Hi and welcome to Hater TV. I’m your host, Lofi Nikita, and tonight, let’s think big – Apocalypse. Lately, the financial meltdown has a lot of people talking apocalypse, and they make it sound like a bad thing. But here at Hater TV we can find the silver lining in a sackful of dogshit, and I’m here to tell you the Apocalypse is chock full of potential. Sure, Wall Streeters are telling you that your world will come to an end if theirs does, but since when did the price of caviar figure into your budget? But before we get into serious gloating, let’s review history, because economic devastation is nothing new.
Many industries have already suffered an Apocalypse. The record companies, for example – for them, the Apocalypse came in the form of MP3s, those demonic digital files that proliferated all over the Internet and made music free, free, free! That was an Apocalypse if there ever was one – one day CD sales were a reliable engine pulling the gravy train, listeners on board buying little silver disks to replace the cassette tapes that replaced their vinyl disks, the studios full of artists crooning bogus lyrics crafted by tin pan alley hacks, producing reliable profits and getting nearly none of it thanks to phony bookkeeping. The star machine, in short, was a beautiful thing for the record companies, and now it’s broken, crashed, knocked off the rails and virtually abandoned by armies of musicians who, heaven forfend, are marketing their own music over the Internet, performing live, booking their shows, hawking their own CDs and t-shirt and foregoing the obligatory pilgrimage to Hollywood. They might as well just tear the sign down, let it burn in one of those fires that threatens to consume all of southern California in a real, physical Apocalypse that even the Governator might not be able to hold back. Ah yes, Apocalypse, but for who? The taste-makers of Sunset Boulevard thought that all of musical culture would collapse along with their profit model – listeners wouldn’t know what to listen to – musicians wouldn’t get recognition – radios would broadcast static – a tuneless reality would emerge – the sun would rise on a world devoid of melody. Right. That was so true that they had to sue their listeners by the thousands to prevent it from coming to pass. Thank god for those kind, self-sacrificing lawyers from the RIAA who held us back from the brink, who slowed the descent into chaos. It’s them we have to thank for the fact that the horrors of musical Apocalypse have not yet fully taken hold.
Broadcast television also faced an Apocalypse, and print newspapers as well. Classified ads have also been consumed in the same cataclysm. It has ever been thus. The relentless march of technology has consumed so many trades – the makers of arrowheads, the weavers of vegetable textiles, the armies of slaves who once picked cotton in the American south, the slave traders themselves, all people with jobs that were lost to the pitiless onward march of progress.
Now, it’s the money manipulators who have made themselves expendable – proved it right in front of our faces! They were supposed to be taking care of the money, keeping it ordered in neat little stacks, making sure it didn’t get lost, keeping the books accurate so that the money we saved didn’t lose value, so it would be there when we needed it – for retirement, for health care, for a rainy day, for our kids’ college education, for a flinkin’ vacation, for Christ’s sake. And now it’s gone. And where did it go? Well it didn’t actually just go poof! They stole it! They’re still richer than hell and trying to sell you the idea that if they have to step down a notch in the order of things your reality will go into the toilet. Hello! I hear a great flushing sound!
I heard on NPR that the total supply of all the money in the world was some very large amount in 2004, let’s say “X-Trillion dollars.” Today it is twice that – 2X-Trillion. That means that all the money represented by all of the efforts of all the civilized money-spending nations in the world over I guess about five or six thousand years was X-Trillion, and in four years our global financial geniuses doubled that! Obviously the financial geniuses “created” a whole lot of money that wasn’t connected to anything of real value. They created a fairy world of nonexistent riches out of what? Out of promises to pay money that no one would ever have.
The financial geniuses say they couldn’t figure out that all this would happen. Are you kidding me? Let’s think about this for a second – I’ve got a visual aid here – this is accounting, so don’t get scared – some people do it for a living. But some people, like the people on Wall Street, they can’t do it for shit, and I’m gonna show you how I know.
Here at the top it says TOTAL USA MORTGAGES in one column, and WAGES in the other column, so just imagine that the financial geniuses on Wall Street made a list of all the mortgages they were selling, these “adjustable rate mortgages” that start out cheap and get pricier and pricier as time goes on. So in the first year – that’s years down the side – in the first year, the total of all the mortages is a fourth that of all the wages, so people are spending a fourth of their money on their house bill, and they have the other three fourths to spend on other things. The second year, the mortgage adjusts up – it’s now half of the wages — too high – you can see right away that you’re going to get people defaulting. Then in the third year, the total of all the mortgages is going to be equal to all of the wages, which clearly won’t work. And then, let’s just say it keeps going up from there, and the math is actually like this – people stepping into homes and debt, not knowing what they’re getting into, or thinking prices will go up forever, and the bank will always lend on the rising house prices, but the guys at the head of the class, the guys in the mortgage market, they’ve got all the numbers, they know that there is just too much on this side of the ledger, and this can never work out.
So they can’t tell me they couldn’t add up all the mortgage obligations and subtract them from all the wages available to pay those mortgages. That’s addition and subtraction. You don’t need “derivatives” to figure that out.
So when the financial geniuses tell you they “create wealth,” yeah, it’s true, they do, but it’s hocus pocus, it’s not real wealth, it’s imaginary, unreal wealth.
But what happened was that people bought these mortgage obligations, thinking, look at how much money we’ll be getting as they adjust upward, higher and higher. The interest will go up on these expensive homes, and we’ll just rake it in – those homeowners will just have to pay or we’ll evict them – not thinking that homeowners just wouldn’t be able to pay those rates. Then, when homeowners started defaulting – and not in droves – over 92% of mortgages in this country are still paid on time – just think about that – I run a small business and if I collected 92% of everything I billed, I would be ecstatic – but just that eight percent default rate has thrown their whole business into a tizzy. Why?
