My recent scenes in the novel 9 Days Falling dubbed "Dark Matter" and "Hurricane Goldman" could have been "ripped from today's headlines." In it, I had the Chinese government as the first major counter-force to call the securities trading schemes of Wall Street what they were, quite plainly, a fraudulent casino game. Today it is the SEC that finally gets the nerve to bring charges of fraud against the mothership of all financial hocus pocus, Goldman Sachs. And of course, the markets react with a mid-day 150 point drop, greeting any news that their shenanigans might be subject to the scrutiny of law as bad news.
This alone should be clear and blatant testimony as to the integrity of our so called "free markets." Someone gets called on rule breaking, the market tanks, particularly all the financial stocks who are neck deep in leveraged toxic waste, the dredge of all their shadowy trading games. Everyone is wondering who might be implicated, and who might be next. Insiders, the folks with the real money, have been in a mad sell off of late. One can only wonder what they knew, and what they still know about the real state of the financial firms that engineered and delivered this crisis and near depression with their greed and incompetence. I must humbly say that I have known it, and written about it all for years now. To be brief:
1) The toxic and badly misnamed "securities" are all basically worthless paper.
2) The apparent normalcy of the current financial system is a thin facade covering a raft of fraud, of which the Goldman case is just the tip of the ice berg.
3) The banks and other institutions writing these securities down at "mark to fantasy" values are all basically insolvent. If they had to value them at real market values, the losses would break them immediately.
4) This fundamental fact, and the million foreclosures now working their way into the housing "market," will cause continuing deep erosion in house values through 2012.
5) The so called "recovery" is an illusion created by massive government intervention, bailouts, and unprecedented support from Fed "programs" aimed at propping up the collapsing mineshaft of the banking industry.
You don't have to be an economist or a genius to know all these things. You just have to read--and read the right blogs, not mainstream media sources.
One thing is clear. The firms that packaged up the bad mortgages, slapped a AAA rating on them, and foisted them off to pension funds, sovereign wealth funds and other dupped marks all know who they are. And yes, they really have to wonder who's next now.
It's day five in 9 Day's Falling, and the bells are tolling. Whether this is a turning point for all the kickbacks, Ponzi schemes and trading games of Wall Street remains to be seen. Let's wait and see whether or not there are any real prosecutions and convictions, and any real reform from the kabuki theater in congressional hearing rooms.
