Perry Glasser

Bailout Hijinks

In Business, Politics, Wall Street on October 9, 2008 at 11:35 am

Weasels who acted to nationalize AIG a few weeks ago discovered today that the pricetag for putting The Firm Too Big To Die on life support has leapt from $85 billion to $123 billion. Like Inspector Renault in Casablanca, they are shocked–shocked!–to discover that gambling was occuring in the reinsurer’s back offices.

At least, that’s the pricetag they are willing to admit to, so far.

Weasels prefer words like bailout because it sounds kind, even heroic. Since the chief obligation of a Weasel is to be re-elected, being perceived as kind and heroic never hurt–though actual kindness and heroism need not be embraced. Note carefully that no Weasel was ever elected or re-elected for honesty or plain speaking. They don’t employ advisors called spinmeisters for nothing.
Weasel re-election is, however, in fact, accomplished in two ways:

  • by deceiving Citizens into believing Weasels work on their behalf;
  • by actually working on the behalf of deep-pocket Buccaneers who fork over sufficient money to deceive citizens. Bands of Buccaneers do this via trade organization, lobbyists, etc.

Dollar$ hastens to point out that AIG was not bailed out. It was nationalized. Neither heroism or kindness was in play. We showed up at the fire sale and we bought the ruins. We bought 80 percent of the reinsurer.  We cannot now “lend” ourselves an additional $44 billion–who is paying it back?? You cannot take money from your left wallet and put it in your right as a loan. This, folks, is a change in cost of a sale price, AFTER the deal was closed.

Either we bought AIG in expectation of an eventual profit, or we have bought a very, very expensive ruin in order to quell panic. Well, we have the panic anyway, and we will pay the full price either now or later. In what is correctly being called a crisis of confidence, a little confidence in Weasel accounting methods might go far.

Don’t hold your breath. Do hold your nose.

Look–if AIG had been an American concern in one of those weird places where short, swarthy-skinned people have the bizarre idea that they are masters of their own destiny, we’d have invaded at any hint of nationalizing our property. We’d have sent the Marines to live in their houses. GPS eyes in the sky would be so focused that no one could tie a burnoose oddly without the Pentagon going on Red Alert.  Our Air Force would be deployed to bomb the crap out of shepherds in need of the blessings of democracy, only incidentally defending our right to make profits on oil, bananas, coffee, pistachio nuts, sheep dip, or whatever vital American interests shepherds had been nationalizing to their own nefarious devices.

Back home, the sudden, dramatic increase of 44 percent on the AIG pricetag and its discovery in mere days can be explained in only a very few ways:

  • the Weasel accountants who estimated the original costs were inept or engaged in fraud;
  • the AIG accountants who supplied Weasel accountants with misinformation were inept or engaged in fraud;
  • Weasels are inept and engaged in fraud;
  • Weasels are in fact engaged in a bailout–of Buccaneers.
  • All of the above.

Missing by 44 percent takes some doing. This is akin to throwing a wild pitch and somehow braining your own left fielder. Who is at home…in another state…on the disabled list… nowhere near the ballpark.

Expect to see Weasels on CSpan, CNN and wherever arc lights shine. They will make angry, indignant noises; a good Congressional Invetsigation Circus and Clown Show helps Weasels with their primary goal in life–which is to remain elected as Weasels.

Since actual action is risky to Weasel secondary goals, expect nothing to come of it–except the bill to pay for the Congressional Invetsigation Circus and Clown Show.

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