At the G20 Summit in Toronto last week, the major accomplishment was the agreement on the ”Toronto Consensus”, which proclaimed in light of the Tsunami of fiscal stimulus hosed into a river of existing, and backlogged promises to spend, these leaders of the world, seemed surprisingly relaxed in uttering in chorus, the famous Oliver Hardy line, ”Now here’s another NICE mess you’ve gotten me into.”
”Honestly, this is more than I expected,” German Chancellor Angela Merkel acknowledged. The major economies have agreed to act in concert to cut their deficits in half by 2013, and then to stabilize or reduce their debts as a percentage of GDP by 2016. The most that had originally been expected from the weekend was some kind of process toward a hoped-for agreement in Seoul this November. Instead, we have that agreement.
Stan Laurel as John Maynard Keynes might actually agree, or apparently he did on his deathbed, in confiding to economist Henry Clay that only Adam Smith could extricate Britain from its postwar mess.Damn those Fabians with their mesmerizing illusions.How we let those practitioners of the ”dismal sciences” take over our song and dance routines is anyone’s guess. Now all thats left of the Keynesian and London School of Economics delusion is the debt, which is real, and its famous Keynesian premise that, in the long run, it doesn’t matter because we are all dead.
The magnitude of Keynesian economics, and at this point its inability to create ”velocity” with all the deficit spending has frightening similarities with the Ponzi scheme of Bernard Madoff. You can call it the ”Pinnocchio” theory of economics. Money is conned into the system, a portion of which is spent, swindled and stolen again, almost as a derivative product, and the rest is to be repaid at some unspecified future date…..like when he gets out of prison. And we know how all the Madoff/ Allen Stanford schemes end. With Keynes the fresh cash is coerced in legalized form and then lent out into the economy using legitimate cash as ridiculously minimal reserve requirement that would make even the most rapscallion and rogue banker wince with pangs of conscience. The pretexts, follow in the line of the John Stuart Mill liberalism in that we need the new loot to spend on aiding the poor, multiculturalism, reducing the debt of the money third world countries already owe us and so on. If Jamaican drug ‘ house of lord’ Christopher Dudus Coke, no irony intended, is prepared to dress as a women to avoid detection for showering the East Coast with ganja what extremes will the Bernanke and company’s ”shower posse” of cash be willing to do to offer some plausible explanation for their own behavior.
If Ben Bernanke , of ”helicopter Ben ” fame is prepared to jettison bags of cash from the Starship Federal Reserve, we will need alot more ”fake lakes” at the Toronto Summit to act as tailing ponds for the residue and waste. Except, Ben may be dropping the loot in a precision bombing operation; that is onto the terraced lawns and gardens of the ultra-wealthy who are hoarding it. maybe. Rainy day money.However if this pile of oil soaked rags ever ignites it may be a bonfire of the vacuities, according to Peter Hodson of Sprott Asset Management in the Financial Post.However, empirically, Seeing is believing.
Curiously, all these fiscal manouvrings seem to borrow mightily from the aesthetics of a bra flashing whiskey, guzzling antics of Lady Gaga than sage and lucid policies people like the Black Bra, I mean Blac Block are so willing to disrupt what seems to be a kinky lingerie business and show and tell. Perhaps the Black Bloc could take some fashion tips, on the basis of Mark Rothko black period meets Gaga. At the G20 the show and tell is an old story, in they continue to try to make the public believe in mythical novel ideas….like unicorns. They claim they exist , but they just haven’t been able to produce one yet. Socially, they have referred all charges of racism and white liberalism to this panacea known as ”the new white meat” and an ”excellent source of sparkles” .
”The deflationary tendencies of the 1930s were finally fully expunged from the economy, and we beat the bad guys. Later on, Milton Friedman described this kind of transaction as the functional equivalent of a “helicopter drop” of money, and after Ben Bernanke mentioned this in a speech in 2002 he became known as Helicopter Ben. Now he’s finally living up to the name.* Will it work? In the sense of fending off deflation, yeah, this should have an impact. But the finanworld and America’s position in it are more complicated than in the 1940s.”
