The Bailout's Hubris to Nowhere
I awoke this morning with a question in my mind that seemed important. I noted it.
I then read about the $20bn overnight bailout of Citigroup Bank.
My overnight question nagged me more for an answer.
I read about Citigroup hacking away at 52,000 jobs late last week, wondering what was the importance of these cuts, to save on pointless expenditures in a collapsing economy, or to impress our governments, the old and the new, that Citigroup could inflict very real, palpable and electorally measurable damage to the economy in the form of these massive layoffs?
The latter seems the extortionists' game of late.
The spoiled and rotten auto companies ganged up with the UAW last week and thoroughly impressed our governments they could lop millions of jobs and put at risk just about anyone in Congress who might be thinking about re-election two years from now.
I read further in the story about the Citigroup bailout how the current government with the approval of the impending government's representatives want us to believe they protected the American taxpayer by exchanging $20bn for preferred shares in citigroup.
This is a common theme in the Honest Hank Paulson bailout stories.
I checked the price of Citigroup preferred shares, noting this morning CPRF, a typical $25 denominated Citigroup preferred share paying 7.25% closed Friday, 11/21 at a whopping but not confidence inspiring $8.50
Let me assure everyone here, the American taxpayer is not being protected by buying preferred shares in Citigroup. Owners of similar shares are finding it more difficult every day just to give them away fast enough.
The numbers of the previous paragraphs indicate nothing short of an impending cataclysmic implosion at Citigroup.
And Honest Hank Paulson paid at least twice what he could have bought preferred shares in Citigroup for on the open market. But we're risking giving Honest Hank ideas here, I'm sure.
This was a giveaway of $20bn intended to shore up the balance sheets of Citigroup for a single day before the crash and burn resumes exactly as it has at Freddie and Fannie where similar $25 denominated preferred shares can today be purchased for well under a buck because dividend payments have been terminated.
I do not advise such a purchase at any price.
This roiling hilarity has been the extent of the effectiveness of the bailout thus far in every one of its attempts. We as taxpayers are far worse off having thrown all these many billions into a stiff wind headed straight toward the inferno.
And these companies fair no better, even if many of them continue to pay bonuses to their upper tiered staff because they would quit their jobs otherwise!
The question I awoke with this morning was, is this all just the hubris of the bailout to nowhere?
By this what I mean is, what about our economy is worth saving? Surely not Citigroup or Fannie and Freddie. These are just fly-by-night finance companies.
Does it really make any common sense that during the last Depression, a plethora of finance companies would have helped things out? After all, who would have they loaned money to, and against what collateral? That's a question for Barack Obama and Tiny Tim Geithner to dibble over.
Oh sure, it would be nice to recover from this obvious economic implosion, but to what end? What is it that we are willing to save, could we? What does our way of life lead toward, if we could steer it?
I mean, what does our way of life lead toward in the near term, were it to be saved?
And that's the question I awoke with this morning.
Is there anything worth saving other than our hides, and our souls so we can think about where it is we have been heading at such break-neck speed? Because I honestly don't think that paradigm of our collective motion holds much promise, even if we could re-capture it again.
It is almost as if the impetus behind the hubris of the bailout is intending to rebuild our economy, like some nightmare ridden and mindless civil engineers who might in their own panic try and quickly put the Tacoma Narrows Bridge back up in a single day exactly as it was right before it collapsed.
The common but insane theme seems to be, if we don't do this, a lot of good people aren't going to be able to get to work in the morning.
It's time to catch our breath. And it is time to think things over and rub solemnly our foreheads, eyebrows and our unbelieving eyelids.
Because a lot of good people are not going to get back to work in the morning regardless what might be done.