Morphizm Main

Present Tense
David Gedge and The Wedding Present are coming straight outta L.A. on El Rey: MORE

Spaced Out
Jason Pierce has a thing for fire. So together we poured gasoline on Spiritualized: MORE

Meowwww!!
From slicing up cat dicks to signing up Fonzi, Big Tobacco has pulled some weird science: MORE On the Beach
Dream pop standouts Beach House are catching heat. But can they catch fire live? MORE

Stipe On Speed
R.E.M.'s thrash attack has gone into hyperdrive on the brilliant Accelerate. Stipe tells us the targets: MORE

Slugs 4 Obama!
Atmosphere's When Life Gives You Lemons... is all about the hope. And so is Obama: MORE

I Say God Damn!
What's left unspoken in the Obama flap is this: Has God blessed America recently? MORE Ass Out!
Assy McGee is one hell of a cop from hell. So where are his arms? Our interview explains: MORE

Miss Fortune
China's Olympic intrigue has reached critical mass. Who says politics and sports don't mix? MORE

Nirvana's Son
Kurt Cobain: About a Son is out on DVD. Its peek into bipolar stardom is still hard to watch: MORE

Betrayed?
Boxing legend Joe Louis gave body and soul to God and country. Did they repay the favor? MORE

Taxi!
Those in need of war films are scoping the wrong Oscar bait. Try the Dark Side: MORE

Pro Choice
Clinton or Obama? Good question. Now, all you have to do is answer it, and wisely: MORE

In Cold Blood
Rick Geary creates comics that paraphrase history without passion. Our interview explains: MORE

RIP, Prof
Kashmere pioneer Conrad Johnson has passed. But his upstart funk still lives on: MORE

Past Proust
Adapting one of canon lit's most knotted yarns into a comic just might work. Wait, it did: MORE

Disowned!
The housing collapse is a failure of white-collar proportions. Klein saw it coming: MORE

Trash It!
Is your home worth less than your mortgage? Then walk away, baby. Just walk away: MORE

Dystopia Drift
Unembedded journo Dahr Jamail has seen Beyond the Green Zone. And it's looking ugly: MORE

Best of 2007
El-P's I'll Sleep When You're Dead was the most brutally honest music of the year: MORE

Fed Up
Bernanke's rate cuts won't stop the bleeding. It will just cover up the tracks. Thanks, Greenspan! MORE

Beat This!
Ike Turner has passed on. But Morphizm's last interface with the funk maestro never will: MORE

Hyperrealist
Karl Rove now says Congress rushed Bush into war with Saddam. Revise your textbooks! MORE

Shop or Die
The Kubler-Ross Model works for death, but it also works for the mall. Even around the Bratz: MORE

The Fixer
Gordon Brown is a go-to guy if you're a lobbyist. Or a fan of Rupert Murdoch: MORE

Guns, Green?
The market has spoken, says Naomi Klein. And it wants bullets rather than renweables: MORE

Pak Attack!
Musharraf may be Bush's nightmare, but he started out as Clinton's daydream: MORE

TomorrowSci!
From pain rays and flying cars to innovations to save our sorry hides from climate change, tomorrow science is here today: MORE

Not a Moralist
The Serbian photographer Boogie has seen his fair share of the global underworld. Good thing he took pictures: MORE

Party's Over
Serj Tankian's debut solo effort Elect the Dead says civilization is over. So why is he smiling? Our interview explains: MORE

The Perv
Pakistan dictator Pervez Musharraf has declared martial law and suspended the constitution. Who's surprised? MORE

God is Bond
Barry Bonds isn't the only sports superstar who points to the Man Upstairs when he scores. Piety has gone viral: MORE

Hypermarket
From plunging dollars to skyrocketing oil, the hyperreal American economy is due for a real-time ass-kicking: MORE

Pin is Back
It's been a long time since the stunning Summer in Abaddon. Good thing Autumn of the Seraphs is on the way: MORE

Ignore Nothing
Indie-hop titan El-P's newest epic I'll Sleep When You're Dead is filled with biohazardous truth. So is he: MORE

Sicko 'Em!
Whatever. Michael Moore's new movie on the corrupt American healthcare system is good for you: MORE

Water For War
If you think the clusterfuck for oil is scary, just wait until we're more worried about H2O than CO2: MORE

Altered States
Don't know much about global warming? Keep it that way. Trust us, you don't wanna know more than that: MORE

Pelican Echoes
If you think wordless metal can bring noise but not brains, we talked to a band that wants to talk to you: MORE

Steampunker
Rasputina has finally embraced the War on Terror in Oh Perilous World. What took so long? We asked: MORE

Osama's Diary
It's a stone cold Morphizm classic. And it will still make you cry. Almost as if it was real. Really: MORE

Slice and Dice
Cake blew up with a cover song, but they're even better at blasting "War Pigs." Our interview explains: MORE

Gaza Lab
Israel. Hamas. Fatah. What the? Gaza is looking less like a prison and more like a petri dish every day: MORE

BagCalgary
Fronts in the War on Terror are shifting. Which means Canada's oil sands are up next for a global warming: MORE

Crow's Nuts
The indie Tony Millionaire strip Maakies is at last making the legit jump to Adult Swim. Bottoms up, sailor: MORE

Vulture Funds
You've got to get in on this one. You buy $5 million in Third World debt relief, then sue for $50 million. Suckers buy it every time: MORE

DIY or Die
Art-punk corn dogs The Minutemen were brazen heroes. It's about fucking time someone gave them a biopic: MORE

Not a Slave
300 director Zack Snyder may be a friend to CGI, but he knows when to leave it alone. Our interview explains: MORE

Physics of Iraq
What goes up must come down and what gets jacked must come back. Ask the British. While you're at it, go ask Icarus: MORE

A Bit Awkward
The Pixies' doc loudQUIETloud captured the band selling out stadiums and ignoring each other. Our interview explains: MORE

Total Chaos
According to our interview with journo and author Jeff Chang, the hip-hop arts movement is far from dead: MORE

Get Truthy!
Stephen Colbert's vivisection of the stoopid Republican machine is an example of linguistics at its ballsiest. Suck on it: MORE

Cry Wolfie
Let's not drink the Kool-Aid. The World Bank was fucked up long before fuckup Paul Wolfowitz took over: MORE

Object: War
Our hyperreal narrative in Iraq is in search of an ending. Will the American people write one before it's too late? MORE

Good Machines
In these liner notes excerpts from his compilation Fuzzy Warbles, XTC architect Andy Partridge's love of tech goes haywire: MORE

Torture Works
Is it just us? Or is the tight-lipped Bush administration's call to torture for information more than ironic? Hey, wait: MORE

Go Fuck Yourselves
President Bush's speech on the war's escalation revealed much. Including how little he cares about...well, everyone: MORE

"How My Brain Works"
From sci-fi to hip-hop, Michel Gondry has a gift for visual invention. And we have a lot of questions for him: MORE

