Friday, September 26, 2008

The Shoebox Bailout

Back in 2000, some really clever Masters of the Universe invented a wonderful new product:

Shoeboxes.......filled with dog shit.

The found that if they just closed the boxes tightly and told everybody there was wonderful, absolutely safe stuff inside, that they could sell them for lots and lots of money.

This was a great business. There are tons of dogs around and they make tons of dogshit: virtually for free. The boxes are pretty cheap too.

Of course, to have a really great business you need product endorsements: I learned that selling detergent.

Enter the: Rating Agencies. They played along: AAA+; AA++ A+++ and on and on. These boxes were great stuff.

As happens in all businesses, after you saturate your home market, what do you do? Go overseas. No problem there, lots of Masters of (smaller) Universes in China, Japan and Europe really eager to get some of those boxes of dogshit. In fact, one of the German banks even sent money by automatic transfer after one of the Masters (Lehmann) had declared bankruptcy.

Which brings me to where we are with the tale. Just like at that little coffeehouse in Haarlem (Netherlands) in 1642, when someone held up a tulip bulb for auction and no one said anything, and the next day the economy of Northern Europe ground to a halt, at some point someone began to smell something in one of the shoeboxes. Hmmm, what's in there? Never thought about that. Maybe we should have a peak? What?? This thing is just full of: DOGSHIT...

Now the (dog)shit hit the fan. There were tons of these boxes all around the world, and suddenly everybody realized what was really inside. Things are desperate. No one wants them anymore. What to do???

Right!!! Call the government.

And there they are, right on time: as Ronald Reagan said, "I'm from the government and I'm here to help."

Sorry guys, this is what is happening. Unfortunately, the only thing I can see doing is forced nationalizations and forced winding down of all the Masters of the Universe.

One thing is certain: all those guys should be made to live off their BOXES OF DOGSHIT.

I just decided to vote for Obama. That is the end of the line. Unfortunately, the Connecticut voting commission has still to send me my absentee ballot. So once again, I can claim taxation without representation.

1 comment:

Gill@acm.org said...

LOL. I hadn't read that about the German bank. Anyone take the fall for it?

CT is going for Obama anyway, so I wouldn't worry about your ballot. Similarly TX is going for McCain, so I can't get excited about my civic duty.

I do think you left out one part of the story. The government subsidizes single family home ownership and cheap mortgages in a lot of ways, not just Freddie and Fanny and backstopping Wall Street. The income tax deduction on mortgage interest, reduced rates for vets, etc. We're as addicted to rising home equity as we are to oil. It is the preferred investment of the government for the middle class. So the government and the culture encouraged overproduction of the dog shit, not just the banks.

How are mortgages handled in Germany? Can you get 20% down, 30 years, fixed rates? If you go bankrupt, is any part of your home equity protected like it is here? Beyond buying our dogshit did German banks create these kinds of securities too?