As a piece of encouragement to all anarchists of the more peaceful ”Ghandi” variety , the keyboard may be more powerful than the sword tactics used by the Bakunin and Alexander Berkman inspired brethren. An alcoholic British oil trader, Stephen Perkins went on a drunken binge and sold oil futures. So many of them he sent the commodity to its highest price in eight months. In a drunken blackout he single handedly dominated the market for one night accounting for 70 per cent of all trades, sparking a spike in the price; he then called in sick to work, and then unwound the rest of his positions which launched a fall in the price of a barrel by ten dollars. He claimed ”a limited recollection of events” .
Goldman-Sachs, the favorite whipping boy as opposed to men , of the Left is undergoing a Public Relations makeover.Its the Pinocchio Theory in action: ”What kind of media campaign should Goldman Sachs (NYSE: GS) embrace? Some at the troubled firm think that Lloyd Blankfein (Lloyd Blankfein news) ought to go on Oprah. New York magazine even offers a picture of Blankfein’s face on Tom Cruise’s body, jumping up and down on her couch. That’s likely not going to happen. But it’s no secret that Goldman Sachs has been pondering what sort of PR moves make the most sense right now. It appears that executives are now willing to talk about this. One, according to media reports, has acknowledged that the firm’s image has “gone retail,” given the high-profile hearings and negative press. But while they are reaching out to customers, we still have to wonder what exactly is the firm doing to combat public perceptions.” ( fiercefinance.com ) Some previous ”outreach” initiatives made visitors pay for their coffee….If Goldman was simply too big to fail, why were they selling complex housing related investments designed to fail? Obviously, it was something in the unicorn meat.
”Furthermore, it has been reported, the company had helped the Greek government to get around EU rules, allowing the country to continue overspending while hiding its debt. And it was revealed that Goldman was an underwriter and an investor in the vast refinancing of the troubled Lloyds Banking Group late last year – a potentially dangerous conflict of interest. Emails from the bank which have been made public revealed Goldman in an even worse light, as executives boasted they were making ‘serious money’ while millions of homeowners were plunged into misery by the housing crash.
In one email, U.S. chief executive Lloyd Blankfein admitted that the bank had gambled on the market falling – even though this appears to contradict earlier denials by Goldman Sachs. ‘Of course, we didn’t dodge the mortgage mess,’ his email said. ‘We lost money, then we made more than we lost because of the shorts,’ referring to the practice of shorting, or betting against an investment. Another email, from Fabrice Tourre, said the money-losing investments he sold were ‘like Frankenstein turning against Frankenstein’s monster’. ( dailymail.co.uk. Zoe Brennan)
Like the play ”Twelve Angry Men” , the odds look grim for the protagonist Lloyd Blankfein, but as in the Reginald Rose play, we know a single dissenter will arise to sow a seed of reasonable doubt. After all, we are led to believe by the erudite members of the Seante banking committe; the Levins, McCaskills, Pryor’s and so on, that the security of middle class America is endangered and condemning the criminal would condemn us all to abandoning the American Dream.
Blankfein on Capitol Hill is more an examination, of the diverse group of accusers acting as jury. Like in the film, they are all uncomfortably brought together to deliberate after hearing the ‘facts’ in a seemingly open-and-shut case in which the spirit of the law and technical legality as been breached like a pathological rapist. Except here the murder victim is the public, or a large element who were induced to own homes they later regretted. Except here, there is no pretense for a just verdict; the accused must be allowed to go free, and even the probational reprimand is conditional.
On another level, the Senate hearings are a tragic farce. Blankfein’s demeanor does bear some similarity to Pee Wee Herman,given the duo’s effeminate mannerisms and quirky facial expressions. Listening to Blankfein’s testimony does create a bond between the childlike delivery, yet adult innuendo in them both. With a little imagination, Goldman-Sachs is a Walt-Disney reproduction of Pee-Wees Playhouse. David Letterman once said of Herman, that could be applied to Blankfein, “What makes me laugh…is that it has the external structure of a bratty little precocious kid, but you know it’s being controlled by the incubus — the manifestation of evil itself.” Whereas Herman was arrested for obscenity of the graphic variety,masturbating in a public theatre, Blankfein and companyhave also been playing with the tool; the tool of the financial system, snowing the public on a theatre of national and open air proportions, and according to Matt Taibbi of Rolling Stone, intentionally creating the financial melt-down, for their own interests and those of their major clients.
6:43pm – Mr Blankfein plays down Goldman’s size, explaining that its $800bn balance sheet is relatively small compared with the big commercial banks.
6:06pm – Sen Kaufman wants to know if Goldman’s proprietary trading ever poses conflicts of interest and, like Mr Levin, wants to know why it is OK for the bank to be selling and shorting CDOs. “If we have pools of securities in our inventory, and we are trying to reduce our risk, we are going to be selling those,” Mr Blankfein said…. “Goldman Sachs has turned itself into its own client and taken advantage of its relationship by doing what you did in so many of these cases. You took things in massive amounts from your own inventory, sold it, and then bet against your own sale. That is what is so troubling to me.”
7:49pm – With some final fireworks, Mr Levin accuses Mr Blankfein of only losing money on the ACA deal because it couldn’t sell its long position. Mr Blankfein, said that he was missing the point. Next, Mr Levin is grilling on the CEO on how it could receive $2.5bn from AIG that it had received from Tarp money.
“The US government decided to allow AIG not to default,” Mr Blankfein said. ”If they had not paid us the money we would have got it from an insurance company, and it would have defaulted.” The argument is going in circles, with Mr Levin asking why he didn’t go after the money from an insurance company. Mr Blankfein explains that such a scenario could only have happened if AIG defaulted.”
After this is all over, and a bit of legislative window-dressing draws the curtains to close, Pee Wee and Blankfein and go back to the basement and do whatever impulses arise in their den of iniquity. Obviously, we will still be far from a stable, rational and loving world and many will still fear the day of financial doom and insecurity much like those in the Middle Ages feared the devil and plague, and whatever boogymen or boogypeople can be resurrected in newer and more compelling forms.
Blankfein and Ben Bernanke exhibit unconventional behavior that falsely preaches a golden age, a millennium, a paradisical way of life which obviously menaces the frail structure of a society that cannot hope to understand since they are so removed from it. Their work has made breaches in society through which anxiety can sluice; which transmutes into action, which ultimately means as ever, war, violence, brutality and repression and more of the potential for confrontation that these economic summits are producing.
Not surprisingly, Bernie Madoff has been blaming his victims and is generally regarded as unrepentant. An article by New York magazine’s Steve Fishman, who draws heavily on interviews with Madoff’s fellow inmates, portrays Madoff as a prison “celebrity” who is “past apologising” for his crimes. He does maintenance work for 14 cents an hour, shares a dinner table with an obsessive-compulsive criminal named Muscles and pays a fellow prisoner to do his laundry for $8 per month.
“Fuck my victims,” Madoff is alleged to have declared at one point. “I carried them for 20 years and now I’m doing 150 years.”The 71-year-old former Wall Street stalwart claims little old ladies insisted on re-investing their proceeds when he tried to pay them out with healthy interest. He maintains that the whole fiasco has been “a nightmare” for him, telling investigators: “I wish they caught me six years ago, eight years ago.” “People just keep throwing money at me,” Madoff reportedly told a prison consultant. “Some guy wanted to invest and if I said no, the guy said ‘what, I’m not good enough?'” Amusingly, the Wall Street trickster is said to have offered his services as a clerk helping to look after the budget for certain prison work activities….”