Sun Sets

Word this brisk fall morning comes of the immediate demise of the New York Sun, a right-wing rag which for the last eight years (imagine!) tried to fill that niche for brain-dead commentary on the city's newsstands between the N.Y. Post and the WSJ. Call it a crankier N.Y. Observer (which is saying something), a rich man's Village Voice. It had no point for being, other than the town was awash in cash and the owner thought he had something to say to the rest of us.

When I was in the city last month I saw a fresh pile of the Sun, which had a cover price of, I think, a dollar, left on a street corner in Chelsea. In the newspaper business (if you can still call it a business) this is called Not a Good Sign.

My eight long-time readers will I hope recall that as part of my outline of the Konservative Kollapse I said that once times got hard, as they inevitably would, a lot of these gasbag rightist think tanks, radio stations and publications would head for where the woodbine twineth.

The GOP, which has dodged consequences for so long that it became an article of faith among them, have now the serio/comic mien of Wile E. Coyote lifting his tiny umbrella as the mountainside he has knocked loose with his own hunger and stupidity drops towards his head. In the midst of their boo-hooing this week recollect if you will how they crowed for years whenever they got a sizable chuck of the Democratic delegation, those so-called Blue Dogs, to side with their voting majority. Yesterday though, they insisted the failure of the rescue package was the fault of 'dose very Dems.

Don't tell me we don't live in very rich times.

Going forward, we should see the events unfolding not just as a failure of one party, but one of a disgraced philosophical movement. And as the GOP goes to join the Whig and Free Soil parties, consider too how the current "center" will be the new right in the coming political landscape of our severely chastened republic.

Okay, Mets Fans

All of you know why this happened. (And anyone blaming Manuel should go follow another sport.) Frankly, I feel a relief it was not drawn out any longer. I think G. Vecsey says all that needs be said further.

Race Matters

From last night's Stan Greenberg snap poll (via kos):

These undecided voters had a strong positive reaction to Obama on a personal level. Before the debate, just 40 percent viewed Obama positively, but this skyrocketed to 69 percent after the debate – a remarkable 29-point gain that left him more personally popular than McCain despite this group’s conservative leanings.

My own intimate familiarity with a climate of prejudice has been mainly among my own people, second and third generation Italo-Americans. (Which is to say that I cannot speak to similar feelings among other established immigrant groups, or WASPs) I can state with confidence that there is an atmosphere of sturdy complaint against blacks in Italian American social culture, expressed most easily, of course, among themselves. (For, I think, very pronounced historical reasons dating back 1,200 years to the Saracen invasion of Sicily, but that is a topic for another time.)

BUT what astonishes me about my paisans is how nearly all of them, at some point in their lives, make individual exceptions to that climatic disdain when they talk about black friends, co-workers (or in some cases family members). It goes something like this: "You know, those molingana they're violent and lazy, they steal and are undependable. . . But Willie, HE's alright, he's good people. You can count on him. HE works hard, HE doesn't look for a hand out, he's got a sense of humor."

It's really very touching, for here we see how clannish individuals, and most people are clannish, can struggle against and overcome notions they cannot otherwise obviously reject. This is, of course, at the heart of the "I have black friends" canard, but a lot of people who say that really don't, while some really do.

This is just to say that, from the looks of it this morning, I think Barack Obama crossed that very important "HE's okay, HE's good people" line last night.

And really, it is impossible to expect the narrow-minded to accept an entire portion of the population they find threatening and different. But the world changes profoundly once an individual begins to make an exception to his own culture's prevailing, corrosive rules.

We live in a new world, and my take on McCain's reluctance to look at Obama last night is that he cannot bring himself to face the future.

The 400 Blows

Yesterday evening, Mr. Drum, reviewing Sarah Palin's latest bunny-in-the-headlights interview with Katie Couric, had this cri de coeur:

This campaign has gone seriously off the rails. I've never seen anything like it, but everyone is still nattering on as if this is business as usual.

Frankly, I thought John McCain had to be president first before he wrecked the country (further), but in his downward spiral, times being what they are, he's managed to knock the props out from under a financial plan, wait, hang that, a steady process towards a financial plan that, alas, was key to what might have been the last hope left for this country's financial autonomy.

