Friday, August 17, 2007

Where's the Outrage?

Of course, big news here in Europe as in the U.S. is the sound of markets crashing around the world. Regular readers of this blog will, of course, not be surprised by the downturn in the world's markets, and I'm sure you were duly prepared. We are ardent followers of Dick Cheney's investment strategies, and his guidance has been unerring in predicting the downturn of the U.S. economy and the loss of worth of the U.S. currency. We thank him for his foresight and advice to his fellow citizens that they should expatriate their funds as soon as possible. Perhaps, before long, we'll be sending more than our funds overseas. Keep a bag packed, I always say... It's been hard not to notice that the Europeans are far better prepared for a future of limited resources than we in America. More on that in a subsequent post.

In response to the market "turmoil," the European Central Bank and the Federal Reserve have pumped billions of dollars into the system in order to ensure liquidity. Jim Cramer, of "Mad Money" fame, has begged these governmental entities to rescue the market from its recent "volatility" ("volatility" = markets that fall, not rise, by hundreds of points). One investment banker is quoted here, to say, "The market had been clamoring for them to do something. They had to step up to the plate." One wonders what has happened to all our techno-optimist free-marketeers who decry when governments interfere with our free market incentives, or, as Steven Pearlstein notes, why the markets are now purportedly acting "irrationally" when only a few months ago they were wholly rational (i.e., when the indices were rising). In the same way that government welfare, health care, medical, and retirement policies encourage bad decisions and laziness on our parts, don't the actions of the European and American central banks propping up "the market" represent just this kind of government meddling in free market incentives? In effect, aren't they supporting the bad decisions and poor investment choices of sub-prime lenders and their clients? Financial firms knew full well they were making loans to indigent debtors; now that those loans have gone belly up, they and their investors go running to the oppressive "nanny state" for help. Like me I'm sure you're shocked - shocked - that there isn't more outrage over these intrusions by the government in our vaunted free market system.

Like others - some who do this for a living - I think we're in for an even wilder ride, one that will hobble even Bernanke's white horse...

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