(Originally written on Sept 21st)
Aside from Shakespeare (who knows why) my favorite read when I was young , other than the comic books and sci fi stuff, was Sherlock Holmes. I would say that in addition to the Socrates's dialectic, opposing viewpoints to distill the pure 'form' ,that the Holmes technique of elimination of all possible motives until you cannot eliminate thus revealing the truth - as outlandish as it may appear to be - is in many ways the defining 'gutcheck', 'mental path' etc. that I have taken in this life. Sometimes it is difficult to see the significance of an historical event when it is happening around you. I believe, however that right now and right here what is occurring will effect us, our children, and perhaps our children's children more so than any event I have been witness to heretofore. Section 8 of the Treasury fact sheet that was leaked, purposely of course, over the weekend literally gives dictatorial powers to the Treasury Secretary to have full access to the resources of this United States of America ( a $700,000,000,000 revolver line) to dispose of in the manner and fashion that he, Trader Hank, deems to be necessary in consultation with Chairman Ben with NO CONGRESSIONAL OR LEGAL OVERSIGHT WHATSOEVER. In other words the Constitution doesn't apply here..... Take it away Holmes... HOLMES: So tell me Watson why would our elected leaders abdicate their authority to an appointed position? WATSON: Merely a redistribution of wealth to the rich. A taxpayer handout for bad speculative bets. HOLMES: My dear Watson, the rich have taken care of their brethren for years but they do so in a way that does not draw attention, the integrity of the system is based on confidence, confidence on the transparency of the process and the markets .. the invisible hand as it were. Clearly Holmes much more is afoot. This is visible, the language is explicit. WATSON: What are you saying Holmes? HOLMES: When bailouts occurred in the past, companies went bust, the government assumed the loans, worked them out, and grabbed the assets. This is a preemptive bailout, to seize the loans before the companies go bust. WATSON: I don't see where you are going with this... HOLMES: My dear Watson if it were a company, or several companies, that posed systemic risk we would simply wipe out the commons and preferred and then go up the capital structure and equitize until future equity participants either saw economies of scale or saw the need to break up the entity into smaller pieces. Perhaps the government would take a convertible debenture position, or equity participant notes , warrants etc.. as in previous bailouts so that there would in some situations be a return on the government's investments as the entity is put into some form of run-off. The process would be transparent in that taxpayers would know how their money was being spent, as in previous crises.... WATSON: But this plan mentions none of this... HOLMES: No it does not. WATSON: So the process has been entirely hijacked by the rich elites and they no longer feel the need to hide their.. HOLMES : Watson don't be a fool. The master cat burglar does not reveal his hand in his later years if anything his methods become even more challenging to discern... no Watson my dear friend overconfidence in their ability to confiscate wealth is not what is occurring ... quite the opposite my friend.... WATSON: I don't understand.... HOLMES: My dear Watson when Hank and Ben gathered all the senators in the chambers and told their aides to leave the room, an occurrence usually done only relative to top-secret national security matters, they, as further communicated by Senators such as Dodd and Schumer used words that ' in our 25 years we have never heard come out of the mouths of our leaders'. We can surmise dear Watson that the gravity of the problem necessitates no transparency, that the gravity necessitates no Congressional overview nor Constitutional check and balance, we can surmise given the proposed solution to the problem - absolute authority and access to all resources - that the problem is not a liquidity problem within selected companies that pose systemic risk, that the problem is not a solvency problem within selected companies, that we can never know why this money really needs to be spent or how it will be spent because the problem is dear Watson... WATSON: Yes Holmes.... HOLMES: The problem my dear Watson is that the system is in fact insolvent.. WATSON: My God Holmes then that means.. HOLMES: Yes my dear friend... we are all subprime now.....
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