Wednesday, July 23, 2008


Jim Kunstler is on a rampage again:

...Among the many developments in the story last week was the solidifying consensus that the nation is in really serious trouble, and the noticeable slippage of legitimacy among those pretending to run financial affairs. The howler of the week was the Securities and Exchange Commission's edict that Wall Street sportsters would be prohibited from trafficking in so-called "naked short" sales against a cherry-picked bunch of 19 banks and financial companies for the next two weeks. A cute trick, naked shorting is done by pretending to borrow a bunch of stocks, pretending to sell them high just before the share-price falls, pretending to buy them back at a lower price when the share price has fallen, and then pretending to return exactly the same number of lower-priced shares to the lender, pocketing the difference...

We looked at the crime of naked short selling - and how it has been ignored by the SEC for over a decade in Something to Ponder. The unraveling we are seeing in the financial markets is amazing and Jim Kunstler adds his typical fury and bile to the story.

What absolutely stuns me, though, is that it seems every single choice being made, every action taken by the elites, is nothing but short-sighted and guided by greed and parochialism. I don't use the term "elites" as a disparaging moniker - a nation is only as strong as the political, educational and scientific elites it produces. This current crop running the big circus inside the Beltway has got to be the most feckless, corrupt and incompetent bunch seen on the banks of the Potomac since the Civil War era.

The masses of the United States are slow to anger, but once the socionomic balance tips towards rage, when the educated sliver of the public realizes just how devastating the coming debt tsunami is going to be, the results are going to be like nothing seen in U.S. politics and society in over 232 years. We honestly could be looking at a Second American Revolution in the sense that politics will not be the same this time next year (in my opinion and bearing in mind my relatively lousy track record at predicting events).

Enjoy this wonderful summer lull. The markets are still holding up. Real progress is being made between the Israelis and Syrians and between the U.S. and Iran. If we can get the bigger flashpoints damped down before anger fills every corner of the political system, hopefully we can avert a global military catastrophe.

Pause for a sunset. Smell a flower. Gather up a stock of good books. Reconnect with old friends and family. I give us until roughly October or November before reality really begins to sink in.

No comments: