Monday, 22 September 2008

Paulson Bailout: Don't buy that rope

Ropes and cows

Note: Some sources of the ideas and opinions in this blog appear below the text, there are no links in the general opinion piece itself.

One must not be the one to gloat over serious issues but it does remind me of a story that I sometimes tell to illustrate a point we fail to see when we are to make big decisions.

A young man went to confession having battled with his conscience for longer than he could bear.

Supplicant: Father, dear Father, bless me, I have sinned

Confessor: Be at peace, my son, what have you done?

Supplicant: I stole a rope.

Confessor: Hmmm!! [He pauses in meditation then asks] Was anything attached to that rope?

Supplicant: A cow

The facts beyond the talk

It may be a cow, a bull or something completely unexpected; the fact is the confessor could have absolved the supplicant of the offence of stealing a length of rope not knowing that a good tug on the rope would bring a resounding Moo! From the other end.

How many times have we been sold rope believing that was all there was to it, till the cow stirred and dragged us across the field, we having played mock prisoner binding our hands in masochistic revelry?

But there is too much evidence before us of ropes attached to cows, Iraq being a case in point.

The rope about Iraq

The Americans were sold the idea that Saddam Hussein was in cahoots with Al Qaeda, he was culpable in the 9/11 attacks and constituted a great threat to American national security and interests.

They were going in with overwhelming force to liberate the Iraqis who were going to come out onto the streets singing Hosanna! – Bull!

After 5 years, America has lost more men in Iraq than they lost in the 9/11 disaster and people still seem to be cajoled with the idea that President Bush has prevented another attack on American soil – well, give me a break, the terrorists do not need to create some great logistical spectacle in America, they have a ready supply in Iraq and Afghanistan for a lot less planning and expense.

However, the issue here is, of all the money that has been expended on the Iraqi war a good deal of it has gone into American contract firms who are minting money like it is going out of fashion.

The war has been shamelessly privatised whilst American families back at home blinded by the rope story receive the sadness of their dead sons and daughters, the wounded in spirit, soul and body, meanwhile on a staple diet of rope someone else is running away with the cows.

The parallel between Iraq and the suggested financial bailout of banks should not be lost on anyone.

Running off with the cows

We have a great financial disaster brought on by the greed and sleight of the private sector that jettisoned the basic tenets of trust, integrity, truth and verification for the quick wins of bonuses, profits and an unending supply of gullible customers persuaded of their false wealth.

The customers were being fed rope whilst the bankers ran off with the cows, now the people have tugged on the rope and found that they are being dragged bound and gagged into the abyss – no respite in sight.

Meanwhile, the bankers having found that they have no more cows to fool others with rope have suddenly run out of business and all their models are collapsing around them – only today, the whole concept of an investment bank was completely obliterated from the financial landscape of the United States as Goldman Sachs and Morgan Stanley changed status to holding banks.

This is bad rope, seriously bad rope

But the worst case of rope is happening before our eyes, the Treasury Secretary who at one time lead Goldman Sachs now wants all the dead and rotten cows that the banks once touted as prime stock put in a pit somewhere to create some sort of fertiliser in the future – wishful thinking.

These dead cows are liabilities that have a conservative estimate of $700 billion and really no one knows how long the rope would be, but anyone who has a head had better pause for deep long thought like the confessor and find out what is at the end of the rope.

Cows, you can almost tame, however, methinks the rope has been surreptitiously place round the neck of a sleeping leviathan – the markets that were fed rope at the end of last week creating a rally of the markets have suddenly started tugging on that rope and I think some of them have cottoned onto something.

He meant quick and dirty

Mr. Hank Paulson must be playing with words here; we all know that nothing that is quick can really be clean – he has offered a quick and dirty solution and wants the Congress to sign off the rope without tugging at the rope to find out that it is attached to a beast in slumber.

Besides it is completely disingenuous to engineer an outrageous confidence trick then try to persuade everyone of its legitimacy by encouraging others to play the same tricks, it is brazen in its execution as it deigns to cajole with a face of respectability.

I am not buying that rope and I hope anyone else being offered that rope gives it a right old tug prepped with running shoes and a good gun because you might be familiar with the sounds of a mooing cow, I doubt if you have ever heard the sound of a leviathan.

Sources

USATODAY.com - Poll: 70% believe Saddam, 9-11 link

iCasualties: Iraq Coalition Casualty Count

Iraqi Body Count

What Does Iraq Cost? Even More Than You Think. - washingtonpost.com

The $1 trillion question: Will this gigantic bailout work? - Business Analysis & Features, Business - The Independent

US bail-out plan provokes doubts

Paulson: Plan Needs To Be "quick" And "clean", By Patrick O'Connor - CBS News

Credit Crunch Blogs - akin.blog-city.com

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