Tuesday, September 23, 2008

Bankers More Hated then Lawyers?

One aspect of the current financial debacle that might make some happy is the very real likelihood that bankers will become even more hated then lawyers. Of course, that's only good for lawyers and is bad for bankers, but then, that is the least that bankers deserve.

Bankers should count themselves as lucky if people only hate them. By bankers, I mean mortgage lenders. Or anyone involved in 'repackaging' bad mortgages into 'securities'.
Maybe I'm being too harsh on these poor guys.
These are just bad guys. Everywhere you look, you can see bad behaviour. Even big 'normal' banks like Chase were involved in irresponsible (and I think, criminally negligent) loans. If Chase is doing it, there is not doubt that everyone else was too. It was simply too big a pie for these greedy bastards to resist.
Am I sad to see poor old Lehman Brothers and Merrill Lynch get crushed by their own incompetence? No, their egos and pay checks were too grotesquely large for me to have any empathy for them.
And now Paulson and Bernanke want 700 billion (who are we kidding, the real number will be way north of one trillion) to fix this mess, no strings attached. They tell us we need this because the system is just, 'too big to fail'.
They have not said it yet, but they really are selling this as the only way to avoid another Great Depression. The problem (well, one of the problems) is that this is what Bernanke has dreamed about, to be the guy who gets it right this time and saves us all from another depression. Don't mess with a boy and his dream.
I am not confident that their plan will work because the greedy bastards that got us into this mess will be the ones 'we the people' will have to deal with to get through it and based on their performance so far, I think it likely that they will just grab for the money. They will sell 'we the people' bad mortgages for much more then they are worth. They will add fees and other hidden costs to get every last dime for themselves. And when it is all said and done, they will buy new politicians to deregulate some other financial sector and start all over again.
But wait, say it does work, we stabilize the financial sector and it does not crumble. What do you think will happen next?
Taxes skyrocket.
It's very simple, this mess we are now in was completely foreseeable. I started to realise the implications when my wife and I bought a home in Texas in 2001. I saw that it was way too easy to get a mortgage and I looked around and saw a lot of people with sketchy finances getting really sketchy mortgages. I'm not an economist and even I was able to see it.
So why do taxes skyrocket?
Confidence in America will crumble. President Bush has been working real hard in chipping away at our standing in this world and this crisis will be the last straw. At this point, who in their right mind would invest in this country? We throw a trillion dollars at a useless war, we throw a trillion dollars at bad mortgages, really, who wants to be around that kind of stink?
So then all those other countries that have lent us all that money to buy all that junk will start wanting their money back. And that will cause a run on the bank. But in this case, that bank is the United States of America, or 'we the people'. So to pay that bill, we will need to pay a boat load in taxes.
This storm hits before Christmas season when all the retailers make most of their money for the year. But Americans are stupid (that's what got us into this mess) and may not fully appreciate the magnitude of the catastrophe. In which case, this will be the last Christmas for a long, long while. Might as well live it up one last time, right? But if we do wake up, them Christmas won't be much fun this year. It will look like a dream compared to what 2009 will look like. And that will be a cake walk compared to 2010. And 2011, well, I think I'll stop there, lest I get depressed.
The main problem is that we are just tapped out, there is no more money and we will soon be at the end of our line of credit.

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