Since we don't know for certain what exactly was scuttled, it is hard to say if the bailout deal was a good one or not. From the details which emerged Wednesday and Thursday, I think it passed the taste test--gamey, but not overpowering, and perhaps appealing to those with certain developed palates. Certainly it seemed a deal was in the offing.

And, frankly, I think that's all our financial overlords in China and the Gulf states were looking for right now, a signal that good-faith negotiations were progressing towards a timely placement of what could only be considered an interim solution. An assurance, if you will, that our nation's administrators took this crisis seriously.

And, to be fair, most of them did.

I think it can be safely inferred from events that Sen. McCain stiffened existing opposition to the plan. The White House Ghost did not help his own cause (of course) with his dreadful chain rattling th'other night, all fright and threats of doom, no confidence, no mastery, no control. Of course the dumb rump of House GOP saw that and their eyes lit with a holy fire, feeling for certain they could get a new tax break out of the crisis.

For a tax break is how they would encourage private enterprises to come in and buy the junk they don't want the govt. to own. Secy. Paulson said a measure like that won't work, probably because it puts reward too far down the road for such firms to leap in immediately, it opens just as wide a hole in the budget anyway, and sets up the possibility of bailing out those companies next year if, you known, things don't work out quite as planned.

Well, alackaday, Sen. InSane felt he could be of some help here, and it is worth noting that he has finally paid back our squalid president for South Carolina 2000. Took a while, and he's managed to hurt a lot of innocent people in the process, but he wasn't going to be president anyway, so why the fuck not?

I am trying to think of reasons why the market should not blow off 500 points today. (And it will be called the McCain Crash, one more material disaster, though by far the biggest, in a life remarkably punctuated with them.) Yesterday's economic news, lost in all the noise, was bad and pointed to worse to come. A domestic political catastrophe has invaded a very fragile policy process at the center of the capital market world and our overseas investors, now with little to gain and much to lose, are certain to signal their profound displeasure with the entire game.

What is unfolding really is a political disaster, but one, I submit, mainly played out in the GOP as its century-old coalition of Wall St. and Main St. comes apart in full view. Also rumbling underneath is a migration of the Republican libertarian wing away from whatever links it had to the Party of God. So long as Sarah Palin could be seen as a bright and energetic frontier avatar--untried but a quick study--I suspect the GOP moderates would have gone along with the rest of the package. But after the Coruic interview it's now clear to most of her new friends that Mrs. Alaska is as dumb as a bag of hammers.

NB: My rather opaque title today recognizes a small landmark here. After three-plus years, this is my 400th post. Yes, merely a week's output from the likes of Sully and Mattie, but, dammit, there are only so many hours in the day.

Down The Drain With John McCain 2

My long-time contention here has been that the GOP presidential candidate would poll only seven percentage points higher in total votes than wherever that squalid little man's popularity stood a month before the election. When Sen. InSane was nominated, I relented somewhat and gave him an extra two points in my intuited equation, for a total of nine above the president's base.

And so this morning comes word (via Kos) that FUX News' own poll, likely an outlier (but still), has just set Ol' John's number at 39% (Obama 45%), exactly nine points higher than the current standing of the White House ghost. (Note that this polling was completed before McCain shit the bed yesterday.)

I said in comments in the previous post, but I'll repeat for those only breezing through today, that I suspect McCain's dumb stunt will send a good number of the undecided towards Obama and send more than a few from solid McCain into the undecided zone. Upon further consideration there's one more category worth mentioning, those who tell pollsters they're voting for McCain who now won't bother to vote at all.

While I'm tempted to lower my margin back to seven, I'll keep it at nine, and watch as the other polls follow the pathetic, senile candidate downward.

Rest In Pieces

Let's recap. On a day when it was revealed his campaign chief lied broadly, maybe even to his boss, about his lobbying connections, a day in which he was seen as the key, as leader of his party, to a bi-partisan agreement on very important and pressing work he has real trouble thinking about, a day in which it appears most of the heavy lifting has already been accomplished on said work, a day (the first in months) when the stock market only went sideways, a day in which his opponent's lead in the polls became starkly obvious, John McCain decided, fuck it, he really doesn't want to be president anyway.