When PNAC Attacks!
Get to know your well-heeled presidential family and other comb-lickers in this excerpt from Fanta's comic Bush Junta: MORE

I'm the Distorter
Sure, the Democrats may have taken over Congress, but the Bush administration hasn't blinked on Iraq. And it never will: MORE

Trial of Trials
Jose Padilla was once a terrorist. Now he's putting U.S. torture policy on trial. Only in America: MORE

Garrison State
Muslims rioting. Americans killing. Too bad no one's made a film called Why We Fight. Wait, Eugene Jarecki has! MORE

Guilin
"The smell of damp earth that hangs over Guilin will surrender, and join the cosmopolis cropping up along the Li:" MORE

Game/Theory
"In the cinematic fashion of the dying antihero, I expired while reading the stars. Coordinates on a grid of contested terrain": MORE

Fanta Goes Beastly
A comics powerhouse compiles a massive tome on our collective nightmares. Vampire and Harpy haters beware: MORE

Shit Happens. Real Fast.
In our continuing exegesis on exponology, China explodes and Antarctica's demise accelerates: MORE

Exponology
The planet is heating at an exponential rate. But what is the exponent, and who are the people spinning it? Enter Morphizm's formative science, awaiting your learned modification: MORE

Panther Power
Fuck Hoover's race paranoia. The Black Panthers have survived, from Marvel comics to hip-hop to a loud ass protest near you: MORE

Surfing With Rosa
In honor of the Pixies doc, Morphizm pays homage to their Surfer Rosa/Come On Pilgrim split, an enduring classic: MORE

Tuesday, July 01, 2008

 

HuffPosted! Great Depression Goes Viral

Hey pals, my post on our Ponzi economy's return to the Great Depression has landed on the fine pages of The Huffington Post. Load up the guns and comment at will! The more, the better. Just like money.

The Great Depression Goes Viral
The first thing we need to admit to ourselves is that the war and the economy are the same issue, not separate ones. The next thing we need to to is unplug ourselves from the chatter, and plan for the future. Which means turning off Fox, CNN, MSNBC or talk radio, if only those programs that bypass research for retardation. Or redundancy, if you are offended by the metaphor. The point is the point, which is a tautological way of saying you are wasting your time if you are getting your news from people who are not only giving you not just their opinion, but the worst possible opinion available in
contemporary media... MORE @ MORPHIZM

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Monday, June 30, 2008

 

I Called It! The Great Depression

Last July, I took a novice's look at hedge funds, housing, gambling and America's ass-backwards foreign policy and declared what I thought to be the obvious. The spiel landed on Alternet in the form of a supposedly sensational article called The Crash of 1929: Are We on the Verge of a Repeat? I thought it was a hoot. Others thought I was high.

But it ended up being obvious. June gloom just killed off the second quarter of 2008, and the Great Depression is finally going viral in the mainstream media. CNN Money's closing report on today's trading dropped it three times, including once in the subheadline. And they're not alone either. The economy has become the top election issue of the year, and chatterheads like Jim Cramer and Lawrence Kudlow are looking worse while doom prophets like Naomi Klein and James Kunstler are looking cooler by the day.

Which totally rules: The more people unplug from the Kool-Aid machine, the faster we can get past disaster capitalism and onto the next stage in our economic evolution, which is alternative energy. I say economic evolution, but it might as well be our salvation. If we don't get off gas fast, we're headed to a junkie's end. Ever seen one? Not pretty.

The first thing we need to admit to ourselves is that the war and the economy are the same issue, not separate ones. The next thing we need to to is unplug ourselves from the chatter, and plan for the future. Which means turning off Fox, CNN, MSNBC or talk radio, if only those programs that bypass research for retardation. Or redundancy, if you are offended by the metaphor. The point is the point, which is a tautological way of saying you are wasting your time if you are getting your news from people who are not only giving you not just their opinion, but the worst possible opinion available in contemporary media.

See the games for what they are, and help those around you see them as well. We're trillions in the hole since Bush took office. Let's make sure the next president knows his way around a game theory, or two.

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Wednesday, June 25, 2008

 

Exxon Drills Alaska In The Ass

[Morphizm homey Greg Palast checks in on the Supreme Court's recent hand-off to Exxon, who really needs the money. Way to go, Supreme Court. Way to stand up for the oil-slicked little guy. -- ST]

Court Rewards Exxon for Valdez Spill
by Greg Palast
Twenty years after Exxon Valdez slimed over one thousand miles of Alaskan beaches, the company has yet to pay the $5 billion in punitive damages awarded by the jury. And now they won't have to. The Supreme Court today cut Exxon's liability by 90% to half a billion. It's so cheap, it's like a permit to spill.

Exxon knew this would happen. Right after the spill, I was brought to Alaska by the Natives whose Prince William Sound islands, livelihoods, and their food source was contaminated by Exxon crude. My assignment: to investigate oil company frauds that led to to the disaster. There were plenty.

But before we brought charges, the Natives hoped to settle with the oil company, to receive just enough compensation to buy some boats and rebuild their island villages to withstand what would be a decade of trying to survive in a polluted ecological death zone.

In San Diego, I met with Exxon's US production chief, Otto Harrison, who said, "Admit it; the oil spill's the best thing to happen" to the Natives.

His company offered the Natives pennies on the dollar. The oil men added a cruel threat: take it or leave it and wait twenty years to get even the pennies. Exxon is immortal - but Natives die.

And they did. A third of the Native fishermen and seal hunters I worked with are dead. Now their families will collect one tenth of their award, two decades too late.

In today's ruling, Supreme Court Justice David Souter wrote that Exxon's recklessness was ''profitless'' - so the company shouldn't have to pay punitive damages. Profitless, Mr. Souter? Exxon and it's oil shipping partners saved billions - BILLIONS - by operating for sixteen years without the oil spill safety equipment they promised, in writing, under oath and by contract.

The official story is, "Drunken Skipper Hits Reef." But don't believe it, Mr. Souter. Alaska's Native lands and coastline were destroyed by a systematic fraud motivated by profit-crazed penny-pinching. Here's the unreported story, the one you won't get tonight on the Petroleum Broadcast System:

It begins in 1969 when big shots from Humble Oil and ARCO (now known as Exxon and British Petroleum) met with the Chugach Natives, owners of the most valuable parcel of land on the planet: Valdez Port, the only conceivable terminus for a pipeline that would handle a trillion dollars in crude oil.

These Alaskan natives ultimately agreed to sell the Exxon consortium this astronomically valuable patch of land -- for a single dollar. The Natives refused cash. Rather, in 1969, they asked only that the oil companies promise to protect their Prince William Sound fishing and seal hunting grounds from oil.

In 1971, Exxon and partners agreed to place the Natives' specific list of safeguards into federal law. These commitment to safety reassured enough Congressmen for the oil group to win, by one vote, the right to ship oil from Valdez.

