Today the Federal Reserve, hot on the heels of saving Wall Street, elected to cut interest rates once again, by 75 basis points. And while the stock market had a screaming orgasm over this, I did not personally think it was such a great move. Herewith, a dissenting opinion.
Fuck the Street. Please, Ben Bernanke, just fuck them. Raise interest rates to fucking 10% for the month if you must, just to master cleanse all those fuckers of their liquidity addictions. And seriously, that $30 billion in cash you promised JP Morgan? Fuck that. Just text Jamie Dimon tomorrow afternoon and say you can't make it, maybe he can find some sovereign growth sugar daddies in one of the Emirates or maybe China? I mean, China's got all the jobs now anyway, they might as well control a few more multinational companies in the lead-up to the Olympics, right? They'll probably even overpay for them, what with all this Tibet noise. But really, how hard can it be to scrounge up $30 billion if Goldman managed to cough up $21 billion on Christmas bonuses? Anyway, like I said, not your concern; fuck them. I wouldn't say this if I hadn't thought about it at least as hard as the average overleveraged hedge fund short-seller when he pushed down on the panic button that got us into this mess, Ben Bernanke.
And by "us," I mean Bear Stearns, because I personally have weighed the odds and I'm pretty sure I personally have nothing at stake here, no matter what you do, Ben Bernanke. My balance sheet, while admittedly lacking much in the way of assets, is also blissfully insensitive to short-term market and/or interest rate fluctuations.
Thanks to my industry, indeed, my own financial situation has been governed by a recessionary state of constant layoffs and downsizing for years and years — and I'm lucky enough to have one of those jobs they haven't figured out how to do better in Hyberabad. And I'll let you in on something, Ben Bernanke; my finances have zero correlation with those of the stock market. I'm not alone in this; most Americans are actually earning less than they were in real terms than they were in 1999. They can handle a few quarters of recession because they've been handling it.
Some of my morning commenters would have me believe bailing out JP Morgan is the only way to minimize "collateral damage on Wall Street and thus the economy," but really, whose economy are we talking about here? The buying power of the minimum wage employee is at a 51-year-low.
So fuck the Street, Ben Bernanke; just this once, just for, like, a quarter or something. You don't have to play rough; I'm not asking you to nationalize any industries or institute land reform or anything, just give them a little scare. They chose this path, you know. They chose to worship Ayn Rand and wear those Paul Smith shirts and pay zero money down on their Hamptons summer homes and obnoxiously, whenever confronted by someone like myself at a bar, claim that the Market Solves Everything. Let the market solve this one for them. People are eating dirt for dinner in Haiti, Ben Bernanke; you can let Bear Stearns go to bankruptcy court.
Sure, some financial institutions might get pissed for a minute. They didn't lend Bear Stearns all that money to leverage the shit out of their delusional bets that the housing market would keep going up up up only to spend years in bankruptcy court for the sake of reaping fifty or sixty cents on the dollar. But you know what? They probably also lent money to Goldman Sachs and Jeff Greene and John Paulson to leverage the shit out of the lucky hedge funds that bet it would all end in failure. They lent money to all those short-sellers who bet the price of Bear Stearns stock from $67 all the way down to $2. Sure, that's what makes our economy so "dynamic", Ben, but does that make it any more virtuous than a legalized Ponzi scheme?
What if there were some sort of cascading ripple effect? everyone wants to know. What of all that IRRATIONAL FEAR? But you just tell them, Ben Bernanke, that they should maybe sit quietly in their illiquid asses and reflect on what the fuck made them think it was rational to buy into all this fancy housing market bullshit in the first place. Just ask them, Ben Bernanke, what they thought was rational about people in Southern California taking out mortgages with monthly payments equivalent to five months' rent?
Because the housing market never made much sense to me, Ben Bernanke. I mean, there we were a couple years ago, with a war on, a slowing economy, oil roaring up toward $100 a gallon or whatever, skyrocketing energy prices sending other commodity prices through the roof... just where were the buyers who were supposed to keep bidding up those houses so everyone could continue pumping the economy with home equity loans? I'll tell you where a lot of them are now: sitting at home, watching network TV and avoiding opening their mail. Sort of like Bear Stearns with that portfolio of mortgages, mortgage-backed and asset-backed securities no one wants to put a value on just yet.
But you know? Eventually they'll open the envelopes, see what they've got, realize it's probably not the end of the world and start moving money around again. Assets are only "illiquid" till someone — the market? — figures out how to make them liquid again!
And if it is the end of the world, there's always the hope of an early death a la Ken Lay. Right?