A Distant Sound of Churning
In my last dream of a febrile night, I put my flat-screen TV on top of an old house in town and watched it crash onto the street. There was nothing inside it. The darn thing was empty. The ghost of Little Caylee wasn’t even in there.
From the news this weekend, you’d think the world was in a coma, but I swear I heard ominous bassoon phrases through the night rain… something large groaning out there in the dark. A great churn, coming closer. The world is in a box, tortured with its obsolete ideas about how economies are supposed to run, especially the money part, and the economists are clueless.
A case in point: the eminent Vincent Reinhart at the Council of Foreign Relations last week. (Conspiracy theorists just shut your pie-holes):
“There are very few debt defaults… there are a whole lot of restructurings. For most of history, default is something the strong declare on the weak when they lose their patience. And if you’re members of the same club, you’re less likely to lose your patience. Hence you’re less likely to default. Greece is in the club.”
The club he refers to – the Euro money club – is less a jolly fraternal lodge than a funeral insurance association. The latest restructuring for Greece he referred to is a cockamamie perpetual rollover with no redemptions allowed, while Greece has to agree to become more like its neighbor, Albania, in lifestyle – that is, like Borat, minus the joie de vivre.
There’s a third option that Reinhart ignores: the Greek populace can riot in the streets, toss out their government, install some kind of rump leadership and hoist its middle fingers at the Euro management team, opting out of the club. Why this does not occur to Reinhart (and many other vested poobahs) I can’t say, despite the fact that there are many places around the world (especially Europe these days) where the natives are obviously getting restless. Besides, it’s not lost on the Greek people that they’re being asked to go Albanian for the sake of a dozen banks up in Germany, France, and Holland, not their own country’s sacred honor.
The proposed restructuring is all about the Great Fear that haunts the inner sanctums of finance (like the ghost of Caylee haunts America): counter-party obligations on a Burj Dubai of side bets over things such as the soundness of bonds and the movement of interest rates. The world of money imagines a thundering crash of cascading defaults as the various counter-parties are revealed to be broke, naked, and ashamed. And rightly so, because the creakings and groanings of this tower of paper will not only crash, but burn, too. The bankers can already smell it.
Anyway, let’s be clear that money has become a world unto itself now, a self-referential hall-of-mirrors that only sees itself and is increasingly confused by what it sees in that self. Outside that blinding little box there are real economies of people trying like hell to go about their daily life, and there is much to be fretful about. Economies are caught in the permanent compressive contraction of fossil fuel based activities. When you hear a politician utter the word “growth” note that he/she is speaking out of his/her ass. Contraction is contraction, not growth. We’re done with growth of that kind because our fuel supplies are shrinking, not growing. The vaunted “recovery” is a political three-card-monte trick.
The sad fact is we don’t want to go where history wants to take us: to a smaller human imprint on the planet, with all that implies. This is true especially of the intellectual avant-garde, who can’t imagine a world without the joys of perpetual techno-narcissistic novelty, of levitating skyscraper cities with hanging gardens and flying cars, full of girls with green nail-polish in get-ups so fantastic mere mortals could never have dreamed them up, flaunting hand-held gadgets so miraculous that life itself seems besides the point. Oh, shimmering future! Oh Ray Kurzweil and your nano-ladder to the worm-holes of forever!
This Ancien Régime is about to be swept away on the tsunami of its own futility.
The failure of leadership around the world is now complete. Nobody who needs to get it gets it. Our own money management team here in the USA is in a box even worse than Europe’s. It’s not even a hall of mirrors. It’s a broke-down Winnebago with moldy upholstery and the propane line is leaking inside. Everybody’s wondering if Ben Bernanke is going to light a cigarette. What else can he do? If he doesn’t keep the QE-ZIRP racket going, the wheels will come off the Winnebago. If he lights that American Spirit, she’ll blow.
The US banking system can easily implode, anyway, if a European nation or two opts out of ECB-peristroika. God knows who is a counter-party to whom in the mammoth international clusterfuck of accounting fraud that passes for a commerce in capital. Hence, everybody is nervous – except the fools at the Nascar oval with Big Gulps in their fists. When the Greeks and Spain’s youth corps, and even the bleery folk of Dublin take to the central square to express their rage, and hoist middle fingers to those who would chisel them into debt serfdom, Americans will have no central squares to go to. Will we take to the highway strips and burn down a Taco Bell or two? Maybe President Obama will ask congress for a home mortgage TARP, guaranteeing that nobody will ever buy a house again, at least not on an installment loan. Maybe in tonight’s New Hampshire “debate,” Michele Bachman will appeal to Jesus for the release of Little Caylee from eternity’s impoundment lot, and the stunt will carry her overwhelmingly to the oval office.
By then, America, too, will be more like Albania. You can take that to the bank, if there’s one left standing. Yesterday a little US flag appeared on every mailbox in the neighborhood. Someone is trying to help remind us what country this is. Most years, this is just ceremonial routine, but now I suspect a lot of people get up and scratch their heads over it. And, believe me, just waving that old flag is not going to furnish any kind of idea you can really hang onto.
Out of the current stillness in world events, a horrible churning waits. Men in impeccable suits on Swiss terraces cannot hide their anxiety. One might even lose it and jump a hotel maid – you never know. Bernanke, Obama, Geithner are powerless against the dark lurking churn, though they can easily make it worse. What a summer we’re in for. Get out of the stock market.
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