The oil companies repeated their promises under oath to the US Congress.

The spill disaster was the result of Exxon and partners breaking every one of those promises - cynically, systematically, disastrously, in the fifteen years leading up to the spill.

Forget the drunken skipper fable. As to Captain Joe Hazelwood, he was below decks, sleeping off his bender. At the helm, the third mate would never have collided with Bligh Reef had he looked at his Raycas radar. But the radar was not turned on. In fact, the tanker's radar was left broken and disasbled for more than a year before the disaster, and Exxon management knew it. It was just too expensive to fix and operate.

For the Chugach, this discovery was poignantly ironic. On their list of safety demands in return for Valdez was "state-of-the-art" on-ship radar.

We discovered more, but because of the labyrinthine ways of litigation, little became public, especially about the reckless acts of the industry consortium, Alyeska, which controls the Alaska Pipeline.

* Several smaller oil spills before the Exxon Valdez could have warned of a system breakdown. But a former Senior Lab Technician with Alyeska, Erlene Blake, told our investigators that management routinely ordered her to toss out test samples of water evidencing spilled oil. She was ordered to refill the test tubes with a bucket of clean sea water called, "The Miracle Barrel."

* In a secret meeting in April 1988, Alyeska Vice-President T.L. Polasek confidentially warned the oil group executives that, because Alyeska had never purchased promised safety equipment, it was simply "not possible" to contain an oil spill past the Valdez Narrows -- exactly where the Exxon Valdez ran aground 10 months later.

* The Natives demanded (and law requires) that the shippers maintain round- the-clock oil spill response teams. Alyeska hired the Natives, especiallly qualified by their generations-old knowledge of the Sound, for this emergency work. They trained to drop from helicopters into the water with special equipment to contain an oil slick at a moments notice. But in 1979, quietly, Alyeska fired them all. To deflect inquisitive state inspectors, the oil consortium created sham teams, listing names of oil terminal workers who had not the foggiest idea how to use spill equipment which, in any event, was missing, broken or existed only on paper.

In 1989, when the oil poured from the tanker, there was no Native response team, only chaos.

Today, twenty years after the oil washed over the Chugach beaches, you can kick over a rock and it will smell like an old gas station.

The cover story of the Drunken Captain serves the oil industry well. It falsely presents America's greatest environmental disaster as a tale of human frailty, a one-time accident. But broken radar, missing equipment, phantom spill teams, faked tests -- the profit-driven disregard of the law -- made the spill an inevitability, not an accident.

Yet Big Oil tells us, as they plead to drill in the Arctic National Wildlife Reserve, as Senator John McCain calls for drilling off the shores of the Lower 48, it can't happen again. They promise.

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Tuesday, June 24, 2008

 

Obama’s Chicago Boys

[Naomi Klein sent this Morphizm's way last week, but it got lost in the redesign. Let's hope Obama doesn't get lost in the woods. -- ST]

Obama's Chicago Boys
[by Naomi Klein]
Barack Obama waited just three days after Hillary Clinton pulled out of the race to declare, on CNBC, “Look. I am a pro-growth, free-market guy. I love the market.”

Demonstrating that this is no mere spring fling, he has appointed 37-year-old Jason Furman to head his economic policy team. Furman is one of Wal-Mart’s most prominent defenders, anointing the company a “progressive success story.” On the campaign trail, Obama blasted Clinton for sitting on the Wal-Mart board and pledged, “I won’t shop there.” For Furman, however, it’s Wal-Mart’s critics who are the real threat: the “efforts to get Wal-Mart to raise its wages and benefits” are creating “collateral damage” that is “way too enormous and damaging to working people and the economy more broadly for me to sit by idly and sing ‘Kum-Ba-Ya’ in the interests of progressive harmony.”

Obama’s love of markets and his desire for “change” are not inherently incompatible. “The market has gotten out of balance,” he says, and it most certainly has. Many trace this profound imbalance back to the ideas of Milton Friedman, who launched a counter-revolution against the New Deal from his perch at the University of Chicago economics department. And here there are more problems, because Obama—who taught law at the University of Chicago for a decade—is thoroughly embedded in the mindset known as the Chicago School.

He chose as his chief economic adviser Austan Goolsbee, a University of Chicago economist on the left side of a spectrum that stops at the center-right. Goolsbee, unlike his more Friedmanite colleagues, sees inequality as a problem. His primary solution, however, is more education—a line you can also get from Alan Greenspan. In their hometown, Goolsbee has been eager to link Obama to the Chicago School. “If you look at his platform, at his advisers, at his temperament, the guy’s got a healthy respect for markets,” he told Chicago magazine. “It’s in the ethos of the [University of Chicago], which is something different from saying he is laissez-faire.”

Another of Obama’s Chicago fans is 39-year-old billionaire Kenneth Griffin, CEO of the hedge fund Citadel Investment Group. Griffin, who gave the maximum allowable donation to Obama, is something of a poster boy for an unbalanced economy. He got married at Versailles and had the after-party at Marie Antoinette’s vacation spot (Cirque du Soleil performed)—and he is one of the staunchest opponents of closing the hedge fund tax loophole. While Obama talks about toughening trade rules with China, Griffin has been bending the few barriers that do exist. Despite sanctions prohibiting the sale of police equipment to China, Citadel has been pouring money into controversial China-based security companies that are putting the local population under unprecedented levels of surveillance.

Now is the time to worry about Obama’s Chicago Boys and their commitment to fending off serious attempts at regulation. It was in the two and a half months between winning the 1992 election and being sworn into office that Bill Clinton did a U-turn on the economy. He had campaigned promising to revise NAFTA, adding labor and environmental provisions and to invest in social programs. But two weeks before his inauguration, he met with then Goldman Sachs chief Robert Rubin, who convinced him of the urgency of embracing austerity and more liberalization. Rubin told PBS, “President Clinton actually made the decision before he stepped into the Oval Office, during the transition, on what was a dramatic change in economic policy.”

Furman, a leading disciple of Rubin, was chosen to head the Brookings Institution’s Hamilton Project, the think tank Rubin helped found to argue for reforming, rather than abandoning, the free trade agenda. Add to that Goolsbee’s February meeting with Canadian consulate officials, who left with the distinct impression that they had been instructed not to take Obama’s anti-NAFTA campaigning seriously, and there is every reason for concern about a replay of 1993.

The irony is that there is absolutely no reason for this backsliding. The movement launched by Friedman, introduced by Ronald Reagan and entrenched under Clinton, faces a profound legitimacy crisis around the world. Nowhere is this more evident than at the University of Chicago itself. In mid-May, when university president Robert Zimmer announced the creation of a $200 million Milton Friedman Institute, an economic research center devoted to continuing and augmenting the Friedman legacy, a controversy erupted. More than 100 faculty members signed a letter of protest. “The effects of the neoliberal global order that has been put in place in recent decades, strongly buttressed by the Chicago School of Economics, have by no means been unequivocally positive,” the letter states. “Many would argue that they have been negative for much of the world’s population.”