I appreciate him saving us all the aggravation his shithead campaign was certain to induce over the next 40 days.

Street Of Reams

My eight long-time readers know I've been predicting the implosion of the GOP for slightly over two years now, and while I've not called specific details (I'm not a mind reader), the expected blows have fallen on those bastards with frequency and energy ever since that squalid little man's flyover of the Katrina blast zone.

(Indeed, one disappointment to me has been the apparently steadfast political loyalty this cycle of those states hit hardest two years ago, Louisiana and Mississippi. Is life so backward there, are the people so beaten down, so conditioned to being led, that the Democratic opposition can't even poll within single digits? It's sad.)

It was only a matter of time before the GOP alliance of Wall Streeters and Main Streeters came apart like a rotten tree. That the tree was hit by lightning only makes the expected event faster, more obvious. In a genuine bi-partisan movement yesterday (perhaps the broadest and most sincere since Nixon was whipped from office) Congress essentially told the administration to go fuck itself.

Clearly, the lecture delivered by that squalid little man sent the Reddest of them over the edge. He and Dick hectored the Hill as if they still had credibility in anything that mattered, instead of being the men who killed the GOP. (Note here, while I expect something called the Republican Party to go forward for a while, a coterie of aging Limbaugh listeners and shark-eyed consultants under a christian-family-war platform, by 2010 it will be done as a monistic national force.) Events and loyalties shifted remarkably yesterday.

Sen. Obama starkly outlined the Wall St./Main St. divide in his first comment on the market meltdown, calling both specifically by name and repeating them ever since. I submit that this not a mere rhetorical device but an adroit recognition of a recognizable political fault line the GOP has straddled for a generation, words every pissed-off Republican and independent understand, a rift which which Obama hammers wider every day.

Sen. InSane, who's been doing very well for 25 years on top of that Wall-St.-is-Main-St. seam has no where to go but down.

UPDATE: Word is that the fate of the bailout bill, in whatever form, is in John McCain's shaky hands. This is only right and just, a senior legislator, the standard-bearer of his party, Mr. Leadership, Mr. Bi-Partisan Accord has a chance to step up and show the American people just what he's made of and how he stands in a crisis.

Ha-ha.

Writing Wrongs

Christ on a crutch.

Two weeks ago, when Phoney and Fraudie went bust, I wrote:

The huge problem, which is not going away for a while, is that many of those shareholders are small banks and pension funds who once relied on the once rock-steady dividend returns of the two government-chartered giants to maintain their stated asset requirements. That is all gone now. Yesterday's Treasury statement only said that any small banks now in such a fix should contact the Federal Reserve. The sticking point here is that no one knows how many that may be, or how much, besides a lot, of worthless paper is still out there.

This morning comes this (from naked capitalism): Banks Take Bigger-Than-Estimated Hit on Freddie, Fannie Conservatorship

It reads in part:

“When the actions were contemplated to reduce dividends on Fannie Mae and Freddie Mac preferred stock, the bank regulators estimated that only a dozen banks would be affected by it,” Mr Yingling said.

Regulators said this month only a small handful of banks had “significant” holdings in Fannie Mae and Freddie Mac relative to their capital bases and that they would help develop plans to restore capital at these banks.

However, the ABA survey suggests the impact of writedowns could be more widespread and more severe than regulators initially indicated, particularly among small community banks that engage in lending for small and medium-sized local businesses.

I'm speechless. I really am. If you need any further evidence that the people running this pig circus have not been paying attention, this is it.

You know what was yesterday's Real Big News which Nobody wanted to pay attention to? GE, GE, asked to be, and immediately was, placed on the no-short-sell protection list. Said protection is due to expire Oct. 2.

Wanna bet?

As The World Burns

It only took the weekend for the glaring flaws of the Paulson bailout to come into general view, one of the main being how the toxic debt is to be valued. As suspected in this space last Friday, Overvalued is the hour's watchword, so as (though no one says so) to provide greater value to the criminal leverages downstream. (I've really got to come up with another word for the location of leveraged debt. Downstream strikes me as too, I don't know. . . wholesome.)

Another, unexpected, outrage is the bid for the absence of any judicial review whatsoever, a point where they may have overplayed their sweaty hand. It only invites a Supreme Court ruling, which can only come out against any preemptive legislated immunity, that will freeze the bill's effect without touching on its merits. The administration says it wants "clean" legislation and this guarantees it won't be.

