moving into counterparty crisis territory, especially as the
bond insurers such as MBIA and Ambac go up in a vapor, and if that
happens the damage could be so colossal globally that Stephen Hawking
might have to be brought in to run the Federal Reserve.

This is going to be a rough week. Fastening your seat belts may not be
enough for this ride. Better superglue yourselves to the floorboards and
pray for God's mercy.

http://jameshowardkunstler.typepad.com/clusterfuck_nation/

http://www.billtotten.blogspot.com
http://www.ashisuto.co.jp