When Friedman died in 2006, such bold critiques of his legacy were largely absent. The adoring memorials spoke only of grand achievement, with one of the more prominent appreciations appearing in the New York Times—written by Austan Goolsbee. Yet now, just two years later, Friedman’s name is seen as a liability even at his own alma mater. So why has Obama chosen this moment, when all illusions of a consensus have dropped away, to go Chicago retro?

The news is not all bad. Furman claims he will be drawing on the expertise of two Keynesian economists: Jared Bernstein of the Economic Policy Institute and James Galbraith, son of Friedman’s nemesis John Kenneth Galbraith. Our “current economic crisis,” Obama recently said, did not come from nowhere. It is “the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long.”

True enough. But before Obama can purge Washington of the scourge of Friedmanism, he has some ideological housecleaning of his own to do.

This column was first published in The Nation

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Wednesday, June 11, 2008

 

CEOs Too Dumb to Use Computers

Late to the party today, but better late than never. I had a great spiel go up on AlterNet this morning. And it was good:

Fat Cat CEOs Too Dumb to Use Computers
Just what the hell is going on in the boardrooms of corporate America? From Angelo Mozilo's callous reply-button fuckup to chat-room lurks from execs at Burger King and Whole Foods, the nation is under attack by suits who make way too much money to know so little about how their computers work.

Let's start with Mozilo, whose Countrywide Financial Corporation has been one of the worst offenders in our housing meltdown, which is to say, our full-blown economic recession. The Calabasas, California-based lender's stock plummeted by 80 percent after it amassed nearly $100 billion in losses while servicing gamed loans and foreclosing on those who should have known better, had they only possessed enough common sense to spit out Countrywide's Kool-Aid. That was bad enough to swallow, until CEO Angelo Mozilo declared that, during this scam, he walked off with $1.9 million in salary, $20 million in performance-based awards and another $121 million in liquidated stock.

Thanks for playing, and fuck you very much.

But when it came to his computer, Mozilo couldn't buy a clue. After beleaguered homeowner Daniel Bailey Jr. sent the Countrywide CEO a form-letter email plea for a rate adjustment, a pissed-off but still filthy rich Mozilo hit the reply instead of the forward button and sent Bailey this message on Tuesday: "This is unbelievable. Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the Internet. Disgusting."

A Los Angeles federal judge's recent ruling paved the way for a shareholder lawsuit against Mozilo and other Countrywide execs. The lender can add that black eye to its already packed list, which includes everything from a class-action suit alleging overtime violations to an outcry from homeowners impacted by Hurricane Katrina alleging broken promises.

But it wasn't the reply button that screwed Mozilo; no, that honor belongs to an online forum serviced by LoanSafe.org, whose form letter Bailey copied in his plea for leniency to Countrywide. Like any clever consumer, Bailey used the internet to his advantage and posted Mozilo's boneheaded response, which caught fire on LoanSafe and in the world at large shortly afterward. Any tween or teenager alive could have apprised Mozilo of the internet's power, especially to ruin those who underestimate that power... MORE @ ALTERNET

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Tuesday, May 13, 2008

 

Pawns In The Hedge Funds Chess Game

Sorry for the late post, Morphizm pals. I've been stuck in neutral for days now, and logistics and administration have taken over my life. But I'm almost out of the woods, so look for more content in the next couple of weeks, with a dramatic relaunch perhaps in June. Speaking of drama, here's some I wrote for your mama and her devalued dollars:

Hedge Fund Titans Are Treating Us Like Pawns in Their Economic Chess Games
Recently, two important and related events occurred. The first is that hedge fund kingpin Cerberus Capital Management was considering buying Blackwater, the notoriously Orwellian security contractor that has become the scourge of Iraq and America alike. And the second event? As soon as the news was reported, the deal was killed.

Neither company, you see, likes the publicity. Plus, with Blackwater in its portfolio, Cerberus would have more than lived up to the origin of its name, which comes from Greek mythology. Yes, Cerberus is the three-headed demon dog that guards the gates of Hell.

"We do our best to avoid the spotlight," secretive Cerberus founder Stephen Feinberg reportedly told his staff in a memo earlier this year, "but unfortunately, when you do some large deals, such as Chrysler and GMAC, it is hard to avoid."

True, Stephen, true. When you bail out two of the worst environmental and economic offenders in the automotive business (and subprime debacle, in the case of GMAC), and then follow that up by looking into acquiring what passes for a private army with itchy trigger-fingers and a suspicious habit of corruption and cost overruns, well yeah, people will talk... MORE @ ALTERNET

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Tuesday, April 08, 2008

 

Fed Increases Fed Conspiracies By Being Lame

Sorry for the delay, peoples. Been working out with Wired, and I forgot to stretch. Catch-ups to come later, but for now I'm back on the AlterNet attack. Cash it in!

Over the Top Fed Actions Feed Conspiracy Thinking
Given the fact that it is the target of more than a few conspiracy theories since it was created in 1913, the Federal Reserve System, more commonly known as the "Fed," in media and finance parlance, could be acting with a bit more prudence during these dark economic times. But no, it's gone ahead and damned the depression by doing what the New York Times described as the "unthinkable": bailing out Bear Stearns while giving away hundreds of billions to banks and other institutions whose labyrinthine securitization of our debt economy started this whole mess in the first place.

In other words, rewarding the criminals and screwing the victims.

That kind of behavior is only going to make the conspiracy theorists even cozier. When you already think the Fed has made a serious living from doing everything from transferring public wealth to private hands to signing off on the assassination of John F. Kennedy, you're not going to start thinking better of them when they offload billions onto Bear Stearns, which is a securities firm and not a bank at all. You're not going to get the opposition to stop parroting the usual party lines about the Fed being a privately owned bank that screws Americans by charging interest or compromises the overall interests of the United States by unconstitutionally printing up money like it was going out of style. You're only going to further invigorate them... MORE @ ALTERNET

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Monday, March 17, 2008

 

Deep Spitz!

Back again on the Spitzer tip. (Nasty!) According to Morphizm pal Greg Palast, Eliot's mess and the Fed's recent ahistorical cash handouts are connected. I'll be writing more on that issue, with scathing quotes from Palast, for AlterNet tomorrow. But for now, here's Greg's take on the cash and ass grabs:

Getting Intimate: Eliot Spitzer and The Fed Bailout
While New York Governor Eliot Spitzer was paying an ‘escort' $4,300 in a hotel room in Washington, just down the road, George Bush's new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there's a BIG difference. The Governor was using his own checkbook. Bush's man Bernanke was using ours.

This week, Bernanke's Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks' mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers' bordello: Eliot Spitzer.

