Our Long National Nightmare is Beginning

A few more random thoughts on the financial meltdown:

• Hey! I thought things were under control! All those government regulations... massive bureaucracies... high-paid executives and consultants. What have they been doing all this time? (I'm afraid I know.)

• Hoist with their own petard: All these clowns, AKA “our leaders”, who – when times are good – claim to be “managing the economy” or “running the economy” are suddenly nowhere to be seen. Hey, I think it's only fair to hold them responsible for the current mess, since they claimed to be “running things” all along. Let's see how soon claims of that sort are made again – if ever.

• But it really is kind of like a reverse nightmare. When we were all asleep, and nourished with the narcotics of “growth”, “prosperity”, an ever-rising stock market, and ever-rising real estate prices, it all seemed so real, didn't it – so solid and so important. But like a dream it has all vaporized and here we are in a cold sweat realizing that our actual lives – not the dream lives we thought we were living – are going to be a lot harder for a long time to come. Did you ever think back on a dream and realize how ridiculous it was to be getting so excited about things that, as it turned out, had no significance – no meaning, and no substance at all, in fact. Now think about the mile-high pile of paper called “the stock market” and what all of that paper really represented, in terms of tangible things of lasting value. The answer is, basically, nothing. Now think about those few remaining dollars you're holding onto with an iron grip, unsure where to stash them so they'll at least stay intact, if not “grow” or “work”. You'd better figure it out soon, because our currency is just another mile-high heap of paper. It only has value to the extent people feel they can exchange it for something of real value. Little children know this. They don't want money, they want “things”. The minute they get a dime in their pocket, they run out to buy a dime's worth of “stuff”. Would that adults had intuitions that accurate! But no, we save and hoard currency on the theory that it's worth something, when it decreases in value daily even when times are good. What's going to happen from this point on is anyone's guess – but I say again, remember those Hungarians with wheelbarrows. How would Bill Gates like to have his entire fortune in Zimbabwe Bucks? We may all get to share his pain before long.

• It would be easy to start thinking that somewhere there is a group of middle-aged men puffing on cigars and laughing their asses off about how they put one over on the American public – not only directly, but also by way of the government and our “leadership”. Was it all a gigantic sting operation? It sure feels that way. But one can't always judge by results. Yes, a lot of people got rich quick, and bailed just before the crash. Does that make them master conspirators? (A similar argument has been made about Joseph Kennedy re: the crash of 1929. He came out of it smelling like a rose – um, so to speak.) It's also true that this crisis amounts to the most massive transfer of wealth from the middle class to the ruling class ever. But was that the intent, or was it just dumb luck? The only way we might start to get answers on this point is if Congress held a full-scale investigation. That would be the same Congress that's been in the back pocket of these same people for decades now, so... forget about it.

• There's another thing people tend to forget. As I've already pointed out, the only way the value of a stock is defined is by the price at the time of sale -- and that's only the value of _that particular piece_, not necessarily of all that firm's stock. Stocks don't just sit there increasing or decreasing in value. If no one buys or sells, the declared value stays the same. That's one thing. Another thing is that – and this should be obvious but it's apparently not – for every seller, there has to be a buyer, and vice versa. So when the media cry about a “massive sell-off” they could just as easily be describing it as a “massive buy-on”. When the Dow was over 14,000 there were just as many people buying as selling... and now that it's hovering around 8,000 there are also just as many people buying as selling. Now, the people who sold at 14,000 “sold high”, as it turns out... and the people now buying are “buying low”. In other words, they're doing just the opposite of what the panic-stricken amateurs are doing – or what those same amateurs were doing at 14,000, during their manic phase. Why doesn't someone ask the people who sold at 14,000 what they knew then that no one else knew? And even more importantly, why don't we find out what the people who are buying now know? I just can't get over the feeling that there's a gigantic scam going on here. Let me put it another way. I don't think the stock market is a zero-sum game in the strict sense (like a friendly game of poker among friends, say) – but it stands to reason that for everyone who has lost their shirt of late, someone else has ordered up a whole new wardrobe. Again, it could be a matter of luck, but...