I also wondered last Friday what will be eligible for saving. Word this morning comes of foreign banks with lots of lousy US instruments wanting redress too. Whoops. This alone could kill the Paulson deal, for to say yes to England and Germany will be to further enrage Main St. and empower opposition (which at this hour strikes me as still in the formative stage), to say no to the Rothman's crowd pretty much flattens western finance.

Ergo, a new plan awaits.

It took about 48 hours to figure that, while drastic measures are indeed called for, the Paulson Plan, like every other administrative offering by our squalid little president's men, will not really work as advertised. (Many agree, but Krugman makes the main case here and here.) The bids by the Euro banks only renders this clearer. Indeed the federal assumption of all that, in Damon Runyon's immortal phrase, phonus balonus guarantees a crash of the dollar into smoking ruins territory. Which, come to think of it, seems inevitable anyhow.

I do give Paulson and Bernanke credit for moving forward in a bold way. However, Paulson's instinct, which took him to the top of Goldman Sachs, is to job the little guy and brutally screw the competition. Trouble now is that it is the little guy who needs the most help and Paulson is going to need all the cooperation from the competition (that is, the assembling chorus of opposition to particular details of his plan) that he can get.

And, just to show that life as Henry knew it will never be the same, the last of the big-time spenders, the dudes he hung with the most, announced their retirement last night, effective immediately. They will likely be needing a pension too.

So what now? As my late father, a WW2 vet, liked to say, beats the hell out of me, lieutenant.

Nodes In Passing

McCain's toast.

Pollsters balance presidential results accounting for cell phone users.

Al Giordano walks us through his Palin tanning bed scoop and how it got a life of its own.

The most excellent naked capitalism blog basically draws the same conclusions as I did yesterday, only more informed, critical, and scary.

Timesman Joe Nocera (via naked capitalism) takes an even harder look at Paulson's plan. (Reading not for the faint of heart.)

And finally, a useful astrological perspective.

In The Zero

Pardon me for thinking out loud and in print, my small way of advocating a particular careful methodology for the wider press to use (yeah, hah) in considering yesterday's rather staggering announcement.

Or rather the announcement of an announcement.

Thursday's enormous last-hour rally came after the Treasury and Federal Reserve (effectively now the same enterprise, which is a pretty big story in itself) and a predominantly Democratic delegation from Capitol Hill signaled the pending creation of a new, what?, public corporation that would buy non-performing debt, thereby removing it from the books (where it currently lies un-priceable and therefore worthless) of the nation's financial bodies, large and small.

By creating a willing and, one gathers, omnivorous buyer, a market is then created for these financial ghosts, a means for them to flicker somewhat back to life.

Left unsaid, because no one knows, is at what rate the worthless shall be redeemed. Anything more than, oh, five cents on the dollar will be properly considered a handout to the greedy and heartless bastards who created this disaster. The govt. chieftains will most certainly try to promote this as a means of saving the little guy from foreclosure, and I expect for a certain number that will be the case--adjusting mortgage rates and extending terms whereby prudent and dedicated householders can pay off their homes.

But there are plenty of those loans which will never be repaid, perhaps more than the ones that will. (Indeed the realization of that is one of the many reasons behind the collapse.) And consider that those vacant properties are, for all their pathos, hard assets, at least for now. Unclear to me, and I beg anyone who can shed some light to do so in comments, is how this settles the connected leverages surrounding the essential debt instruments. Is this exchange of good pennies for bad dollars going to void current CDO contracts? How do these things get settled then?

One senses that the govt. in its new megalomanic role, may in fact overpay for the bad paper, say 30 cents on the dollar, so as to give some downstream value to CDO settlements which would otherwise be non-existant.

Then, of course, we need to wonder what the govt, body (let's call it the BBD, Bureau of Bad Debt) won't buy. It does not take much imagination to see monumental offshore frauds dressed up as worthy for domestic salvation. Who is to oversee the redemption?

Which brings up the issue of time. If the BBD is to be successful in a fundamental way it will take years to refine the sludge responsibly. The suddenness of its proposal, and the haste in which it will apparently be enacted, does not argue on the side of capable long-term assessments.

