Sunday, January 18, 2009

Do the right thing

First an admitted conceit : in many ways I think the new President is just like me. Uberliberal but pragmatic. Fiscally conservative but socially liberal with the ability to discern the intellectual wheat from the chaff. Tough but fair, with sharp elbows and a generous spirit.

Understand the danger in such an assumption : much like folks that thought Palin could be a good president because she reflected their 'values' ... patting yourself on the back by waxing on how wonderful the candidate is who is 'just like you' resembles delusional self-aggrandizing more than rational political judgment.

Nevertheless, my fellow Chicagoan, through his words and his deeds, appears to be the type of intellectual that coming out of the wilderness of the Bush years is akin to a alarm clock after a fevered nightmare.... thank God it's over!

I understand that there should be a 20%-40% rally from S&P levels of around ~780. The runes of finance all suggest as much. But I can't pull the trigger because maybe, just maybe, Obama Smartypants will live up to his nickname.

Perhaps I am deluding myself, power is corrupting, and a novice in Washington (looking at you Bill) can easily believe that centrism and conciliation is the path to victory. Barack, you would be well served to internalize Tom Delay's words : Centrism is a chump's game.

Shrub and his minions played the bankster game of 'Don't ask, don't tell' well enough to squander billions of taxpayer dollars to bailout rich folks' speculative bets without that little chestnut called price discovery being uttered -a truly discouraging word for nancy capitalists.

Memo to the president : Don't be the sucker at the table.

The British, if the latest news is correct, are backing down off the 'bad bank' solution instead opting for guarantees which will only provide insurance to the reality that they will be back at the bailout table again.

It is clear to me, as I hope it is clear to my fellow Chicagoan, that the system is insolvent. Banks need to be dipped in the acid bath of price discovery. The insolvent banksters? Nationalization and doors closed. Toxic assets? An aggregator bank that will hold until they can be worked off. Merge the weak, promote the strong, and let the laws of flippin' capitalism apply so that private capital can see value in investing within the capital structure of our financial system again.

Will the markets crash? Maybe, but if so it will be a V that will stand for victory in the upcoming congressional elections as an Obama administration will be able to show that the economy is improving under their watch.

The alternative is the Chinese water torture of capitalism on the drip. Zombie banks and zombie consumers are a tide that will raise no boats.

Busting up the banksters is in your best interest and it is in our best interest.

Do the right thing.

Don't be a chump.

1 comment:

Oregon Guy said...

AM,

Well said; 100% on the mark.

This weekend I contacted the Senators representing Oregon to ask them to oppose Geithner's nomination to Secretary of the Treasury. A continuation of the current policies of the Federal Reserve and Treasury Department are completely unacceptable to me as a taxpayer.

I urge all readers to do the same.