Who are they kidding? Spitzer's lynching and the bankers' enriching are intimately tied. How? Follow the money... MORE @ MORPHIZM

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Sunday, March 16, 2008

 

America's Ethical Perversity

Morphizm has stayed far away from the Eliot Spitzer hyperdrive. What is there to say? No one is innocent. Priorities are reversed. The usual. In other words, no thanks. I'll hand this one off to a rabbi, Michael Lerner of Tikkun mag, to be exact:

Eliot Spitzer and America's Ethical Perversity
[Michael Lerner, Morphizm]
Elliot Spitzer deserves to be critiqued and ought to be doing deep atonement for what he did. His previous moral arrogance and willingness when he had power to do so to prosecute others for their participation in creating prostitution rings makes him an easy target. We, in turn, might practice the forgiveness that our religious and spiritual traditions preach, particularly those of us who have been willing to honeslty face how flawed we ourselves are, and how at times we ourselves fail to embody in our actual practice with others the values that we publicly espouse. Humility and compassion are also part of the path of a spiritual progressive.

But the intensity of the critique of the N.Y. governor, tied with the demand that he resign, shows more about American society's ethical perversity than about Spitzer... MORE @ MORPHIZM

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Friday, February 01, 2008

 

Can't Pay Your Mortgage? Trash Your House

Hello, pals of Morphizm. I stepped into a hornet's nest with my new AlterNet piece about the housing crisis and the rise of arson, fraud and trashouts. It's already getting heavy traffic and impassioned comments, so by all means check in and join the discussion. Because it's a serious doozy:

Can't Pay Your Mortgage? Trash Your House and Leave
[Scott Thill, AlterNet]
On the lookout for disturbing trends? Here's one for your pile: According to a recent article in Fortune, there has been a noticeable increase in not just fraud but arson that has kept pace with the housing depression. Professionals in the insurance and lending industry are bracing themselves for all manner of similar situations, as homeowners either trash, or simply leave their trash lying around their houses, often taking off without even claiming their furniture. This is already a dirty problem in the housing business, with owners, lenders and banks having to figure out a way to stick each other with the check when tenants destroy their property on their way out the door. Woe is the person left behind to clean up the chaos.

"We just estimated a trashout yesterday where we're going to have to drain the pool," one Fontana, CA resident posted on AgentsOnline.Net, a resource and idea site for realtors, "and the stench from it when you enter the backyard is overwhelming. Then, of course there are mosquitoes all over the top and it's been sitting so long without chemicals that it's green on top and murky black on the bottom. We've already had to refuse one pool because of its really creepy condition and I'm not so sure about this one either. [I] just hope we don't find the previous homeowner at the bottom when we drain it"... MORE @ ALTERNET

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Disowned By the Ownership Class

Thank the Big Bang for brainiacs like Naomi Klein, who has been calling bullshit on disaster capitalism for years. She's also been letting Morphizm run her stories for free, a testimony to her belief in what free markets are really about. Here's her latest dose on the housing meltdown, and why it's really more of a grand sabotage:

Disowned by the Ownership Class
[Naomi Klein, Morphizm]
Remember the "ownership society," fixture of major George W. Bush addresses for the first four years of his presidency? "We're creating...an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property," Bush said in October 2004. Washington think-tanker Grover Norquist predicted that the ownership society would be Bush's greatest legacy, remembered "long after people can no longer pronounce or spell Fallujah." Yet in Bush's final State of the Union address, the once-ubiquitous phrase was conspicuously absent. And little wonder: rather than its proud father, Bush has turned out to be the ownership society's undertaker.

Well before the ownership society had a neat label, its creation was central to the success of the right-wing economic revolution around the world. The idea was simple: if working-class people owned a small piece of the market -- a home mortgage, a stock port-folio, a private pension -- they would cease to identify as workers and start to see themselves as owners, with the same interests as their bosses. That meant they could vote for politicians promising to improve stock performance rather than job conditions. Class consciousness would be a relic.

It was always tempting to dismiss the ownership society as an empty slogan -- "hokum" as former Labor Secretary Robert Reich put it. But the ownership society was quite real. It was the answer to a roadblock long faced by politicians favoring policies to benefit the wealthy. The problem boiled down to this: people tend to vote their economic interests. Even in the wealthy United States, most people earn less than the average income. That means it is in the interest of the majority to vote for politicians promising to redistribute wealth from the top down...MORE @ MORPHIZM

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Wednesday, January 23, 2008

 

Holy Freakin' Hell!

So, I'm feeling good after selling off one of my cars yesterday, ahead of what I predicted, along with every other economist or person blessed with common sense, would be a sick recession in 2008. A couple thousand in my pocket, a money pit filled in and replaced. But then I awoke to this hideous picture:



That is Apple's five-day stock graph. It had reached a high of $200 around Christmas, but has tanked, in step with the overall economy, ever since. $40 billion in shareholder value has been disappeared, Abu Ghraib-style, over the last two weeks. And that, my friends, is our economy in microcosm.

Apple had been what gold and oil are for rich assholes: A safe haven for investment during a contracting economy. But if you didn't want to feel like a jerk, investing in destruction and hoarding, you put your money in innovation. Today, that is no longer the case. Everyone is running from innovation, and banking on fear.

And whether you like Steve Jobs or Bill Gates, it doesn't matter. A dollar put into Apple and Microsoft's coffers was one taken away from the fossil fuel industry, the disaster capitalism complex, the dystopia coming our way. But the bear is fully upon us now, and the only safe haven is the one that is driving us to a very uncertain future.

Don't enjoy the ride.

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Thursday, January 03, 2008

 

Kunstler Peers Into 2008, Sees Clusterfuck

[Morphizm used to reprint James Kunstler's Clusterfuck Nation columns on the regular in Web 1.0. But with 2.0, we have to be leaner and meaner, which means no splashy mag page. But you win, as Kunstler's words are the real deal. Everything else is just a frame. -- ST]

Forecast for 2008
[Jim Kunstler, Clusterfuck Nation]
For the tiny fraction of people who actually pay attention to real events -- those, for instance, who know the difference between Narnia and Kandahar -- the final hours of 2007 leading into the fog-shrouded abyss of 2008 must induce great racking shudders of nausea. Has there ever been a society so exquisitely rigged for implosion? The whole listing, creaking, reeking edifice stands like one of those obsolete Las Vegas pleasure palaces awaiting a mere pulse of electrons to ignite a thousand explosive charges perfectly placed to blow away the structural supports.

The inertia holding everything together that I described in last year's forecast finally melted away at mid-summer and events began spooling out of control. Specifically, the massive tonnage of debt-backed securities circulating through the financial sector stood revealed for the mostly worthless bales of paper they truly are, and the investment community was left suspended in mid-air, grinning unconvincingly, like Wile E. Coyote thirteen yards beyond the edge of the mesa, with a sputtering grenade in each hand and an anvil tied to his ankles.

