The following article appeared in Texas-based Code Blue Politics.
I love talking with my right-wing friends. They’re not that different from my left-wing friends except they dress better, have 2.3 kids, a 3 bedroom 2.5 bath home in the suburbs and they own 3 cars. They’re in debt up to their ass. They’re miserable in their marriage (I know cause I take em to strip clubs all the time) and they’re “a sexting, cell-phone left on the night stand” minute away from getting busted by their wives. My left-wing friends are in collection or hiding from the IRS, they’re not divorced because clubbing in Brooklyn is too much fun for them. They have stupid degrees that my dad would say have no possibility for employment and most write like me.
This article is a refresher course for the first group; the suspender wearing, French cuffed, Gucci loafer, Armani suited friends on my speed dial who are addicted to CNBC and revere Rush Limbaugh as a Saint.
I love talking with my right-wing friends because it’s like talking to a Stepford-Spouse version of a cloned Enron Board of Director. No matter what you say to them: “Hey conservo…the sky is blue.” They’re gonna respond “It’s Pelosi’s fault and your tree-hugging friends who think government is nothing more than a liberal-cause, ATM machine.”
The Debt Ceiling Cause
Hey finger pointing morons. Wake The Hell Up! We have a debt-ceiling issue because we’ve spent more than we’ve earned. This hasn’t been caused by illegal immigrants, universal health care, sharing needles in New York, welfare, social security, or free school lunches. It’s not from big-government or liberal spending. You can’t pin this on the left unless you can tie Greenpeace to Wall Street. Gulp, I can’t even pin this on Republicans, as much as I’d like to.
The root cause that dwarfs everything, is something called derivatives. They’re bastard investments gone berserk. Warren Buffet called them Financial Weapons of Mass Destruction. There are $600,000,000,000,000 worth floating around in the world. If you haven’t seen it on paper, that’s 600 trillion. That’s more than the world’s entire net worth! How is that even possible? It’s called leverage. It’s real and scary as hell. Our immediate “minor little 14 trillion dollar problem” was caused, because we’ve had to infuse 3 trillion dollars into our system just so we didn’t go BK. Lehman Brothers and Merrill Lynch and Countrywide weren’t so lucky. The 3 trillion was just a band-aid. The debt ceiling problem portends far worse things.
The United States and European Union keep tossing life preservers to businesses too large to fail, and countries too important to fall. A country in default looks horrible on the world’s resume.
Why a Silly Little Liability to Asset Ratio May Send the World Into Depression
Derivatives are deadly because they’re built on nothing but a house of really thin cards. Hedge Funds, Collateralized Debt Obligations, and Mortgage Backed Securities were created by Wall Street in an infectious wealth-grab of unprecedented proportions. Many economic experts agree that the liability to asset ratio of many derivatives was as high as 40-1. For example, a $200,000 mortgage secured by real estate, turns into an $8,000,000 paper, hedge fund. That’s right; the inherent security of $8,000,000 in Wall Street Monopoly Money might be something as innocuous as a little tract-home in Riverside, California where now, the value might be $75,000 on a good day.
Reality Check and Doomsday Warning
Things are going to get much worse. Say you heard it here. Call me Chicken Little, or a left-wing nut case, it doesn’t matter, the government, Wall Street, CNBC and anyone else who’s got a vested interest in keeping it’s metaphorical afloat, will downplay the issue, point to the security of our country and the strength of the dollar. I’m looking hard at self- sustainability, how to grow chickens and develop a reasonable personal water supply. Good Luck!