Which brings up the issue of scale. I don't think the lead actors in this drama have any idea of the size of the obligation they now seem ready to take on. No one does. It is nevertheless measured in trillions and a level certainly able to bankrupt the country. Less than a week ago I was speculating that Secy. Paulson did not save Lehman for fear of committing the taxpayer to an unknown, but huge, amount of debt. I still think that was the case. But the AIG collapse really is a black hole. The Treasury/Fed's event horizon has collapsed to nearly zero, a realm in which there is no practical difference between good judgement and insanity.

The BBD then is the best way forward mainly by appearing now to be the only way--successful only so much as it leavens immediate catastrophic failure by, so to speak, drawing it into an institution where we will dwell with that failure, and its still unknown consequences, for a very long time.

UPDATE: A sunnier take from Krugman which still conflicts with none of the above

UPDATE2: A rather more mordant view from England

Midnight In The Garden Of Goobers And Weasels 4

It is with some relief that I return to our inane vale of politics after a spell in the insane world of finance. First I'd like to offer an illustration of my point from last Sunday regarding the McCain campaign's severe internal contradictions, a fine example being an intelligent and accomplished woman from the results-oriented corporate world having to shill for a shallow political demi-mondine who had been given an exalted party role which more than a few believed might have gone to the spokeswoman instead.

Was Carley Fiorina (whose last name can be translated as "sweet little flower") just being candid in her comment about the governor of Alaska or acting out? With that sort of high-strung, compartmentalized Republican there really is no appreciable difference 'tween the two. Forget for a mo' that the person who ran Hewlett-Packard nearly into the ground probably has little useful insight as to what it takes to run a big company, her elevation to GOP avatar was thanks to Sen. InSane. But be that as it may, she's gone now.

The momentous events of the past few days have left me wondering if our septuagenarian campaigner is losing some enthusiasm for the top job. I'd say the main reason Poppy Bush lost to the Big Dog was that by the middle of that contest it was pretty clear to those paying attention that he really didn't want the job anymore. Call me crazy, but I get the distinct feeling, judging by his scattered reactions to dynamic events, that Ol' John is now rowing that same boat homeward.

A certain kind of sophisticated political observer already has the coming debates all figured out; that Biden will look a fool trying not to appear mean to Miss Alaska, that McCain will perform past his low expectations and all of Obama's manifest competence and poise will come to naught.

Well, consider this Mr. and Mrs. North America: Gov. Palin will come off sounding screechy, preachy and dim while Sen. Biden takes the Engaging prize. And sorry Sen. McCain, with nowhere to turn and nothing substantial to say in his three nights in the spotlight, comes across, and apart, like an old suit.

The Age Of Triage

Lest anyone feel outrage over the problematic AIG bailout, keep in mind that implicit in it is the complete undoing of the system of global finance which has held sway for the last decade, itself a logical outcome of a half-century of "conservative" economic philosophy. Where once some of those ideas had real merit, they also required a Burkean intellectual rigor and institutional morality to function properly, two conditions which evaporated like dew in the first Reagan administration.

I first heard Milton Friedman's name mentioned with reverence back in '73, at Kenyon, where the Poli. Sci. department was stocked with young hotshots fresh out of the University of Chicago. Bright as hell, engaging and lively professors utterly dedicated, though few of us young grapes knew it at the time, to undoing the underpinnings of FDR's social compact. (That this was a task made fairly easy by natural inertia and the guns and butter policy of Ol' Lyndon, does not take a fraction away from their sense of mission and drive.) That one of my favorite professors from that department (I was a dedicated English major) ended up as an aide to our war criminal VP, sent to Iraq to manage its university system before fleeing that country in fear of his life, is something I regard with no small sadness.

As regular readers know, I am fond of saying that, as we saw in Soviet Russia, when things fall apart, they fall apart fast. What is imploding the markets is not so much the fear of further collapses, but rather the secure knowledge that things there will never ever be the same. Money can no longer be spun from logarithms and light. And a generation of wizards raised to believe in that as their due are now disappointed forever. What exactly will take the place of this lost source of capital, and who could possibly oversee it, is, right now, not at all clear.

