Monday, March 17, 2008

Buddy, can you spare a dime?

I’m a little freaked out.

If I don’t make it to Scotland in May, it won’t be an equipment problem or, I’m pretty sure, a physical problem. It will be a money problem. Things are looking very shaky on this side of the pond.

The dollar is tanking, prices (even independent of the value of the dollar) are rising, the market is trending down, vast numbers of people are losing their houses, unemployment is up, and now the chickens are really coming home to roost. A few days ago, the Federal Reserve greased, with a $30 billion loan, the purchase of the giant, aggressive, (can I say criminal?) investment banking firm Bear Stearns by JP Morgan for $2 a share (worth $170 in January of last year). Bear Stearns has been, according to the New York Times, “a leader in packaging mortgage-backed securities” (yes, I think I can say criminal). Sunday night (Sunday night! Think they’re panicked?) the Fed lowered sub-prime interest rates by a quarter of a percent. All this, “[h]oping to avoid a systemic meltdown in financial markets.” (Today I see that the Bank of England has joined the party, covering financial firms to the tune of the equivalent of $10 billion in three-day loans.)

The Secretary of the Treasury (whom I knew very slightly in player, nice guy) essentially endorses the Herbert Hoover approach to financial disaster, and the President— increasingly stirring a kind of crazed manic energy in with his usual aggressive mendacity—tells him “You’ve shown the country and the world that the United States is on top of the situation.” In other words, “You’re doing a heckuva job, Brownie.” Or maybe “Mission Accomplished.”

The very best outcome we can reasonably expect is a massively expensive taxpayer bailout of the investment banks that have caused all the chaos in the first place. Given the ideological and unapologetic Ayn Rand acolytes in charge, “the very best outcome” is exceedingly unlikely.

So, I think I’ll be there in May, but if I’m not, you can find me selling apples on a street corner. Excuse me now while I go batten down the hatches.


Phreerunner said...

Hi Mark
Just back from 7 weeks in NZ (thanks for your message BTW) I am a bit surprised to find how much prices have gone up here in the UK.
That makes the TGOC even more attractive...I'm sure you have booked your flight so you've already incurred the only significant cost; all you'll need is a bit of dried food and a few friendly locals (in defiance of their hereditary monetary tendencies) to buy you a beer or two to dull the occasional pain.
All Best Wishes

Mark Alvarez said...

A bit of hyperbole there, Martin. There's really no way I'm not coming. But I really am spooked by what's going on.

Thanks for the great NZ trip blogging. Hope to see you in May!


Phreerunner said...

Don't let it get you down, Mark. The hyperbole was pretty transparent actually, but I couldn't resist the comment and I'll still be pleased to buy you a beer!
Have fun.