Thursday, September 18, 2008

Don't Panic

We are in a time of great economic uncertainty.

Banks and financial institutions are being bankrupted.

Stock exchanges are in a nose dive.

Properties are being repossessed.

The money markets and interbank lending have dried up.

Nobody knows what is going on or how to fix it.

Governments are stepping in to ‘act’ where necessary to nationalise financial institutions.

Karl Marx is surely turning in his grave!

It’s capitalism Jim, but not as we know it.

It sounds extreme, but capitalism always sniffs out the rats. Unfortunately, sometimes this is done with the precision of a smart bomb and there is collateral damage of the human variety. Let us hope the collateral damage is limited to the architects of this mess.

Few will sympathise with bankers who are out of a job. Having cleverly created complex financial instruments, in the end, they didn’t understand how the instruments worked. They were clearly smarter than they thought and outsmarted themselves.

This situation was created in the banks by assembling groups of high performing jumped up greedy magne cum laudes with little adult supervision. It only takes a small group to spoil it for everyone. Now no one wants to play in their sandbox.

Fingers are being pointed: governments; central banks, regulators; credit agencies; bankers; market rule makers; short sellers; Al Qaeda economic terrorists... Really!

This is a time of great opportunity for the contrarian. I have set up a new fund to invest in a large psychiatric rehabilitation centre in Connecticut for unemployed bankers. I have found a large old estate on gently rolling pastures with a small river running through the property. It is just the thing to soothe terminally depressed unemployed bankers.

Of course, a week’s stay will be terribly expensive and the fund is forecasting double digit returns.

The daily treatment programme is spartan and functional:

  • a near excessive dosage of Prozac
  • a locking codpiece / chastity belt to prevent masturbation
  • no phone, blackberry, internet or media access
  • a morning session with Dr. Terri Firma on coping with life after being a Master of the Universe
  • an afternoon session in the anti-gravity decompression chamber
  • an hour with a ‘Joe/Joanne Public’ guest speaker whose life has been completely fucked up as a consequence of this institutional moral hazard.
The centre is not confident of a high rehab success rate, but following a number of visits, it is confident that bankers will be comfortably numb. Unfortunately, they will always be wankers. There is no known treatment for this condition.

Not since Jimmy the shoe shine boy gave Grandfather Beaverboosh a stock tip before the great crash of 29 have I heard financial distress stories of such magnitude.


And don’t forget your towel and some peanuts.



ian in hamburg said...

If it shoves Sarah bloody Palin off the front pages, let's hope for more of the same...

At the risk of sounding like a coil-necked CNBC talkshow guest:
You have to wonder how much more the Fed can keep shovelling into these black holes.

Oh, and I liked this quote:
"We have the irony of a free-market administration doing things that the most liberal Democratic administration would never have imagined itself doing in its wildest dreams." - Ron Chernow, financial historian in yesterday's IHT.

Joao said...

It seems private companies are only private when they are making money........when the table flips there's nothing better then a good o'll nacionalization.
Good thing i'm pretty sure i'll hit the Euromillions tonight and become excentric.

Johnada said...

This is why I invest all my money with royalty from Nigeria that need a small investment to be able get to their fortunes.

Much better return on investment.

daisyfae said...

underlying problem - at least in the US: Americans are exceedingly bad at math. Can't add. Expect 1+1=100X returns on investments in poorly understood 'financial services'.

we pay our mortgates to Fannie Mae/Freddy Mac, and now our taxes, too. Would like a share or two in your rehab center - and would be willing to volunteer as a counselor. A leather-encrusted, whip-carrying counselor. Who teaches basic math. Until they bleed.

Anonymous said...

Your daily treament regime is most excellent! However I would like to humbly suggest an addtional medication to complement treament protocol number 2...

200mg of sildenafil citrate!

and don't forget to hide their towels...

nursemyra said...

*sigh* if daisyfae can give up her time to volunteer in your asylum then nursemyra can do the same.

I've got the instruments.....

Zhu said...

I too find it hard to feel sorry for the stock market employees that were laid off. I mean, I assume they put money aside in case of... or they were very foolish.

Oh, they were foolish, sorry.

Shantanu said...

Oh what a mess! One doesn't know yet what else is on the horizon.

livingladolcevita said...

Oooh I love it when the wunch of bankers get a taste of the lowlife.

Ag. I'm just bitter from all those early years working at Lehman.

Qelqoth said...

[advertisement] Wake up to Credit Crunch Flakes, the healthier start to a future of financial despair! ;)

beaverboosh said...

ian - it's a new era, isn't it ironic. It's like rain on your wedding day, a black fly in your chardonay, good advice...

joao - hopefully the US Treasury will make some money for the taxpayers... good luck on the lottery... better chances than getting a return from your investments, or even your investment returned

johnada - you risk taker you... royalty as well. President of Johnada has its advantages eh!

df - ya, like Jethro Bodeen's 'goesintas'. You are hired, we'll make a great team. Let's get NM on board!

anonymous - cruel, but the doctor has agreed to the advice and make sure the cod pieces and chastity belts are extra tight

nm - you're in. Can't wait to work with you and df... bring the instrument collection

zhu - some might even have to sell their jets, villas and trophy wives

shantanu - a plague of locusts, the black plague, a flood?

dolcevita - ex-Lehmans eh... can you believe they've gone! Are you still a wanker?

qelqoth - LOL, a $700B breakfast! Pretty hard to swallow, if not digest

itelli said...

If you had purchased £1000 of Northern Rock shares, one year ago, it would now be worth £4.95; with HBOS, your £1000 would have been worth £16.50; £1000 invested in XL Leisure would now be worth less than £5, but if you bought £1000 worth of lager one year ago, drank it all, then took the empty cans to an aluminium re-cycling plant, you would get roughly £214 in scrap value.

Got it via email STOP Found it interesting STOP Wanted to share with someone with STOP commanding STOP knowledge of economics STOP and beer STOP