As for the details, there are so many unanswered questions regarding the sense of the government's rescue work, it is pointless calling them up. Rest assured Paulson is doing what needs to be done, which is, and I am not trying here to be glib or snide, kicking the hard specific decisions down the road for the Obama administration. This is an age of triage, and the choices range from bad to horrific.

On January 20, 2001, the advent of our tiny, squalid president, the Dow closed at 10,588, a level likely to be broken by Friday. I really thought the administration would do all it could to keep the DJIA at least shouting distance above that, but they can't do anything now.

Lotta Lehman

A friend who until last year worked for Lehman in its garish headquarters off Times Square reported that the building was fabricated to stand as a fortress in case of terrorist attack, access to and from the building sealed, on site generators, hazmat suits for the inmates plus a supply of food--I can't recall for how many days.

This nonsense vision, of course, was all about trading carrying on in spite of all, that somehow whatever it was that they were doing inside was of far greater importance than whatever was going on out. This is the ideal of the rugged individual expanded to a gross degree, invading and, as we see now, degrading the public sphere.

It is too early to sift through the wreckage. You do that only after the storm has passed. You may put me in the camp of those relative few who think the Bank of America's assumption of Merrill, debt and all, is completely insane, more of the above.

It should be clear to all paying attention that Paulson did not intervene because of high principle, scruples the Wall St. guys thought they could wear away by Sunday. He did not step in because to do so would, after effectively doubling the national debt last week via Fan & Fred, put the faith and trust in the United States at grave risk by writing a blank check for a deeply unknowable liability. The moment no one wanted to see has arrived, that is the time when the books are opened up and what J H Kunstler calls the hallucinated wealth of the financial sector is assessed at last.

In short, panic is the order of the day.

Copyright Infringement Theater Presents. . .

A rare authorized video, by the mainly unknown Pokey LaFarge, a cheerful anthem for our times.

Ironies In The Fire

Failure in war comes after one side is made to defend the indefensible. I'll move on to politics shortly, but it is the collapse of finance capitalism, that finely tuned infernal device which depended far more on public psychology than private capital or enterprise, now ongoing which is worthy of attention.

For as we sit here this exceptionally rainy morning, a cadre of formerly big thinkers, rich white men all, are spending another day eating takeout from "21" trying to figure how the fuck to stop the collapse of our poor nation's overwrought financial system.

Having bailed out Bear Stearns six mo' ago, and Fan & Fred only last week, both the Fed and the Treasury are, so to speak, now out of options. What no one in the press wants to say, though the Times crew does raise a hat in that direction is that the Bear Stearns rescue was supposed to prevent the very situation now present in the utter failure of Lehman. To wit:

The spreading troubles were the latest sign that even the government’s extraordinary interventions into private enterprise during the last year have not been enough to halt the unraveling of storied companies that were widely viewed as unassailable until recently.

This is, of course, the same news source which this weekend also ran a story under its personal finance banner urging small investors to sit tight, admirably showing the intimate, and little understood, connection between sophistry and criminality.

'Tis the will to believe otherwise in the face of the hard circumstances of increasingly contrary signals which to a great many Americans is the definition of character. Right now, for example, the state of Texas is hurrying to rescue some 140,000 people, rugged individualists (and their luckless families) who decided not to bend to the admonitions of civil authority and the lies of the media and stayed in the path of a monstrous storm which, though not as strong as feared, was still enough to fuck up their corner of the universe and leave them begging for help which may not arrive in time.

That the big storm was called Ike, the name of the first president I can recall, a Republican saint and an exemplar of resolution and nerve during some of this country's darkest hours is an irony too dense to unpack at once. Irony, however, is mainly cheap and disposable symbolism, the presentation of a small, flawed thing in the form of an observation meant to question an otherwise sturdy, though untested generalization. In times, and states, of affluence ironies abound. In destitution not so much, and only in retrospect.

Indeed, irony functions mostly a posteriori and then mainly among the broadly educated. Though useful, like narcotics, it is easily abused. It is not a good way of accessing the present and bad for charting a future.

The point of all this is to observe that the last two Democratic candidates for president, Vice President Gore and Senator Kerry were reflexive Ivy league ironists, sincere and capable men nevertheless prone to framing the incongruities of our society as mordant jokes. Kerry's question to the Senate in 1971, How do you ask a man to be the last man to die for a mistake?, is no less supremely ironic for being true.

