Here's a whopper of a story that is getting next to zero play in the MSM: Bloomberg has won it's lawsuit to force the Fed to disclose what banks got our money. Court Orders Fed to Disclose Emergency Bank Loans.
The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg's lawsuit is allowed to proceed unchallenged, let alone if any of the "Audit The Fed" measures are actually implemented.
Oh my. Nothing like a call for transparency to get the banking mafia to pull out the big guns. How would this "systemic collapse" occur? The lame banks that needed our money last winter would be compromised in the eyes of the public. This, according to the defendants, would spark bank runs on these lame institutions and allow those that did not take Fed money an unfair advantage. And yes, I almost gagged while typing the word "unfair."
Does the distorted reality here need elaboration? On Planet Socialism for the Rich, Capitalism for Everyone Else - the prime horror is the revelation that solvent banks exist. My God! Some banks didn't need taxpayer bailouts! How dare they!?!
Also, it doesn't occur to these sharks that maybe depositors ought to remove their cash from the greedy, myopic institutions that wrecked the economy. It is, in fact, wise. If the system can't survive Bank of America going belly up then we'd better fix the system...not save BofA from its corrupt business practices.
The threat of "systemic collapse" is bogus. Why? Because the system is already collapsing. As well it should. It's a car wreck in slow motion, but it's still a car wreck.
A system in which the rich get rewarded for failing because they hold an imaginary gun to our collective heads should fail. A system of wealth conjured with computer screen dollars should fail. A system that must grow regardless of realities on the ground should fail. A system dependant on people spending money they do not have should fail. Its failure ought to be welcomed, not avoided. Our system now is abnormal. It's like a Beverly Hills matron who's had too much plastic surgery. Everyone with any sense sees mutilation - but she gazes into the mirror and casually wonders what part of her face she should cut up next.
Let the system fail. Spray the disinfectant now before the house we all live in rots further.It will be messy for a while, but what emerges will have a chance of being reality based.
Peak oilers have been a favorite "go to" bunch for me. The basic theory being that the world is peaking in oil production and the downward slope is coming - or already here. This will produce chaos as the world as we know it is predicated on oil. This world will end, producing winners and losers galore along the way.
Plenty of smart people believe this - and I am not in a position to doubt them. I DO doubt them here and there but only because doubting is a good habit to nurture.
Whether or not the Peak Oil crowd is precisely correct was always less interesting to me than the context of the theory. Peak oil theory filled in gaps left, well...gaping... as I watched the Cheney/Bush Administration years unfold. The Iraq invasion makes sense geopolitically when one absorbs the potential reality of oil depletion, and the natural competition with China and others for the oil that's left. Of course, other reasons also make some sense, just not enough to warrant the scale of the war. We are there so that the Chinese are not, to simplify things brutally.
Mr. Cheney said "The American way of life is not negotiable." This statement being his decades late response to Carter's attempt to warn us about energy in the 70s. Cheney, we can observe now, meant what he said and backed it up.
At any rate, Mr. Obama has back loaded our withdrawl (changing his stance on Iraq, yet again). 50,000 troops will be there until the end of 2011. This makes his plan no different than Bush's. If the country continues to settle down, 50,000 is plenty if the prime objective is protection of the oil trade. If those 50,000 are withdrawn in December of 2011, I will, as they say, eat crow. Until then the Bush/Cheney/Obama plan is going exactly as planned. The Obama "leg" of said plan being focused on controlling Afghanistan.
Now the price of oil has collapsed. So where does this leave the "peak" crowd? On the face of it: It leaves them being wrong. This I tend to doubt. Gold and oil may be the only good bets out there right now.
The "growth" here is based on oil. When "oil growth" stopped (and viable light crude did essentially STOP being discovered decades ago.) a system of conjuring wealth based on credit went into to full swing. This hallucinated wealth gave us the economy that is now in a nose dive.
So what about oil? Last summer $147 per barrel, $40 today. What to make of it? The geology of oil has not changed. No new big fields have been discovered. What has changed is that the hallucinated economy ended rather abruptly on September 15th when Lehman Brothers caved in...taking billions of "petro" dollars with it.
The frantic attempts to save AIG and the big banks is an attempt to restore credit - not reality.
This assessment could be off. Yet, I find no other context in which these events make sense. I'd like to. Badly.
"Capitalism is dying!" is being yelled from the rooftops hither and thither. That simply is not true. The credit based economy is dying. The false concept that one can create sustained wealth divorced from energy reality is dying. Globalization is dying. The economy does not use energy. Energy is the economy. It is what we produce with, how we eat, and how we move.
Those creative types that "make a better mousetrap" will still be around when the dust clears. And might actually garner some of the respect now lathered on NBA stars and dime a dozen actors. Entrepreneurs will find a way in the real economy or, barring the advent of one, the black market.
As has been my theme of late, I say Let the credit based hallucination die. Much of our pain has come and will continue coming - in the vain attempt to re-create the hallucination recently ended.
Obama gets no love from me. But he is in a near impossible situation. He is beholden to the people least likely or able to accept a new order, and he promised the moon to the rest of us.
Oops.
Finally for tonight, when the end of credit plays out in the farm belt, the men, as they also say, will be separated from the boys. I predict "going local" will be forced on us within a year or two.
Bye Bye:Health care reform gone for now. This means it is gone forever. And yes, I mean forever. Project politically and fiscally and do the math. 2009 was the last chance for the U.S. to get up to speed on health care. Obama and the Democratic weenies have thrown another liberal agenda item on the ash heap along with FISA and public financing. Obama is an errand boy sent by grocery clerks to collect a bill. It looks more and more like what he we be "collecting" is the social safety net and the banks. The former to destroy, the latter to centralize. So far, the grocery clerks have themselves a good hire.
