December 12, 2008
Bernard L. Madoff, a former chairman of the Nasdaq Stock Market and a force in Wall Street trading for nearly 50 years, was arrested by federal agents Thursday, a day after his sons turned him in for running what they said their father called "a giant Ponzi scheme."
Is more bad news out there? Is everybody lying? Can anybody be trusted at all?
The answers: Yes, Yes, No.
When will the bad news come, and what will it be? Who knows?
Cesspools of home mortgage loans, ephemeral credit default swaps, bankruptcies, bank closings, credit crunches, stock markets dropping faster than a bishop's trousers, huge financial firms trying to look in the mirror only to find out they were all smoke and no mirrors.
We are definitely on a losing streak. I don't know what is going to break it. Pundits say housing. Pundits say when housing starts turn up, then the economy and the stock market will follow, but I pose this simple question:
Who will be the buyers?
It is absurd to think that if companies continue to go bankrupt, if people continue to lose their jobs, there will be anybody to buy new homes.
It is also absurd to think that we can spend our way out of this depression, if no one has any money.
It is absurd to believe that any jobs are coming back from overseas.
It is absurd to think the US automobile industry will come up with a turn around plan by March 31. (If somehow, someone does, I vote for corporal punishment for those who didn't figure it out in the last thirty years)
It is absurd to think that autoworkers should make more money than schoolteachers, college professors and many doctors.
It is absurd to think that any CEO of a publicly traded company should make more than $1,000,000 in salary.
It is absurd to give multi-million dollar bonuses to "good executives" to keep them from leaving a failing company, when it was those "good" executives who put their companies in trouble in the first place.
It is absurd to give bonuses based on quarterly performance. The urge to make quota can produce can produce a distorted reality. For example, billing this quarter and shipping next quarter.
This is not organic growth, but what I like to Pinocchio numbers. Remember Pinocchio? The puppet whose nose grew every time he lied.
If it was only that easy today.
The USA: The United States of Absurdia
Dear God, in Whom we trust, let the scales fall from our eyes, so we may see the truth. We cannot fix what ails us until we know what made us sick.
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