Crusher vs. Cramer

Something constructive has come of the Santelli rant after all, albeit through a rather circuitous route. The above video is the meatier portion of the whole escapade thus far. After being taunted by NBC for just being a comedian, taking things out of context, and making funny faces, Jon Stewart had Cramer on his show and conducted the interview in a more serious and constructive manner than you will see any of the so-called journalists who leveled these accusations do themselves. Cramer was friendly and apologetic, so this must have been a hard thing to do to the man, but Stewart met any evasions with career crushing force. There have been responses from most of the major media and the White House.

CNN has a poll up that asks readers whether they see this interview as being a comic diversion or serious business. Comedy is winning 52-48. This shows a fundamental lack of understanding of what went down. A bit of background for those of you not well versed in investing; a short is when a broker sells you an investment they don’t own because they think it will go down. They intend to take your money, and when the stock goes down and you wish to sell, they just give you some of your money back and pocket the rest. Kind of like a Ponzi scheme, in the sense that if the stock market booms and everyone wants their money, we see a whole new scandal. This is legal. Some of what he was admitting to doing was not. Listen carefully to the clips Stewart plays, rewind if you have to, but make sure you understand what Cramer was admitting to. He isn’t a rogue bad apple. This is business as usual and whole system is full of rot. The government is rotten, the banks are rotten, as are the analysts, the brokers, the corporations, the media, and the investors. This isn’t something we can just make more rules against. This isn’t a failure of the free market. The people who make the rules are the same people breaking them. What we need is simple transparency. Jon Stewart has given us a taste.

Rick Santelli

I was recently baffled by the outbreak of support for a Santelli rant. You can find it on Thoughts Aloud, or The Intellectual Redneck. In this case, Santelli got a bunch of Wall Street investors to boo people with an extra bathroom for being the cause and recipient of government bailouts. He suggested we all go have  Chicago tea party in July in protest. And do what? Should we all go to Chicago and not pay our mortgage? It seems all you have to do to impress conservatives these days is get so worked up with mock outrage that the cameraman needs a spittle guard. The biggest problem I have with Republicans of late is their willingness to start running with torches and pitchforks without deciding first what their goals are. Going along with them  is like hunting with Dick Cheney.

I was ready to let the matter drop until I saw this response by Jon Stewart over at The Osterley Times, as well as politickybitch. I would have loved to see Santelli on the show, but he apparently didn’t have as much to talk about as he thought he did. Stewart goes on at length to show how CNBC analysts are almost as bad as FOX News analysts. Please, if you care about your money, don’t listen to these analysts; they clearly have a conflict of interest.

A Good Primer on the Causes of the Economic Crisis

This is one of the most understandable and least biased explanations I’ve seen for the economic collapse.

I have a couple of minor criticisms of it:

The holders of sub-prime mortgages are portrayed as fat, cigarette smoking welfare parents who just buy the biggest house they can see and predictably fail to pay for it. I’m of the opinion that most of the defaults were not on the primary residences of the poor, but on those individuals who were trying to leverage their own moderate wealth into bigger payouts by buying several homes. The failures came when the credit crackdown prevented them from being able to sell it for enough money to meet their obligations. Those sub-primes which were on primary residences were fought for tooth and nail, because those families didn’t just stand to lose their credit rating, they stood to lose their homes and dreams for the future. In their position I would take on several roommates before letting them take my home.

In one part of the video, *POOF* all the money disappears. Wealth doesn’t just disappear. It either went somewhere else, or in this case, wasn’t actual wealth, but rather was the expectation of returns everyone had on their over leveraged investments. The illusion that what they were holding was owned by them, even though it was not yet payed for.

Dirty Politcs by the Obama Administration?

In this interview Ron Paul talks a bit about the stimulus bill, and the process by which it was introduced. Ron Paul is an honest guy, so I’ll take him at his word until I see strong evidence otherwise. Obama made a campaign promise to publish all legislation five days ahead of time to allow congress and the public to peruse it. He didn’t do this for the stimulus. It could be argued that the stimulus is an emergency measure and should be exempt, but he also didn’t do this for children’s health insurance, which was hardly an emergency since it doesn’t kick in until mid-year. But this was more than a simple broken campaign promise; according to Ron Paul, the bill wasn’t revealed until the midnight before the vote, and was 1,000 pages. This was made worse by making only five hard copies available, which seems to me to be a clear tactic to prevent the opposition from being able to work together to get it read and discussed before the vote. Lets get this info out to the public at large. I want to see either a denial, an explanation, or a loss of credibility over of this one. If it is true, it is disappointing.

God, Trust, and Money

I’ve always been irritated with the ‘In God we trust” on our currency. Getting past the obvious hypocrisy and camels and eyes of needles, I felt like it was another attempt by religion to infiltrate governance. Niall Ferguson has changed my thoughts on the matter. In this clip on the Colbert Report, he explains the concepts of currency and  money in a fiat system.

This got me thinking and I did a little research:

In 1862, due to the Civil War, paper money was issued without the backing of precious metals.

In God We Trust first appeared on our currency in 1864.

Coincidence? I think not. God was not put on the currency to make people who have money believe in God, it was put there to make those who have God believe in the value of worthless paper; to give it the divine aura of trustworthiness. We didn’t need to trust God before fiat currency, we could trust silver and gold. No one was going to trust government, so the big G lent a hand.

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