Which brings me to the happy observation that Senator Obama labors under no such handicap. Sincerity and involvement (those enemies of irony) define his broad appeal, and will be, I firmly believe, his path to victory. While I would not say the McCain campaign is trafficking in irony (yet), I submit that it is going forward with severe internal contradictions that will only get worse. In recognizing this, it may well be that the Senator from Arizona becomes the rueful ironist in this contest, counting on others to find comfort in the presentation of his grand absurdity.

And many will. Consider however that irony is best appreciated in hindsight by a broad intellect. Acted out in real time, among people of limited intelligence, it has another name, which is farce.

Neon Peons

I don't know how much of a relief it is to turn from our nation's politics to its financial outlook, but yesterday's federal takeover of the ruined mortgage suppliers Fannie Mae and Berni... eh, Freddie Mac is enormous, if hard to parse, news.

First off, I'd recommend all interested parties to read Barry Rithlotz' The Big Picture blog (link on right) for a pretty clear look at the ongoing crisis (some familiarity with investment terms and market actors useful but by no means necessary.)

The blog's comments section is mainly a chorus of the furious well-heeled, rather the sort of investors who once were the backbone of our formerly productive, industrial society. This morning, in a discussion of where the stock market will move in the wake of the weekend's news, I was most struck by this fellow:

I would agree with the 60/40 asset price vs systemic risk estimate. Too many save the world on a Sunday events only followed CNBC cheerleaders and a slow decay. I don't think the market is going to stay up. The fact of the matter is that we need to produce our way out of this and that will be hard; consumption and borrowing will not work. The big interests will want to pump up the prices, scale out, but I think this time the little guys got their number. I hope so.

I am so disgusted at our government, banking and investment banking institutions that I can't see straight. In today’s world investment banking is an oxymoron. I feel totally abused by Wall Street, the banking system and politicians. They are all lying sacs of **** looking for a fee with no regard for social contribution. These sets of bailouts are socialism, not for the rich, but for the shameless greedy bastards. I wish we could put them all in jail. The system is sick and the whole country is going down with it.

I am an individual investor that owns two homes that I can afford, never took on too much debt, does not play around with margins, invests rather than speculates, and works hard along with my wife to raise a family. My wealth comes from a business I started 12 years ago and sold last year. Thank heavens I did.

Luckily I went totally into cash last October because I read your blog along with other "permabears" (realists). Yes you were the cause, and I thank you for saving my ass. Really sincerely, thanks.

I say get this thing over with fast. I am about sick of these Sunday save the world deals. Let it all go to hell and crash so that the people that really behaved correctly can pick up the pieces and make some money the old fashion way through prudent investment that promotes growth and productivity. The quicker this happens the better off we all are.

That is the only way to avoid the moral hazard. Let's rotate to the people who behaved and give them a chance. Let the others crash and burn and start all over again.

I am one tired pissed off sick tax payer.

As I see it, and I believe many would agree, the government bailout of Phoney and Fraudy--which is, alas, entirely justified--was done to assure the increasingly restive foreign holders of the entities' bonds, mainly the Bank of China. To do so, the enormous liabilities run up by management, which has been sacked, has been left to company shareholders, common and preferred, who as of this morning are holding essentially worthless paper.

The huge problem, which is not going away for a while, is that many of those shareholders are small banks and pension funds who once relied on the once rock-steady dividend returns of the two government-chartered giants to maintain their stated asset requirements. That is all gone now. Yesterday's Treasury statement only said that any small banks now in such a fix should contact the Federal Reserve. The sticking point here is that no one knows how many that may be, or how much, besides a lot, of worthless paper is still out there.

This, folks, is the real shit. In the space of forty years the U.S. has gone from an industrial giant, to a consumer one, to a nation of debt peons. That our Main St. financial institutions have lately fallen into this category will be hard to ignore, though many will do their best to try.

UPDATE: Mr. Ritholtz has just laid it all out. For you interested parties it is required reading.

