Previously by Richard Daughty: The Solar Downturn
I was really ready for a laugh when I read the Bloomberg article, “Derivatives Industry Gets Second Look From Congress.”
To start off the festivities, it opens with a photo of the odious Christopher Dodd, the self-important arrogant loudmouth from Connecticut who milks the job for special “favors” and personal aggrandizement, actually chairs the House banking committee and, as a long-time member of Congress, is directly responsible for the economic catastrophe befalling us and the world, a sorry fact that I hope is a complete and utter embarrassment to the voters of Connecticut.
But the article was not about Christopher Dodd or how something is obviously wrong with this guy, and naturally it did not mention the fact that if I thought, for even a minute, that I could get away with it, I would go to Washington, D.C., walk into this guy’s office, grab him by the lapels of his coat and slap, slap, slap the hell out of his smarmy face until whatever in the hell is wrong with him has been knocked out of his stupid Leftist, economically-illiterate head.
Instead, we read that now that his incompetence is evident, “Congress will take a second shot at the derivatives industry after its decision nine years ago to forgo regulations led to a $592 trillion market that brought some financial firms to their knees.”
Then, to show you that Mr. Dodd, the bank or the Federal Reserve don’t have an exclusive on economic illiteracy, the article quoted Mark Halverson, “a staff director for Senate Agriculture Committee Chairman Tom Harkin,” as saying that “One of the key underlying problems in the whole lead-up to the meltdown was too much leverage, too little capital or too little collateral.” Hmmm!
Well, while he is exactly right that there was too much leverage, where the buyers of these toxic assets were putting up a few cents in chump change and borrowing the rest, he apparently doesn’t know what leverage is, even though I just explained it, which shows how much people pay attention to me around here. Morons.
The fact is that Mr. Halverson is being merely redundant when he says there was too little capital, as distinct from leverage, but I got a Real Hot Mogambo News Flash (RHMNF) for this Halverson fella about “too little collateral,” as there was lots of collateral, dude! All the collateral you want! More than you could ever want!
You want more collateral? Hell, give me a couple of minutes and I can whip a lot of IOUs and vague promises into a package and give you all the freaking collateral you want! I’ll give it a fancy title, too, like “Collateralized Debt And Vague Promises Obligation.” Too little collateral, you say? Hahaha!
Then, just when I thought it could not get funnier, I got to a funnier part where, as part of the overhaul of the entire economic and financial system of America, the Obama administration has a proposal that would “require standardized over-the-counter derivatives contracts to be guaranteed by a clearinghouse.” Hahahaha!
And if the clearinghouse decided it could not, or would not, pay? Hahaha! Hell, we got that system now! Hahaha!
The scary part was that the Obama administration is revealed as clueless, too, and Bloomberg remarked that the White House “said in its regulatory proposal that while derivatives didn’t cause the financial meltdown, they ‘became a major source of contagion through the financial sector during the crisis,’ instead of dispersing risk as intended.” Hahaha! Wrong!
I was just getting ready to fire off a lot of scathing emails about such a ridiculous stupidity, when I realized that here was the perfect solution to my problems at work!
No, not my main problem of calling employees and customers “morons” for not buying gold, silver and oil when their own stupid government is ruining the dollar right in front of their eyes by allowing the Federal Reserve to create such excesses of new money and credit so that the government can borrow the money and spend it, now that people are not borrowing and spending money with their customary élan because they are broke and unemployed.
Nor was it a solution to any of my many, many other personal problems which are, I might add, all the result of other people acting like they have a lot of brain damage. Wasn’t it Sartre who said, “Hell is other people”?
Instead, this could be the solution to the problem of how I am probably going to get fired because I have alienated the customers and made enemies of the employees, which was not part of my Fabulous Mogambo Plan (FMP), which was to take the customer’s orders, demand a big deposit, and then just say, “Screw ‘em!” whereupon Sales would always be bringing in new customers, whereupon I would take a little of that new deposit money and settle out-of-court with the irate customers for pennies on the dollar. A real moneymaker of a plan!
So, obviously, the financial problems of the company are not my fault. The sales department fell down on the job, ruining everything.
As I watch her face turn red with anger, I remember that I am just hoping to stall for time, as it will not be long before gold, silver and oil shoot upwards in price and I, who have these things, will have enough money to buy the damned company and fire them all, including my boss and her “Get out of my office or I’m calling Security!” crap!
Actually, I am thinking, “Whee! This investing stuff is easy!”
Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications.