I'm up at nothing o'clock in the morning because I just watched The Daily Show and then Countdown, having read my favorite news site -- Matt Savinar's www.lifeaftertheoilcrash.net -- somewhat earlier in the evening... and now I can't sleep. I'm wondering what on Earth will happen in the next few days. Here's the reassuring can-do song of the Wall St Journal, as sung by one Jason Zweig, whose column is called "The Intelligent Investor."
"[W]hen you spend time studying the Crash of 1929 and the depression that followed, what stands out the most is the dearth of doomsayers. Even Roger Babson, the economist known to posterity as 'the man who called the crash,' did no such thing; he forecast only a 15% to 20% drop, not the apocalypse that actually occurred. Depressions start not when lots of people are worried about them, as we have today, but when no one is worried about them, as in 1929."
Never mind the question of whether "no one" expected the madly speculative capitalism of the 1920's to go bust (Lenin, for example, does not seem to have been terribly surprised; nor was Joe Kennedy the bootlegger, who gamed the hell out of the system, pulled his money out just in time, and got appointed by FDR to create the S.E.C. because he was the guy who knew most about the scams it would have to outlaw). Just note Mr. Zweig's freakish level of magical thinking here: everyone (except perhaps the "intelligent investor") has begun to realize that the finance economy is a rigged ponzi-scheme -- but don't worry, because even the fact that everybody's worried is itself a signal that everything will be fine! This fits perfectly with the next bit:
"The financial future is no more uncertain now than it used to be; in fact, it's far less uncertain than it was in the summer of 2007, when the Dow shot above 14000, the future seemed bright, and utterly no one foresaw the disaster that would befall the financial system."
Translation: anyone who did foresee the current debacle -- that is, anyone who noticed as recently as last year(!) that maybe a $90 TRILLION derivatives bubble might not last forever -- is simply a non-person. Michael Hudson, James Turk, Robert Hirsch, Mark Feld, Mike Ruppert, James Howard Kunstler, Catherine Austin Fitts, and thousands of others? These are just "utterly no one." Thousands of grown-ups have spent decades explaining to anyone with ears to hear: Wall Street is a giant casino. It launders half a trillion narco-dollars per year; fractional reserve banking, compound interest, and derivatives trading sell the world. But if you aren't on their team then you're "utterly no one" and your work simply never existed. Whatever, obtuse WSJ.
4 weeks ago