Mallard Fillmore, the Right, and the Prius.

I thought Mallard Fillmore was a political commentary comic strip; recently, I've been reminded it is a right-wing political commentary comic strip. Obvious political bias, especially when it's lame ass rehashings of party talking points from months ago- like today's strip in The Huntsville Times, in which Obama is lambasted for kicking a reporter off his plane during the campaign. Have we forgotten that kicking reporters off planes is somewhat standard practice? Have we forgotten that Bush did it, Clinton did it, McCain did it, and others have surely done it? Generally, though, it irritates me to see anyone lambasting the president-elect for things he should/shouldn't/could do once he's the President. It's childish, it's counting the chickens before the baskets hatch from the eggs, and it's stupid. Let the motherfucker fuck up before we roast his ass. Why artificially concoct bullshit, now? How many infallible politicians do we have in this country that so many people are scared if they don't constantly throw mud there will come a time when mud throwing isn't allowed/wanted?

The Right of US's political divide has been pissing me off, more than usual, lately. First, the talking heads that squawk on and on about how "this recession isn't any worse than any before it", or how "[some financial thing] doesn't need to be further regulated", or how other countries are blaming the US, entirely, for the current world woes. That last isn't a "right-wing" thing per se, but it fits in the general theme, and that's good enough for me. (Though, I'll deal with it separately later). First, the average length of a Recession since WWII: 8-10 months. Current length of this Recession: 12 months, and counting. Last time we were in a recession that lasted this long? Either the early 90s or the early 80s depending on if you take into account "depth" and to whom you listen.

Once again, this world wide problem came about in a number of ways. Partly, the US economy has been bolstered over the last 5-8 years by debt, as has most of the world's economy. In fact, modern economics is the manipulation of debt- in a very real way. There was a huge glut of global money looking for a place to be invested. The first place it found was gas. Oil always goes up, just like the value of a house, or so the wisdom went. The only negative had been how slow those rising values happened, but the global pool of money didn't want risk, so slow growth was seen as the perfect solution. This led to rising fuel costs as futures were invested in, and demand from the emerging economies of China, Brazil and Russia far outpaced supply. Investment + Demand = Skyrocketing Oil value.

At the same time, two things were happening in the financial sectors of the US, the UK, and several other countries with large, valuable, housing markets. First, growth was steady and rising, and seen as reliable and safe. Second, Credit Default Swaps- unregulated, non-transparent, financial instruments handled exclusively by large financial institutions- became a source of speculation, instead of a sort of insurance policy on low risk bonds. Technically, these things happened first, as they started in the late 90s and early 00s; but the problems snowballed when fuel costs ran rampant.

The financial obligations of CDS's spread risk, and investment in debt, over huge swaths of the financial industry, by linking bond payouts. A Credit Default Swap being an obligation to pay out on a company's bond if that company should default- these were then "netted", causing there to be (basically) 50-60 trillion US$ of obligated insurance on 5 trillion US$ worth of bonds. Bonds, CDS's, fuel futures, all of it is betting on debt, and the repayment of that debt.

The housing market was primed for some of that huge pool of global money. It was already seeing returns from oil futures, and experts understood that those returns were going to slack off as gas prices climbed higher, causing consumers to cut back. In other words, the growth of that sector was forecast to plateau. This made investors hungry for more of the overwhelming growth they had been experiencing and grown accustomed to; and the only other market with slow steady growth was housing.

The problem with housing was that it grew based on the debt in the system. When a homebuyer gets a loan, his debt enters the system as a mortgage, and can be bought up. Bundle a bunch of those debts together and it's a Mortgage Backed Security- another financial instrument, like a bond or CDL, and like them based solely on debt. Mortgages default on a regular basis, always have. If each person had a base 10% chance to default, bundled mortgages of 10 people had a 100% chance that one of them would go bad. But the other 9 wouldn't, statistically. That's safer than buying one mortgage, where if it goes bad your investment is shot. It's even safer to buy up 1,000 where 100 will probably go bad, but 900 will make their payments back to you.

Seems simple and straight forward, right?

The problem was lack of consumer protections. Think about this: according to the Bell Curve, if you're above the median intellect (and if you're reading this, it's a safe assumption that statement is true) the majority of people are dumber than you. That's understandable, of course, you encounter many morons in your day-to-day. The additional fact is, though, that someone dumber than you, but also above median, is smarter than the majority of people. Imagine that guy or gal, and then imagine the person behind him. Call that person "X".

The banks knew they could make large profits off bundling mortgage loans together and "selling" them to investors. The more loans they made, the more bundles they could sell. Lawmakers, at the time, knew such deals would improve the economy, and in times of plenty those in power stay there. Lawmakers encouraged the businesses; and the Businesses, not really needing encouragement to make every cent they could, happily ran full steam ahead. Banks gave out more and more loans, ignoring previously held economic principles on "acceptable risk". Meanwhile, they were also obligated to pay off potential debts, through CDSs.

Our freindly dumbass "X" gets told that it doesn't matter how much he makes, what his credit history is, he can "HAVE THE AMERICAN DREAM!" and own a house. "X" is also being told, by popular entertainment, it's easy to "flip a house" and make some quick cash. "X" knows he's smarter than most- who isn't? - and he goes to his bank. The Bank doesn't check his credit history, they don't check his employment history, they give him a mortgage and sell it down the line before "X" has left the building. "X" has seen on the paper how his payment is only $500/mo, whereas his apartment payment was $550/mo (he lived in the cheapo roach infested shit apartments). He goes to his nice house, makes the payments for a month or two, and then something happens. His variable rate mortgage causes his interest rate to adjust higher and his payment to go up to $550/mo. Well, he managed that before, and he can do it again- but gas is up to $3 a gallon from $2 a gallon when he lived in his apartment. He's paying bills late, but still paying, then the rate jumps again and he's paying $600/mo and gas is at $4/gal and projected to hit $5/gal soon. He starts missing payments. The rate goes up "X" gets more and more behind and forecloses because he was fooled and a fool. When he bought the house, he could pay for it; and the Bank man assured him the rate wouldn't adjust for a year or two or more and it wouldn't adjust by much. Unfortunately, it adjusted twice in six months and adjusted by more than a point each time.

