Five Things You Need to Know: There May Be Strangers Among Us
Stock markets will ultimately go up for a while on this news; a strange and dubious coronation of unvarnished Socialism as the market's new Godhead.
Kevin Depew's Five Things You Need to Know to stay ahead of the pack on Wall Street:
There May Be Strangers Among Us
"All of this, I repeat, seems to me curious, obscene, terrifying, and unfathomably mysterious."
- James Agee, "Let Us Now Praise Famous Men"
A little past 10 this morning, all hell broke loose in the U.S. Senate. This was unexpected. It wasn't supposed to happen this way. Only moments before entering the Senate chambers and taking his place behind a massive oak table to deliver his customary Semiannual Monetary Policy Report to Congress, Federal Reserve Chairman Ben Bernanke had been confidently assured by Congressional staffers that everyone was on board. The Fix was in.
"Everything's all set, Mr. Chairman," one of the staffers winked. "You know the drill: housing contraction, financial headwinds, slowing consumer spending, inflation elevated, blah, blah, blah. Try to keep it tight... Oh, and don't blink so much during the Q&A, it makes you look squirmy and dishonest."
For the first hour everything ran like clockwork. In press rooms around the country, pre-releases of the Fed Chairman's testimony were taken down off the Federal Reserve's web site and immediately transcribed into "breaking news" bulletins highlighting the Fed head's main points. Their role in the scheme complete, bored reporters played solitaire on their computers, ate doughnuts and watched viral You Tube videos of cats falling out of trees while televisions in the background ran images of Bernanke delivering the words exactly as scripted.
The Fix works both ways. On one side, politicians get to glide through the televised spectacle of these kinds of hearings essentially worry-free, with only minor facial twitches and occasional jitters caused by the interaction of Prevacid with Klonopin. On the other, the press gets to kick back and ride The Fix into the next deadline with pre-scripted stories and mock outrage.
But Good Lord, not on this day. Clearly, some fool forgot about Kentucky Senator Jim Bunning, or "Crazy Jim" as some of the Bluegrass State locals call him. And for that, there will be hell to pay.
If some low level Senate staffer had simply bothered to check the Senate Q&A lineup, they would have seen Senator Jim Bunning's name lurking on there and this whole unmitigated disaster could have been avoided. Well, too bad. Even as you read this, some poor bastard in Washington D.C. is tearfully clearing out his desk, his staff-issue Blackberry confiscated. If his office land line hadn't already been disconnected he would be able to hear his landlord personally tell him about the eviction, but he'll find that out soon enough. So, what should have been a walkover for the Fed Chairman instead devolved into Ben Bernanke's own personal Waterloo.
The first delivery from Bunning, a former Hall of Fame pitcher, came screaming hard at Bernanke, like a stray slider, boring up and in, seeking one of two things: either a human jawbone to splinter, or the dead space between the batter's head and the backstop.
"[T]he Fed wants to be the systemic risk regulator. But the Fed is the systemic risk," Bunning said. "Giving the Fed more power is like giving the neighborhood kid who broke your window playing baseball in the street a bigger bat and thinking that will fix the problem. I am not going to go along with that and will use all my powers as a Senator to stop any new powers going to the Fed."
It was an awful scene. Bernanke visibly flinched. How could this be happening? How could something so simple, so right, so scripted, go so wrong? Behind the scenes, some Senate staffers fainted and others vomited into trash cans while the more seasoned veterans lobbed angry accusations at one another, "Who forgot Bunning! Why is Bunning not on board!"
But it was too late. By this time, Bunning was already deep into Fannie Mae (FNM) and Freddie Mac (FRE). ""[L]et me say a few words about the GSE bailout plan," Bunning continued. "When I picked up my newspaper yesterday, I thought I woke up in France. But no, it turns out socialism is alive and well in America. The Treasury Secretary is asking for a blank check to buy as much Fannie and Freddie debt or equity as he wants. The Fed's purchase of Bear Stearns' assets was amateur socialism compared to this."
"There. He said it. God help us now," a dazed staffer muttered. By this time the chaos had given way to quiet sobs. Yes, the cat was now out of the bag. This is the risk we take when The Fix goes wrong.
This business is all about finding an edge. As a native Kentuckian and an official member of the Honorable Order of Kentucky Colonels, my edge may have been handed to me in some weird convergence of God's grace and Appalachian circumstance, but that doesn't make it any less real, or powerful. With a shared heritage grounded in violence, a wariness of strangers and hair trigger tempers, Kentuckians have an unspoken understanding of one another.
What I do know, what Crazy Jim knows, is that there may indeed be strangers among us. Crazy Jim told a Paducah, Kentucky television station exactly that nearly four years ago; "There may be strangers among us." It was under vastly different circumstances, of course. At the time, Crazy Jim was in the middle of a brutal and ugly re-election campaign where he was accused by the Washington Post of comparing his opponent, Daniel Mongiardo, to one of Saddam Hussein's sons, but that's all so much water under the bridge. Today, there may be strangers among us. The point is well taken.
But all we really want to know is how's it gonna end?
Stock markets will ultimately go up for a while on this news; a strange and dubious coronation of unvarnished Socialism as the market's new Godhead. But there will still be bank failures. There will still be foreclosures. There will still be hardship. And then a new, dark age of gripping fear will briefly descend. Citizen will turn against citizen for no apparent reason; "breaking red," as we say in Kentucky. The Fear will force us to congregate into small groups where we will peer anxiously through shade darkened windows on high alert for strangers that never come. Like a man without a country, for a short time an entire people will mourn desperately for something that never really existed. It was all just an idea anyway, an idea as thin as a wisp of aged and dried out parchment. The good news is the death of an idea comes fast and hard, leaving only the slightest trace of an unrealized outline behind. That is the way it has always been, and that is the way it shall always be. There may be strangers among us, but soon we'll drink as friends. Share and share alike.
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