Palin And Out

With habitual perspicacity I noted here five weeks ago that McCain's candidacy might be the first in history to be finished before the convention. I think I predicted the press soon turning on Ol' John too. What's really bad for the Republican'ts now about America's new soap opera is that it gets their head guys saying monumentally stupid things to reporters, take McCain Campaign Manager Rick Davis:

"This election is not about issues. This election is about a composite view of what people take away from these candidates." (via TPM)

Which the Obama folk just tore into with joy.

Now Josh seems to think they're going to tough it out with Sarah, but we here know that this is not the case. Complicating matters is the convention, of course. They will do their best to get her through that, maybe even the morning TV appearances. But the pack will not go away, and soon enough some women's magazine affliction, a cancer scare, maybe the flair-up of an eating disorder from her beauty pageant days, will compel the poor woman, for the good of her children and a wonderful man like Senator Insane, to return to the land of the midnight sun to get well and be the best damn grandma and governor she can be.

Fuck if I can say who'll step in. McCain's operation is so hated now that there's a good chance that even an airhead like Pawlenty would tell him to fuck off. Come to think of it, the logic of that leaves only Holy Joe standing, the prospect of which makes my heart soar like a hawk.

Pregnant Pause

If there's one thing we need to remember about the Republicans, how they govern and campaign, it is their intimate reliance on the art of public relations. One might make a case that their entire success from Ronny onwards was crafted on market-tested press cultivation, from the creation of neologisms to the printing of books, stories were framed to their lights. They really did create their own reality, and as long as that reality didn't run up against obvious abject failure in the empirical world, they did just fine.

Well I need not have to explain how it all began to go for shit under that squalid little man, starting with Mission Accomplished.

I don't know what says less about John McCain and his team, that they didn't know about Palin's small-town comedy/drama, or that they did and handled the rollout like this anyway. Teen pregnancy needed to be in the press pack they handed out Friday morning. That it was not says more about the ruined GOP brand than anything liberal bloggers could possibly churn out. And the sweet part is that the people who count the most in that decaying party, those top ops and fixers who really run things, most especially the older ones who know how it used to be done, must now feel it in their teeth and bones.

It looks like McCain will stop filling sand bags and head for St. Paul. Smart move. However, let's note how eager he was not to go, and wonder if he really feels ready for the biggest night of his political life.

Down The Drain With John McCain

Yes, the GOP is in a tough spot between the convention and Gustav and cutting back the program is a wise thing to do. But. The delegates, your people, require something. That our little president won't be there is surely a relief to most of the organizers. He rightfully is where he should have been three years ago, doing fuck all. But once-upon-a-time the vice president's job was to show up when the president was otherwise engaged, and Dick's absence is not so easily explained away, outside of the fact that most people despise him and he needs to keep track of the all the rigs blown out in the Gulf.

Heartless creeps should not even attempt public compassion. It goes against their fundamental nature, makes them resentful and they lash out in predictable ways. Recall the president's hag of a mother in New Orleans three years ago, and note we have not heard a word from her since.

If John McCain was a genuinely compassionate men, if he could hold and move a crowd larger than 200 with his antics, if he could really speak from the heart, he might give a moving acceptance address in a subdued hall, one which called upon, as Obama's did, the deeper meaning of nation and citizenship. Instead, because he is much better at control than concern, because he does not get it, he is threatening to give his speech to a camera and some distracted aides while the people he needs to support him the most passionately, the ones who were counting on seeing the man chosen to lead their party, will be sucking wind in St. Paul, if, that is, they have not already left.

Funny that the party of the Great Communicator has come to believe that lighting up TV sets is more important that lighting up crowds. You can see how they've come to that mistake in their way of winning elections. But that the leaders of the party are satisfied with video seances, that they think the Jumbotron image is enough for their true believers, speaks to an innate emotional disconnect between rulers and citizens that Katrina, and now in a different way Gustav, makes all too clear.

Consider also that TV is a vicious god. The networks have a lot on the line, not the least of which is their need to make money while driving the debate. What about the ads not aired, the money refunded, the costs spent, worst of all--the unforgivable lack of Product? Granted there will probably be plenty of storm coverage for the next few days, but if the damage isn't as visually dramatic as Katrina's, if Gustav does not have legs, the rage of the beast will not be calculable.

Copyright Infringement Theater Presents. . .

Those guys.