The whole second half of 2007 in the ranks of finance was a desperate rear-guard action to stave off the inevitable work-out. The fiasco over at Bear Stearns was instructive. Not long after two of their hedge funds blew up in August, the company announced that the funds had been chartered in the Cayman Islands and were therefore beyond the reach of official US legal machinery -- meaning, forget about lawsuits, you losers, chumps, and suckers who bought into our jerry-rigged scams... submit your complaints to the Tough Noogies desk and begone with you! This dodge might have benefited Bear Stearns in the short term, but in the long term it's hard to see why anybody would ever after cast one red cent in Bear Stearns' direction (in the life of this universe or several like it).

The summer's blow-ups were followed by truckloads, boatloads, and helicopter loads of rescue "liquidity" delivered through autumn by the Federal Reserve and other central banks in a continuing effort to allow investment houses, mortgage originators, reinsurance firms, and other companies trafficking in suspect paper to avoid declaring greater losses. Then the foreign sovereign wealth funds jumped in with five billion here, ten billion there, coming away with big chunks of ownership, but of what? Of companies with liabilities in excess of assets? Mostly, these desperation moves worked to paper over virtual bankruptcy through the crucial Christmas holiday, when yearly bonuses are doled out, which spared the boards of directors from having to explain why executives were lined up at the loading docks filling their Lincoln Navigators with stupid dope piles and knots of the shareholders' loot.

On the ground out in the heartland, in the anxiety-drenched, over-valued beige subdivisions of California and the ennui-saturated pastel McHousing tracts of Florida (not to mention the pathetic vinyl outlands of Cleveland and Detroit) a mighty keening welled forth as mortgage rates adjusted upward, and loans stopped "performing," and "for sale" signs failed to turn up buyers, and sheriff's deputies showed up with the rolls of yellow foreclosure tape, and actual ownership of the re-poed collateral entered a legal twilight zone somewhere north of the Florida State Teacher's Pension Fund and south of the Norwegian Municipal Councils' investment portfolios. What a mighty goddam mess was left out there by the boyz at the Wall Street genius desks, who engineered a magical system for eliminating risk from the capital markets -- only to see it leak back in from a million holes and seams and collapse the greatest bubble ever blown.

In the background, the US dollar sank to record lows against the euro and the pound sterling, the price of oil jumped 56 percent across the year just grazing the $100-a-barrel mark, drought punished the American southeast and Australia's grain belt, floods ravaged Texas and England, the polar ice shrank dramatically, but the US escaped any major hurricane action for a second year in a row.

Except for the murder of Mrs. Bhutto just a few days ago, the international scene was supernaturally quiet. Even Iraq fell into a torpor, variously attributed to utter exhaustion among the warring factions or to the US troop "surge" under general Petreus. Iran got a surprise clean bill-of-health on its nuclear bomb-making activity from America's own investigators, to the consternation of Mr. Bush & Co. The non-human denizens of Planet Earth didn't have such a good year. Honeybees, Yangtze river dolphins, and house sparrows took big hits, and Al Gore went up another suit size (as well as winning part of the Nobel Prize for his Powerpoint show). Which brings us finally to the heart of the matter: what's coming down the pike starting tomorrow, January 1, 2008?

Down and Dirty
I shudder to imagine how things will play out now as we turn the corner into 2008. Not to put too fine a point on it, but my little walnut brain can't imagine any scenario in which the US economy doesn't end up on a gurney in history's emergency room. It's not necessary to rehash the particulars of the Greenspan bubble-blowing disaster. The outcome is what concerns us. The web cables have been blazing for months with arguments as to what form the workout will take. There's little disagreement about the fundamentals at the housing end of things.

The housing market is in a death spiral. Eventually, the median price of a house will have to fall back to the median income, and it has a very long way to go, perhaps 50 percent. Until that happens, houses will be generally unsellable. At the same time, of course, an anxious finance sector will be offering fewer mortgages and on much more rigorous terms, so there will be far fewer qualified buyers even for distress sales. And the median income itself may soon not be what it has been. The whole equation has changed. As the painful re-pricing process plays out, many owners/sellers will be upside-down and under water in what they owe on the mortgage in relation to the value of the house they occupy. Quite a few may have lost jobs and incomes along the way. Most of these unfortunates would be better off just mailing in the keys and walking away. But in so far as these awful liabilities are peoples' homes, full of all their stuff and their childrens' stuff, not to mention being the repository of all their previously-imagined wealth, as well as their hopes and dreams, walking away is psychologically more easily said than done.

Surely in this election year, schemes will be advanced to bail out these poor suckers. But the beneficiaries of such a putative bail out would be far outnumbered by the home-owners still making mortgage payments, plus property taxes jacked up during the recent orgy by greedy public officials, and I don't think this majority would stand for the unfairness of seeing their neighbors simply let off the hook on their obligations. Perhaps the one thing that congress could do is change the insane law that treats foreclosures like some kind of bizzaro capital gain and piles additional huge tax demands on people who can no longer afford to buy their kids a frozen burrito. The issue of what to do about the dispossessed will be so politically red-hot that it could upset the election process --but I get a bit ahead of myself.

One thing the public doesn't get about the housing debacle is that it is not just the low point in a regular cycle -- it is the end of the suburban phase of US history. We won't be building anymore of it, and those employed in its development will have to find something else to do. Now, unfortunately the whole point of the housing bubble was not really to put X-million people in so many vinyl and chipboard boxes, but rather to ramp up a suburban sprawl-building industry as a replacement for America's dwindling manufacturing economy. This stratagem ran into the implacable force of Peak Oil, which not only puts the schnitz on America's whole Happy Motoring / suburban nexus, but implies a pervasive trend for contraction in everything from the daily distances we can travel to the the very core idea of regular economic growth per se -- at least in the way we have understood it through the age of industrial capital.
But to return to my point, something like 40 percent of all new jobs after the year 2000 were created in the final burst of suburban expansion -- everything from the excavators to the framers to the sheet-rockers, and then the providers of granite countertops, the sellers of appliances and furnishings, and cars to service the far-out new subdivisions, and so on. This is the end, therefore, not only of the production "home-builders," but perhaps everything from Crate and Barrel to WalMart, too, eventually.

By the way, the housing collapse was only one phase of a more generalized real estate debacle, because the commercial side of the business has also begun a nauseating slide into non-performance and equity destruction. In other words, we built way too many strip malls, power centers, and office parks. God knows what will happen to the owners of these white elephants, or the mortgage and lien holders of these things -- but as one wag remarked to me some years ago as we both gazed upon a forlorn abandoned strip mall outside of Tulsa, "...we don't need that many evangelical roller rinks...."

