"Don't be Evil" -- Tell that to Wall Street

After Google announced that it might leave China, Wall Street and other stock exchanges around the world reacted in typical fashion, by buying Baidu stock and selling Google stock. Baidu's stock jumped by at least 12%, while Google's slid by about 1%.

For the money-men -- the same people, let us not forget, who caused the real estate bubble, the ensuing collapse and rise in unemployment, who received billions from the government and are now giving each other BJs and bonuses -- these men (and women) are the core of what allows China to censor with impunity and keeps companies here way passed the point of violating their own principles.

In the world of capital, evil is rewarded and Wall Street's "golf clap" for Baidu's unexpected "good fortune" is a perfect example of evil at work -- or perhaps better said, a perfect example of the unwillingness to do good.

Sock it to 'em Google!

What Germans are saying

My homie Himmler from the 19th Step sent me this long article in Der Spiegel. Its in English.

Most people i know will be nodding along with this article, hollerin out like YEAH and YOUKNOWWHATIMSAYIN or whatever you yell out when you catch someone's vibe.

Of particular interest is Part 3, where Spiegel goes into the Economic Crisis and lays it down pretty clear and concise, giving us a look at the risks of shunning History:

As long ago as 1936, John Maynard Keynes recognized the risk that "speculation may win the upper hand" in the markets. Its influence in New York, the British economist wrote, was "enormous," and the situation would become serious "when the capital development of a country becomes the by-product of the activities of a casino."

It goes through the Bush Administration's many many ... ahem .. miscalculations and gives a projection of a future without America the Bully. They speak of the Fall.

But for me this is the fall of my young talented son; the setback that will make him a man. I will be there for him and help him shake it off. And if vultures come to pick at him in his weakest moment, I'll be there with an Army of Me.

Are foreign investors vultures? I would appreciate any comments on this:

The wealthy state-owned funds of China, Singapore, Dubai and Kuwait control assets of almost $4 trillion (€2.76 trillion), and they are now in a position to buy their way onto Wall Street in a big way.

But they have remained reserved until now, partly as a result of poor experiences in the past. The China Investment Corp., for example, invested in the initial public offering of the Blackstone Group, a private equity firm, and invested $5 billion (€3.45 billion) in Morgan Stanley. In both cases, it lost a lot of money.

But time is on the side of the Chinese. American stocks are becoming cheaper and cheaper. And the longer the crisis lasts, the weaker American objections to buyers from the Far East will become. In fact, it is quite possible that they will soon be celebrated as saviors.

Live and Let Die?

Imagine you are at a Texas Hold-Em table and a very rich banker steps up with a collection of cash from all corners of his derivative-laced empire. He bets hard on a 6-3 unsuited (bad bad hand) and loses it ALL.

And then, because his losses would mean he can't play anymore, he asks everyone else at the table to bail him out. Would anyone do it?

Imagine for a second that Company X is facing some liquidity issues and needs to tighten its belt for a while to get things flowing again. What is the very first thing Company X would do? Lay off workers. Company X would not think twice about putting 25 year vets of the company out on the street to fend for themselves in order to "keep the company competitive." It hurts to be on the other end of things ...

Now all of these big investors and bankers are telling the average Joe that, if he doesn't pony up for the Wall Street gamblers that lost their cash, then credit flows will halt, bringing the economy to a standstill. Because bankers are too scared to lend in a dangerous environment. Not because there is no credit, or because they are forbidden or unable to lend, but because it is TOO RISKY for them to lend in this volatile environment.

ie it is too risky for the thief to rob when the cops are out and about, but it wasn't too risky to lend when the cops were absent. Now that the bankers have been "caught" they don't want to lend. But they were happy to when risk was "someone else's responsibility."

An economist, naturally, will tell me I am simple minded and don't understand the intricacies of finance, or the global implications of Wall Street's collapse.

Well I actually have read a bit of Adam Smith and Max Weber and, according to these pillars of our so-called free market capitalist system, Wall Street must die. In a free economy, the Fed has no place, bailouts are anathema and those who gamble on unsuited 6-3 hands are doomed to fall by the wayside AND BE BOUGHT UP by those who did not bet on crazy risky ridiculous hands.

And the taxpayer who bet hard that his credit card would always be there for him, that his double mortgage on a house WAY out of his league would be -- eventually -- paid for by the magic hand of appreciation must also suffer the consequences.

It is easy for me to say all of this, because i don't have a credit card and i have earned my pithy cash on a freelance basis for most of my life. But i don't buy expensive things and i always have enough to get by, because i know that a bad bet on my part means homelessness. So i watch my ass. And i guess i believe that medicine that works probably tastes like shit. In the end, a live and let die approach to the US economy would result in a stronger economy. And the years in between -- well I moved here because i am ready to grow cabbage in my backyard with all the rest of the Americans. I could have easily stayed in China and avoided all of this ...

Anyway.

An economy such as ours today is not unprecedented. Read people, and see that the 1920s only had different fashion, different toys, different slang ... for years people have been telling us that living above our means, charging everything and so on will come back to bite us. And now it has. But no one -- least of all the bankers and traders and financiers who made it all possible -- wants to bite the bullet.

Chinese are known for saving their cash and living way BELOW their means (well most of them anyway, of course the whole nouveau rich dont apply). Here in Portland Intel has a big R&D center staffed with a grip of Indians. These kids make 100k a year, live four to a room, eat at home, drive Civics and send their money home to mama. Not too cool, right? but pretty damn smart, no?

China sent a planeload of cash -- a plane load of cash -- to Seattle to buy planes and another to South Africa to buy a stake in a bank. When is the last time a business in the US paid for something with a big pile of cash? Economists say business aint possible unless you have credit ... true, cuz ya aint got no money in the bank ...

Now i see late night scam-ads telling people: sell yer "worthless" gold and get cold hard cash. HAHAHAHA. oh jesus. sell gold for "cold hard cash."

This happened once before, when FDR told everyone in the US to hand over their gold. The only difference between the 1920s and 1930s and now is the slang, the medium and the face ...

History is meaningless to those who pay no attention to it, it holds all meaning for those who do ...