Monday, September 15, 2008

If Wall Street Collapses, Pizza's on Me

The thing to bear in mind about the "melt-down" of all these investment institutions is that the mainstream narrative, that great amounts of "wealth" are being "destroyed", is a false one. The wealth never really existed.

Posted by IOZ at 10:29 AM | email »
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19 comments:

Frederick said...

Kinda like a Convention bump.

11:27 AM
Mr.Fundamental said...

`tis but a flesh wound!

11:27 AM
Montag said...

if "trickle-down" economics is so great for us little folks, what will "collapse-down" economics look like?

11:42 AM
Anonymous said...

Free donuts?....Probably not, but I could really go for a donut right now.

11:49 AM
Mandt said...

"Free donuts?." No way----free holes maybe!

12:06 PM
mds said...

No way----free holes maybe!

Makes sense: If there's no one left to pay the investment bankers, they'll start working for free.

12:20 PM
cthuluh's mom said...

I'm going to take your pizza and split the pizza into bonds, and sell the bonds on NASDAQ.

12:32 PM
I Kahn O'Clast said...

Having worked for Lehman for a spell (as well as other wall street firms) I can vouch that IOZ is correct.

12:54 PM
Brian said...

There is plenty of "wealth" it's all in the fees collected at each stage of the arcane castles of theoretical debt packages spun off by our Masters of the Universe. It's past tense, of course. Nobody is pulling blood from our wizards' pockets at this point. For example, the millions collected by the executives of the failed Fannie and Freddie-they still have their millions, no?

1:46 PM
Paul said...

So... it's being "un-imagined?" "De-reified?" Wall Street, they so po-mo, yo.

1:46 PM
Crusader AXE said...

It's all smoke and mirrors and beware of the great IOZ's cousin behind the curtain. What I find astonishing is that we're all doing this instead of creating shareholder/stakeholder value some how or another. That's what the North Koreans do: something goes horribly wrong and the government blames the US and the people give up some of their gruel and work harder....

Am I the only one noticing a certain Buddhist twinge to the whole financial markets thing? What exactly is a derivative anyway? It's a "financial instrument..." Oh, it's like currency. No, it's not. It's like a bond? No it's not. It's like a mortgage? No, not really. What the fuck is it? It's some imaginary madness...it's all Maya. Nothingness; illusion.

Ultimately, wealth is what you can hold. Cattle; gold; myrrh. Guitars. I'm cashing out the IRA and buying a $50K guitar so I can have something tangible that's overpriced and can't get me a cup of coffee.

1:52 PM
Aaron said...

It won't be the first time. Imaginary stuff gets destroyed all the time.

2:22 PM
AIG said...

hey, AXE, protect your investment! you should really consider an insurance policy for your guitars. call me. ;)

2:47 PM
Leonard said...
This comment has been removed by the author.
5:47 PM
Leonard said...

Wall Street in a nutshell:

wealth creation: "I promise to pay you one million dollars next Tuesday."

analysis: Wow, we're millionaires! No, not actually... we must discount the risk of default, which I think is... (drumroll) 12.37%! Exactly! Still, we're up over $800000, just like that!

wealth destruction: "I lied."

5:49 PM
almostinfamous said...

i think that's why 'they' call it fictitious capital.

Wall Street is the epic of fictitious capital, like the Iliad.

11:07 PM
TGGP said...

Perhaps an analogy is that after a train collision or airplane crash we keep receiving reports that more of the passengers died. They were already dead, but we didn't know about it at the time.

12:14 AM
Anonymous said...

For example, the millions collected by the executives of the failed Fannie and Freddie-they still have their millions, no?

Absolutely. Ioz is mostly wrong. It's not that the wealth never existed: it's that there was a premature transfer and it's too late for tears on the part of the transferreds-from. The illusions and scams and appeals to greed allowed a whole lot of people to salt away a whole lot of millions and billions. The ruling class always gets paid in real money, not i.o.u's.

2:02 AM
Cüneyt said...

Hell, when Enron happened, I remember telling my friends, libs, cons, and apaths alike: "but this is how our whole economic system works! What else is gonna happen?"

That sounds like I think I was saying something really impressive, but I just thought it was obvious, how spin and bluster and marketing define practically everything. I mean, wealth and power, economy and government, ought to be about nothing but facts, right? They can lie to us, as long as they know the real numbers, right? Right?

11:20 AM

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