What happens out there on the housing market scene will certainly redound in banking and finance and whatever still constitutes the US economy generally. The fears and uncertainties surrounding all credit-backed tradable securities derive first from the millions of troubled home mortgages dangling slowly in the wind. These fears and uncertainties will multiply as defaults commence in commercial real estate, and desperate individuals next enter a wave of credit card default, all of it, too, securitized and sprinkled all over the world. None of this stuff has yet been priced into the public disclosures of the many troubled banks and bank-like companies holding it. Nor does anyone really know how this is affecting the hedge funds, and their staggering leveraged positions in things that are looking more and more like quicksand. I can't imagine that quite a few major banks will not collapse in the first half of 2008. It is hard to escape the conclusion that many hedge funds will also blow up, given the unsoundness of their counter-parties' positions, not to mention the frailty of the bond reinsurers. But the death of more than a few hedge funds could easily unwind the entire global finance system -- meaning a period of destructive chaos followed by a set of severely different institutional arrangements, with untold loss of imagined capital wealth along the way and big changes in everyday life. The world has never really been in a situation like this before and it is impossible to say what it might lead to. But there is no doubt that the American public has enjoyed an artificially high standard of living in relation to the value of what we actually produce -- fried chicken, hair extensions, and the Flaver Flav Show -- so the conclusion is pretty self-evident.

Others have said (and I concur) that 2008 will be the year that the issue of Peak Oil not only takes stage in the forefront of American politics, but pushes global warming aside as the most immediate threat to the "modern" way-of-life. There is every reason to believe that the world has arrived at its all-time oil production peak -- and some statisticians would even pin-point the exact moment as July 2006. Since then a few new and crucial story-lines have emerged to allow us to understand what is happening out there on the world oil scene.

One story-line is that only "demand destruction" among the world's poorest nations has kept the oil markets functioning "normally" among the OECD nations and the rising Asian players. Even so, oil priced in US dollars more than doubled in 2007. It remains to be seen whether demand destruction in a wobbling US economy -- with the suburban builders crippled -- will keep oil prices from jumping into the uncharted territory beyond $100-a-barrel. But two other forces are in operation now.

One is the growing oil export problem, soon to be a crisis. It now appears that exports, in nations with surplus oil to sell, are going down at an even steeper rate than production declines. Why? They are using more of their own oil. The population is growing robustly. The Saudi Arabians are building the world’s largest aluminum smelter and many chemical factories. This takes a lot of oil. Russia, another big exporter, saw its car sales jump by 50 percent in 2007. Mexico is depleting so rapidly, and using so much more of its own oil, that it might be out of the export game altogether in three years. That will be bad news for the US, since Mexico is tied with Saudi Arabia as America's number two leading source of oil imports. Remember, the US now imports close to three-quarters of all the oil we use.

The second new factor on the Peak oil scene is "oil nationalism." It is prompting countries like Norway and Russia to husband more of their own resources as the awareness hits that they are past peak and might want to keep their own motors humming further into the future. Oil surplus nations are also trending more toward selling their oil on the basis of long-term contracts with favored customers rather than just auctioning the stuff off on the futures market. This makes oil a much more important element in geopolitical power politics. Note that the US may not enjoy "favored customer" standing among many of these nations.

Matt Simmons, the leading investment banker to the oil industry, predicted at a major conference in October that the US is much closer to encountering a problem with chronic spot shortages of oil (and gasoline, of course) than the public realizes, and Simmons says that this supply problem will be extremely disruptive in every imaginable way -- economically, politically, and socially. Most of the commentators I take seriously see the price of oil oscillating in 2008 between $80 and $160-a-barrel. Simmons says Americans will keep sucking up the price increases, but they will probably freak out over spot shortages.

I have no idea how presidential election politics will play out in 2008. It must be obvious that so many nasty pitfalls lie out there in the months ahead that something's got to shake up the current scripted mummery among the contenders. The current batch of candidates will soon find their story-lines and pre-cooked messages out-of-date as the nation faces crises in finance and energy (at least). Given the uneventful geopolitical scene of the past 18 months (since the Hezbollah-Israel War and up to the murder of Mrs. Bhutto in Pakistan), odds are that the US will have more rather than less trouble from the rest of the world in 2008-- especially if our own financial recklessness trips up the global economy.

Back in the early days of George W. Bush, even before 9/11, I used to joke with my friends that Bill Clinton would return as the Emperor Bill the First. The joke doesn't seem so funny anymore with Hillary off and running. I never liked the way she muscled her way into a US senate seat -- sending the message, in essence, that there was not one genuine New York resident qualified for the job. But there is so much more about her I dislike now, starting with her presumption of dynastic entitlement to the annoyingly phony way she nods her head (like one of those old "drinky-bird" toys) to put across the idea that she is a fabulous "listener." I write this a few days before the Iowa caucuses and then the New Hampshire primary. New York's Mayor Bloomberg is suddenly making noises again about entering the race as an independent. That might lead to a situation as fractured as the one in 1860 that saw a multi-party scuffle send Lincoln into office (or the election of 1912 when Teddy Roosevelt made a credible run on the independent Bull Moose line). At the moment, I'd like to see both John Edwards and Barack Obama roll on. The mere thought of a president Huckabee gives me the chilblains, and the rest of the Republican pack I would not want to have as my county supervisor.

In any case, whoever ends up in the oval office will preside over one king-hell of a clusterfuck. In the immortal words of TV's erstwhile "Mr. T," I pity da fool who gets elected into this mess. There will be a whole continent full of bankrupt, re-poed, and idle former WalMart shoppers, many of them with half of their skin tattooed and many of that bunch all revved up to "roll heavy and gun up" against the folks who screwed them.

Which leads me to my penultimate observation of the moment: 2008 will be the year that celebrity wealth goes into hiding. A land full of people crying into their foreclosure notices will take a dim view of the Donald Trumps and P. Diddys luxuriating out there and may come looking for scalps -- though in the case of Mr. Trump they'll be sorry they woke up the wolverine that lives on his head. Basically, though, I'm not kidding. Conspicuous displays of wealth will be so "out" that Mr. Diddy might take to club-hopping in a 1999 Mazda. Lindsay Lohan and Paris Hilton may have to double-up living in a minuteman missile silo to keep the angry mobs of fans-turned-vengeful-berserkers away.

Okay, my final comment. After being chastised endlessly about mis-calling the DOW in 2006 (I said 4000), I have learned my lesson about making numerical predictions for the stock markets. So let's just say there is no fucking way that the DOW, the NASDAQ, and the S & P will not end the year 2008 absolutely on their asses. The charade of permanent prosperity based on getting something for nothing is over. That sound you hear out there is reality knocking on the door. It has been standing out in the cold for a long time and it is not happy with us.

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Tuesday, January 01, 2008

 

Economy 2008: It Will Suck.