Because ultimately the mortgage business isn’t really even about collecting all that interest. It’s about packaging up and selling more mortgages. And we’re all bought up here in the US of A. We can’t borrow any more. We would if you let us, but we’re just indebted up to our eyeballs. And the banks finally looked at this here ledger, and they said, Oh Dear. And the banks said “We’re holdin on to what we got.”
So the vast majority of people are totally in hock, and the people who have the real money aren’t letting it out of their little grip. Indeed, they want Congress to give them more, supposedly so they’ll start lending again. But the three little pigs are more likely to throw open the doors of their houses and invite the big bad wolf in for a cup of tea than the bankers are likely to start lending again. They got the cash – but here’s the irony – it’s disappearing. Why? Because they need the unwashed billions to spend it. It loses value when it’s not spent. Money is meant to move, that’s all it’s for is to serve as a “medium of exchange,” and when nothing’s getting exchanged it’s about as useful as blood in a corpse.
The financial geniuses helped only themselves when they inflated the universe with phoney value, and now, as if deflates, we must remember that the real value of everything comes from labor. Even gold in the ground is useless until it extracted, refined, and put on the market. A pound of grain will still only make a certain amount of bread, no matter what price you put on it. A gallon of milk doesn’t become two gallons when the price doubles. And when the magic of the money magicians explodes, leaving everyone covered in fairy dust that somehow smells suspiciously like bullshit, nothing has been lost except what was unreal in the first place. And it sure as hell doesn’t mean that we need to do whatever the magicians tell us to do beause if we don’t there’ll be an Apocalypse. Instead, we need to do what you’d do with any other swindler when you realize you’ve been had, you dropkick them the hell out of your life, and don’t give them another dollar or a minute of your time. And they just hate that.
Hi and welcome to Hater TV. That’s different from Gator TV, another channel altogether, so if you’re looking for reptiles, you’ll have to look elsewhere.
I’m your host, Lofi Nikita, here to drench you in ascerbic insights into all kinds of hateful things, of which there are more than enough to occupy twenty four hours of every day, but which I will boil down to a few delicious minutes of focused dislike such as you will not want to miss on any occasion.
I must caution you that I am an adult, and will not be wasting my hatred on childish matters. You have all of mySpace to satisfy petty dislikes. Here at Hater TV we focus on the truly despicable, the utterly hate-able, those almost beneath contempt, but not quite.
Let’s start out with those detestable bastards at AIG, the insurance company that has crept into our lives like a cobra into a child’s crib. AIG stands for American International Group, and it’s an insurance company that apparently has first dibs on your money, thanks to Henry Paulson, Secretary of the Treasury, not a bad man for someone who counts his millions in the hundreds, but otherwise not exactly a friend to humanity, who rushed to give AIG $85 Billion when the insurance behemoth felt a little faint after after gorging itself on mortgage dollars at the predator ball.
Suspicion is rapidly growing that AIG management lied about its true financial condition when it got the first infusion of $85 Billion to “save it from collapse.” A New York Times article quotes Don Vickrey, an analyst who says he believes A.I.G. must have already accumulated tens of billions of dollars worth of losses by mid-September, when it received the first $85 billion infusion. You see, that $85 Billion wasn’t near enough to keep AIG afloat. Not that they didn’t spend it wisely – hell they had to lay out a half a million in one night on a big party in LA for their “top producers,” including over $40,000 in “spa charges” – you know, those insurance guys, their work is so intense, and having to beg for money from the taxpayers was really hard on them, so you can hardly begrudge them a good LA-style massage.
Fortunately, even though they miscalculated how much they needed, there was still plenty left on the taxpayer credit card, so Hank Paulsen shot ‘em another $38 billion a few weeks later.
The Wall Street Bailout was rushed through Congress because we couldn’t wait – the economy was going to crater if they didn’t do something! You’ve noticed, of course, how much things have improved. I’d swear the people standing on streetcorners offering to work for food are getting younger.
It’s worth remembering, though, that AIG didn’t even have to wait for the bailout, and has gotten more than any bank. Sugar Daddy Hank Paulson invited AIG to the trough first, because most deserving recipient of taxpayer largesse. Well things tend to continue the way they started, and ever since they got the money, AIG has refused to account for how it’s spending it, although we found out about the party thanks to the spa workers, who couldn’t keep their mouths shut. We also know that AIG has socked money aside for bonuses, and declared that it may need more money soon. According to the Times, “Edward M. Liddy, the insurance executive brought in by the government to restructure A.I.G., has already said that although he does not want to seek more money from the Fed, he may have to do so.”
Well I’m sure they wouldn’t ask if they didn’t really need it. This kind of liberality on the part of the government is an invitation to fraud. Most people don’t even know how many zeroes are in a billion. They say if you started counting to one billion, one dollar per second, it would take a little under 33 years! AIG has received $123 Billion of your money so far — counting at the rate of a dollar per second, it would take 4,059 years to count through all that cash. Another way to look at it is that it constitutes the total income of 2,460,000 families. Another way to look at it is $408 for every man, woman and child in the United States. And AIG isn’t even telling us how the money was spent.
For $59 billion of the $72 billion A.I.G. has used, the company has provided no breakdown. A block of it has been used for day-to-day operations, a broad category that raises eyebrows since the company has been tarnished by reports of expensive trips and bonuses for executives.
AIG is an insurance company. The average yearly auto insurance bill in this country ranges from $800 to $1,200. But we’re not getting any insurance for our $408 — we’re not even getting any information about how they’re spending it. Meanwhile, the insurance companies can get the government to put you in jail if you don’t buy car insurance! These insurance companies seem to have it all wrapped up! As we used to say in Oregon when I lived there, “Pretty nice work, if you can get it.”