-- Posted Friday, 26 December 2008 | Digg This Article
| Source: GoldSeek.com
In the essay "Madoff and Bernanke: Doing the math (or: Soylent Green Finance)" by David Goldman at blog.atimes.net, he has some interesting (read: we're freaking doomed!) statistics, in that "write-downs in the global financial system to date have reached $993.9 billion, against $919 billion in capital - which is to say that the entire global financial system is insolvent, except for Fed bailouts."
Since everybody is wiped out these days, I thought he was referring to the Soylent Green thing, as references to Soylent Green are interesting to me, as the whole concept of reprocessing old people into food for pets and the young seemed so logically perfect when I was a young married guy being eaten into the poorhouse by some of each, but which is now pretty upsetting to an old guy like me.
And it is especially worrisome now that the government's monumental Social Security, Medicare and Prescription Drug Coverage problems would be solved if all of us old people suddenly died.
Mr. Goldman, suddenly realizing that he is talking to an old paranoid mental defective, heroically tries again to get me to see that the point is that bankruptcy is everywhere, not about turning the old and the dead into some kind of nutritious puppy chow, and to prove it, he notes that Bloomberg "has done the numbers, and they are impressive. Freddie Mac had $56 billion of writedowns against $15.6 billion of capital, Freddie Mac had $58.4 billion of losses against $20.8 billion of capital, Washington Mutual had $45.6 billion of writedowns vs. $12.1 billion of capital, and so forth."
John Browne of Euro Pacific Capital says, "The Federal Reserve estimates that in the past year, losses in real estate, stocks and mortgages have sucked out some $7.2 trillion of wealth from the U.S. economy. Some are now putting the figure at $20 trillion."
Bud Conrad of CaseyResearch.com says that "a reduction in asset prices amounting to about $14 trillion (in housing, equities, etc.) is bigger than the government's countervailing actions of around $3 trillion - the total, so far, arrived at by combining the measures taken by the Fed with the federal government bailouts."
I assume all of this has something to do with the out-going president making sure that the automakers get $17 billion in loans, which even they admit will only be enough for a few months, tops! Hahahaha! Management geniuses! Hahahaha! No wonder Bush likes them so much!
Online.wsj.com reports that it is not an outright gift, however, and that "Under the White House plan, the companies are required to extract enough financial concessions from workers, suppliers, dealers and other stakeholders to demonstrate their long-term viability by the end of March."
The phrase "long-term viability" came as a shock to me, as that very phrase coincidentally came up recently at work! The rumor is, see, that in preparing all that miscellaneous year-end reporting and accounting stuff, the auditors had concluded, as part of their responsibility to ascertain whether we were an "on-going business concern" or not, that I, alone, in this whole freaking place, like everything is all my fault or something, was the only one so glaringly incompetent and "apparently completely disinterested in any aspect of the job duties or common sense" that I represent a "danger to the long-term viability of the company."
As you can imagine, getting a "qualified opinion" from your auditors is causing all kinds of commotion in the Board of Directors, and I am planning on defending myself by saying that this just the opinion of some stupid accountants, and (as a back-up plan) it is all just a matter of getting some of these trillions of new government dollars for ourselves, which is the function of salesmen and contract lawyers, and so it is not my stupid job!
But my problems aside, if these auto guys have to be given $17 billion and cut salaries, wages dividends just to demonstrate that they CAN be again viable, where in the hell are the auditors' reports about these weenies needing $17 billion just to be able to stay in business for a few more months, which is how long it will take to find out even IF they can be "on-going businesses"?
But, then again - as I plan to explain to the Board of Directors - what's a piddly $17 billion to the autos when you are looking at $700 billion in TARP loans, another $8.5 trillion in additional deficit-spending spread out over most of a decade, another promised "stimulus" plan of giving "free cash to everyone" to be enacted within the first hour of the Obama presidency/Democratic-controlled Congress reign of terror, a stimulus already rumored to be around $800 billion! Free cash!
And you are NOT buying gold in the face of such blatant, rampant, massively excessive creation of money and credit? Hahaha! "You are a brave man, Gunga Din!" I say!
And then you remember what happened to Gunga Din at the end of the movie, and who apparently did not have any gold. "Just a coincidence" you say? We'll see!
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Editor's Note: Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it.
The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications. Click here to visit the Mogambo archive page.
-- Posted Friday, 26 December 2008 | Digg This Article | Source: GoldSeek.com
