I'm a bottom-20-percenter, a licensed practical nurse, as is my wife. We live on a boat, have minimal needs, and left the "immediate satisfaction of 'wants'" category decades ago. We are aging, approaching what used to be called "retirement age" (Hey! In four months I'll be eligible for MEDICARE!) and like most of the Americans in what the Masters of the Universe like to call our "tranche," have little to nothing saved. Thanks in large part to the serial rapes of the "safe investment havens" called 401(k)s and pension funds.
What I tend to save is tidbits about how the top 1% is busily stealing whatever bit of future I, my wife and our children and grandchildren might have. The struggle there is to keep up with the news and revelations.
I see bobswern has listed out a bunch of the worst depredations, which slowly are revealed after the thieves and scammers have sufficiently insulated themselves from any consequences via PR spin and passage of news cycles and the creation of a miasma of general despair and exhaustion. But I think he missed one, or I did in reading his diary: a couple of little articles in obscure places like the Financial Times, way beneath the Tea Party Radar's lines of sight, about how foreign banks took half the stash in the Federal Reserve's obscure "term auction facility," or TAF.
Soon as I get into reading this stuff, my eyes glaze over, and I have to force myself to read the dry prose, sapped of any vestige of outrage since it's written by cognoscenti who profit from the whole casino "financial industry." But basically, if i have this right, the people of the Fed kind of arm-twisted some of the world's strongest (financialy-speaking) banking entities to TAKE virtually free money, which some day will have to have its purely notional value made good, if that is still possible, by sweat labor by "average Americans" who create the Real Wealth that feeds and clothes and houses and employs the actually productive members of our species.
The immediate focus of what little outrage I can still muster is in this bit from today's FT:
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Some of the world’s strongest banks have profited from an emergency credit facility set up by the US Federal Reserve to shore up confidence in the global financial system, according to a Financial Times analysis of data released by the Fed.
More than half of lending under the Fed’s term auction facility – the largest of its crisis programmes – went to foreign banks. Details of the varied uses to which they put it may add to political criticism of the Fed.
The Taf was set up in December 2007 to provide one-month loans to creditworthy banks as markets dried up for lending longer than overnight. In August 2008, it began offering three-month loans as well.
Rabobank of the Netherlands and Toronto-Dominion of Canada, two of the only banks in the world with triple A credit ratings, used more than $20bn in cumulative Taf loans.
Ed Clark, TD chief executive, said that using Taf was logical even though his bank never had a liquidity problem. "That wasn’t how we made a lot of money. But you make a dollar here, you make a dollar there. What’s the spread you make on a billion dollars?" he said.
In the summer of 2008, TD was borrowing $1bn from TAF at rates of between 2 and 2.5 per cent. For that borrowing it used the lowest quality – and hence highest yielding – collateral acceptable to the Fed.
More than 80 per cent of its collateral had a triple B credit rating at a time when such bonds yielded about 7 per cent. TD could therefore have made a notional gross spread of about $4m a month during 2008.
Mr Clark said the authorities were encouraging healthy banks to use schemes such as the Taf so as not to stigmatise their weaker counterparts. In January 2008, Ben Bernanke, the Fed chairman, said the Taf appeared to be succeeding because "there appears to have been little if any stigma".
"You go through the whole crisis and there were lots of things we did that weren’t necessarily economic but were the right thing to do for the system," said Mr Clark. "So I’m not embarrassed by this at all."
http://www.ft.com/...
If I have this right, the nitty-gritty is that the Fed created a huge pot of what the libertarians call "fiat money," a pile that these non-US banks (to the extent that any of the 'banks' can be said even loosely to be "American," any more, rather than simply self-serving islands of fraudulent profit in a rising sea of debt) were "encouraged" to borrow at 2 or 2.5% interest, giving as security some pretty weak collateral, and pocketing the "golden crumbs" of interest arbitrage that fueled the Funny Munny wealthiness of the bond traders in Tom Wolfe's "Bonfire of the Vanities."
But I may have it all wrong. That's the thing: When the city councilman takes a bribe to steer city business (public tax money) to some shyster lawyer with huge hourly rates, or a sleazebag garbage contractor or road builder, we can all mostly understand the details and the scope of that. This other stuff, like the derivatives "market," which the players therein even describe as nothing but bets on bets on sets of other bets, and which currently has "created" something like $400 trillion in "notional value dollars," whatever the Hell that means, are just beyond understanding of people who get a paycheck every two weeks and spend all of it on NECESSITIES like food and rent and now $3.03-a-gallon gasoline again and what the Sickness Treatment Unsurance executives laughingly call "health insurance."
We... can't... keep... up.
Not with the sneaky little bastards in "bespoke suits" and $40,000 watches, with their tensor calculus "reality transactions." Not with the marketeers who know that "price" has nothing to do with that stuff we learned in Econ 1010 about supply and demand, but instead with management of perceptions of "need" and "value" and really sophisticated understandings of "what the traffic will bear," and how speculation via futures wagers and a bunch of other scams can be used to manipulate that "price" term thingy, from the transnational-commodity-trade level right down to the little tags that spit out of the pricing guns at Walmart and Macy's, and those roll-over numbers on the gas pumps. Not with the velocity of transactions of all kinds that ultimately depend on but contribute nothing to the Real Wealth we mopes and dopes create with our ever-more-productive-and-efficient, wage-slave labor, getting less and less return of value for more and more work, when we -- I count myself among the fortunate -- are healthy enough and lucky enough to have a job, by which we "earn" our daily bread. And as opposed to the shits that arrive at Goldman Sachs and the Fed via helicopter and limousine, and spend their days "making" money, pretty much out of the thin air that gets recycled and re-invigorated by infusions of Real Wealth stolen once again from the Real Economy, to inflate one bubble after another.
This month's National Geographic's cover story is all about Seven. Billion. Humans. Using up the planet's resources, doing uncontrolled and simple-greed-driven inadvertent experimental geoengineering, pressing on each other, preying on each other, saddled with brains calibrated for hunting and gathering that, in the vast majority of individuals, struggle to keep up with Facebook and electronic banking or just where to find some more bushes to burn to make charcoal because that's what prior generations have always used for cooking fires.
I don't really know where all this leads. It's just a volcanic vent from a deeply submerged rent in the floor of a heavily depressed part of the social ocean. But for those of us humans who are young and strong enough, and decent enough, to still care about the Big Picture and stuff like a stable and sustainable and survivable presence of humans on the planet, there's gotta be some notion of how to rein in the Beast that's suckering and dragging us all into a seductive hyperspeed dead-end nothingness of selfishness and greed.
I do think it's way past time to try to educate ourselves on how to sever the pipelines and refueling links and power and data cables that connect the Bubble Economisticians in their View Properties from the rest of us, to starve what amounts to an enormous cancerous tumor and give the rest of us a chance to recover.