7 Suspects

Lots of finger-pointing all around over the past two weeks as to who is responsible for the market turmoil. Here are some suggestions for everyone to mull over as we begin the new week:


7. The Tasmanian Devil?
Known for creating havoc in my favorite animated cartoons (and you thought this was highbrow commentary!), he is the ideal scapegoat because he is not real, and, from his dialect, an obvious foreigner. Ans Americans are pretty certain "damn foreigners" have something to do with it. And Congressmen - especially Dems - are as guilty as pandering to this fear as anyone else.

6. A Feather?
This has two potential meanings: the first is the classic Doonesbury reference to GHWB (better know Bush-the-First) as an invisible man, represented by a feather, foir it was this time that Mr Greenspan cut his central banking teeth, in what historians will view as the agent of near-omnipotent (unless your name was Lamont) Central Banker. Abyone who read David Marsh's book on the BuBa would concur. But the better metaphor (abd the one I am thinking of here) is the classical reference to the chaotic interconnected impact of a butterfly flutttering its wings in the moutnains over Tibet causing tornadoes in North America or unending torrential rains in Gloucestershire.

5. Aliens?
"The Great Gazoo?", "Q?". ET? The Sithe? Of course there is great explanatory power from the media's point of view in settling upon forces that are deemed plausible, but well-nigh impossible to prove (or disprove). I give this low probability as I really just wanted an exceuse to use this picture of Gazoo and see who, if anyone, remembers him. If it were "Q", having yet another laugh at humanity's expense, the volatility would be exacerbated, for he - like humans - requires instantly gratifying fun...


4. A Straw?
A straw...remember the "Krazy Straw" advertised on television in the late 60s and 70s? Everyone HAD to have one (despite there being no earthly way to actual wash them other than sucking detergent through them. Well this straw that might have caused the current mayhem is the straw that broke that camel's back...in this case that would be a realization by lenders that "The Bernanke Put" may be struck farther out of the money than "The Greenspan Put". Amen!


3. The Gipper.
Yes, the father of our current bubble in credit can be traced back to Mr Reagan, along with the laughable Laffer curve that encouraged deficits following a period of relative austerity under the Dems by ballooning government spending (mostly on defense) concurrent to chipping away at the higher marginal rates. Apart from an interlude of tight-money that followed a roaring late 80s bull-market in assets, temporarily removing their lustre, leveraging-up to buy real things has been a one-way bet, one that implicitly understands that elected officials will not voluntarily be seen to be fiscally sane. Of course, markets (the bond market in particular) used to play this role until a certain Dark Lord took the bond-market's manhood and put it safely into a lockbox.


2. Dr. Evil? - Macro-Man is known for coining "Voldemort" as the covert referrence of choice for the PBoC's market activities. The obvious metaphor for Hedge Funds, is Mike Myers stroke of genius, Dr. Evil (& Mini Me). There are of course some upstanding citizens out there, some of whom have even refunded performance fees earned prior to going nuclear. As for the more cynically Randian elements, YOU know who YOU are....



1. Pinball Al?
Oh I do not have space here, suffice to say, if it looks like a bubble, smells like a bubble, tastes like a bubble and is beginning to have rather rampant distributive effects upon the real economy, then it probably IS a bubble. I mean what was all this shite, hemming and hawing about not being able to tell, "maybe its not" , "productivity blah blah", state change yada yada..." Oh fer crying out loud EVERYONE even my elderly near-senile housekeeper could tell it was a bubble. OK, maybe not the sole cause, but I'd like to hear hear Mr greenspan say "mea culpa" just once, and say he regretted NOT telling the "W"-Bush admin to take their tax cuts and shove 'em else real rates would remain at levels that would insure "W" would never get re-elected in 2004. (Apologies to Prudent Bear for lifting their cariacature)