So now, the default rate is 20% instead of 10%. That hurts, and causes some companies to issue more bonds to cover immediate cash needs, but everything is stable. The lenders have already lent to everyone remotely worth lending. The Housing market follows oil and plateaus. Except, the lenders haven't stopped lending. The stupid people agree to loans they couldn't POSSIBLY afford; and the greedy businesses continue to make more loans and sell them to global investors because they can pull in hundreds of thousands (instead of hundreds of millions, but still good money, right? Right? RIGHT!?! AMIRITE!!111). Finally, one too many people default.

A solid company, invested in low risk markets like oil and housing starts to issue more bonds to cover some of its debt. Those bonds get insured by CDSs and those CDSs are covered by further CDSs. The solid company becomes shaky, more bonds, fewer CDSs- but more profitable for CDS speculators (so long as the compnay doesn't collapse, and it's been stable for 200 years, it would NEVER coll...). One too many defaults and the company collapses inside 6 months of being stable. Now those CDSs come up.

The company that went under had CDSs on some other companies. Some of those companies, less historically firm, have hit their one too many mark and crashed as well. Now, CDSs are being called in. The money isn't there. Yadda Yadda Yadda, Today.

That's where we find ourselves, and there's a single simple perpetrator. A slimy, greasy, suspect, motherfucker, who deserves nothing but our contempt, our hatred, and our rage. The perpetrator is: Damn-near-every-fucking-body. Greedy Businesses, Stupid and Greedy People, Government Regulators, Politicians, Banks, Investors, everybody. It's not a US problem, it's not a Europe Problem. It's a World Market Problem. The reason it's a World Market Problem, is because- and correct me if I'm wrong- WE'RE A GLOBAL ECONOMY! Everyone's business is intertwined with everyone else's. If shit goes south in Japan in the 90s, it hurts us here, if it hurts us, it hurts Europe, if it hurts Europe it hurts Asia, guess where Japan is? Asia, a part of the world you MAY have heard of...

The Prius has taken a hit- one down, now if iAnything would be shown, conclusively, to cause ovaries development in men and cancer in anyone with ovaries I'd be able to smile once in a while. November sales for the Prius have dropped 48%, according to Toyota. Everyone's blaming the dramatic fall in gas prices from $4/gal back to ~$1.60/gal. Uhm... I have a thought on this... could it be... maybe.. that we're in a RECESSION? Could it be that people are losing their jobs, scared of losing their jobs, still nervous from how $4/gal gas came outta nowhere [Mention Peak Oil and I'll hunt you down, remove your sexual characteristics with a rusty spoon, and force you to watch Maddow, or O'Reilly, while listening to "It's a small world" on infinite loop.], hurt from the loss of 50% of their retirement plan's value, and in a million other ways not buying $40k cars? Show me 1 single car over, let's say $20k that hasn't seen a drop from last year. I'd bet, you can't. And I'd bet that the more expensive the car, the bigger the drop in sales. Gas being "cheap", if it has ANYTHING to do with it, is probably not responsible for more than 3% of the decline, I'd bet. (Complete supposition there, based on how "environmentally" conscious everyone got when they could afford to be................. ahem........) . . . . . .................. . . ................. . . . . . . . . . . . . . ...
Right.

One last thing: Nade-off-with-the-money. First off, Jewish people who say they have it rough in Florida should be forced to have it exactly as rough as they try to say. Secondly, British Cry Babies who boo-hoo American Regulation should try and think before they speak. American Regulators fucked up, they were warned about this douche bag a couple times, sure. Yet, I keep coming abck tot eh NPR interview I heard with a money manager who had decided not to invest with the guy. The Manager said if the person controlling the money isn't willing to tell us how he's making his profits, we're not willing to trust him with our money. He also said that consistent 1% monthly growth was unreasonable. In other words, He said "We use common fucking sense, and so we didn't get burned by this shithead." The fact that the guy is Jewish and a lot of Jewish investors and Charities got swindled, that means nothing. He didn't target them for being Jewish, he's a fucking criminal and saw a mark.

The thing that should be talked about, isn't the 50 billion he screwed people out of, it's how extremely rare is such a con-job. A year ago in France, this same sorta fraud happened for $7 billion. One person was saying that this wouldn't be the last fraud. Hedge Funds are, like the CDSs that spread the financial crises out from US housing and across markets/the world, sorely lacking in regulations.

"But regulation is bad."

The regulations I am a HUGE proponent of, are TRANSPARENCY and DISCLOSURE. You want a free market? Okay, open your books. Your system of correctly guessing isn't a trade secret. It's a system of guessing. Research can make the guessing more accurate, more likely to make money; but it's still guessing. Fuck you, show us EVERYTHING.

And that goes for all financial EVERYTHINGS. Show us the money. Where is it? Who is promised to? How's it being made? Account for where it is currently!

Accountability, Transparency, Disclosure. If they don't have them, don't do business with 'em. And you, Jewish or Gentile, won't get bilked.