Regarding the financial dimension of my previous post, the bean counters are weighing in. The prevailing view is that things will totally blow:
"We are at the brink of a recession," Standard and Poor's senior economist Beth Ann Bovino told CNNMoney.com. "We are certainly concerned."
But of course Goldman Sachs, tight with the Bush administration and recently escaped from the subprime collapse, thinks that things should be great. Thanks to what? More Fed cuts. Ask Abby Joseph Cohen, Goldman Sachs' chief U.S. investment strategist:
Cohen thinks the economy will not slip into a recession. And one big reason for her optimism is that she thinks the Federal Reserve is likely to keep lowering interest rates in order to make sure the economy doesn't grind to a halt."
Of course, Cohen neglects to mention that it is the drastic lowering of such rates over the last several years -- an era the neocons refer to as "post-9/11" -- that led us to the brink of recession in the first place. The dollar, and the United States it belongs to, has yet to recover.

At least for some. Let's not forget that some made out like bandits before the subprime collapse. Like Goldman Sachs, for one. In other words, expect the American empire economy to recede like mad in 2008. But expect those you spent 2007 hating to unfold the golden parachutes with ease.

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Wednesday, December 12, 2007

 

The Biz Debuts! Dollar Dead, Paulson Dirty

Greetings, money lovers. As you know, Morphizm has been digging with a ferocity into economics over the last couple of years, mostly because we need to make more money. And we haven't been great at it, but we haven't been as bad as Wall Street, which is tanking so hard that it may never regain its superpower stature. In honor of our very educational research, I've christened a new business news section called The Biz, with my favorite graphic of Bush flipping off a crowd he's not doubt boring to death with lies. It's beyond apropos.

For The Biz's auspicious debut, let us consider the possibilities that the dollar may be dead by 2009, and U.S. Treasury Secretary Henry Paulson is as dirty as they come. Cash out!
Mortgage Meltdown: Bankers pay lip service to families while scurrying to avert suits, prison
[SF Chronicle]
The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process. And, to be sure, fraud is everywhere. It's in the loan application documents, and it's in the appraisals. There are e-mails and memos floating around showing that many people in banks, investment banks and appraisal companies - all the way up to senior management - knew about it...MORE
Lukoil May Switch to Oil, Gas Sales in Rubles in 2009
[Bloomberg]
Russia's largest independent oil producer, may start selling crude and gas in rubles within two years as the U.S. dollar weakens...The dollar has dropped 10 percent against the euro this year, reducing the value of exports by oil-rich nations. The weakness against the ruble has eaten into profits at Russian companies, whose costs are denominated in the local currency...State-run OAO Gazprom, the world's largest natural-gas producer, has said it's also considering moving to rubles from dollars and euros. The company hasn't given a timeframe.

...Saudi Arabia, the world's largest oil supplier, fought off an attempt last month by Iran and Venezuela to get OPEC to discuss pricing oil in different currencies rather than in dollars. Six Gulf Arab states will discuss a proposal this month to revalue their currencies against the U.S. currency, the secretary general of the Gulf Cooperation Council said in November...MORE

Better start stockpiling those euros!

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Tuesday, December 11, 2007

 

Why We Are Totally Screwed

UPDATE: Morphizm's pals at The Huffington Post have syndicated this post there. Dig in, and join the discussion!

I'm not the only one who thinks that the Bush administration has been playing with the markets ever since 9/11, when a series of terrorist attacks destroyed New York's nerve center for international finance, the World Trade Center. And if you think it's suspicious that planes nailed the towers while missing other empty symbols of American power like the Washington Monument or the White House, you're not alone. But that is for another, more controversial essay.

Suffice it to say that the Bush administration may seem incompetent, but they are fundraisers par excellence. It's certainly no mistake that the Fed lowered their funds rate to practically nothing under Bush and Greenspan, paving the way for the Great Hedge Funds Fuckover of the New Millennium, which I covered in depth for AlterNet here and here. And now that Greenspan's successor Ben Bernanke has come out and cut another quarter-point off, expect the trend to continue. The Fed's action and Bush's recent plan to bail out subprimers share something significant in common: They will have zero effect of the problems the American economy faces hurtling into 2008. Just in time for the election!

Of course, I could give a long, Thillian (new word!) spiel on why Bush's subprime plans sucks ass, but why? I've got a stone-cold economist and a brainiac doom prophet to handle that for me. And you. Thank the Big Bang for the internet:

Spirit of the Season
[Jim Kunstler, Clusterfuck Nation]
"The Hope Now Alliance is just a political sham. The purpose of it is not to save the hapless occupants of over-leveraged houses, but first to buy a little more time so that the worker bees in the financial industry can justify awarding each other multi-million-dollar Christmas bonus packages, and second, to postpone the 'workout' of all this bad investment as far into the future as possible...Maybe all the players really know that keeping the ship afloat until Christmas is really the best they can hope for. Christmas means a lot in this country. It represents all Americans' old hope that miracles can happen. Bums turn out to be Santa Claus. Old curmudgeons are transformed overnight into loving uncles. Angels save us when we jump despairingly into icey torrents. And Goldman Sachs executives pass out multi-million-dollar checks to the wizards who 'innovated' an ingenious way for the rest of their country to commit financial suicide." MORE

Henry Paulson's Priorities
[Paul Krugman, Common Dreams]
"Mr. Paulson’s attempt to help investors, while doing little or nothing for distressed and defrauded borrowers, might make sense if his plan would reduce investor losses enough to seriously improve the overall financial situation. But only a small fraction of subprime borrowers will qualify for relief, and many of these borrowers will eventually face foreclosure anyway. So the plan is unlikely to reduce overall mortgage-related losses by more than a few percent, at most - not enough to make any real difference to financial stability. Indeed, interest-rate spreads that have been signaling a crisis of confidence in the financial system didn’t narrow at all when the plan was announced. Still, you might say that the Paulson plan is better than nothing. But the relevant alternative isn’t nothing; it’s a plan that - like Barney Frank’s proposal - would actually help working families. And that’s what the administration is trying to avoid." MORE

As long-winded as I am, I am also in love with short answers. And they are always around, even in labyrinthine mechanisms like CDOs and SIVs and other acronyms for upper-class scams. So let's be frank about this: The subprime trend was built to sell heavily structured loans to suckers in order to skim bonuses off the top, buy mansions for the suits who retire comfortably while the rest of the economy, and its suckers, suffered the negative billions in blowback. That is it, that is all.

Bush's plan to fix the problem amounts to little more than dampening the impact for the suits, while screwing their victims. Why would he want to help people without any money to begin with, especially after he asked them to go back to shopping after they saw planes and bodies fall from the sky? He knew then, as many of us did, that the global economy had changed to the extreme, and that the attacks on 9/11 were vast evidence for that transformation.

But the lone gunman theory works nicely when people just want to cruise the mall, and pretend that oil (or ice, for that matter) will be around forever. That those who supply them with "the gas," as it was called in the great sci-fi dysoptia The Road Warrior, are not the same people that bankrolled their doom.

No, Bush and Paulson, once the head of Goldman Sachs -- who managed to escape the subprime collapse with nary a scrape -- are no good at fixing things. They are only good at fucking them up. For the suckers, that is. For everyone else? They're gold, baby. Black and otherwise.

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