If you’re like me, you’re aware of this monumental financial crisis that we’re in the middle of, and even probably understand the magnitude of the peril that we’re in, but don’t really have any idea how to discuss the situation without sounding like a damn fool. So, in light of the bailout proposal being rejected by the House a couple of hours ago, I decided it was time to take matters into my own hands and do some investigative research. Fortunately for me, in the age of the Modern Jackass, enlightenment is just a GChat away. I approached one of my esteemed GMail buddies, an accomplished associate at a private equity firm (read: an Indian dude), and asked him for his reaction to the most recent developments in Washington, in the hopes of shedding some light on exactly how totally fucked we actually are. After the jump, his expert analysis on just that:
me: yo meng
me: so, i have a question for you
or, rather, several questions
i’m thinking about doing a piece on the economy for mojama
and i was wondering if you wanted to be my financial expert
but i’m hardly an expert
me: that’s fine, it’s modern jackass
the piece will basically be this gchat
MoneyGuru: names changed to protect the not so innocent?
me: but of course
MoneyGuru: aight, lets do this
me: cool man
the bailout proposal was rejected a little while ago in the house
and, consequently, stocks have plunged
let’s start with the basics
why did this happen?
what exactly does the dow measure?
and how far can it fall
before we all have to fight over road kill in the streets?
MoneyGuru: it all has to do with perception
investors viewed a rejected bill as negative for the economy in general
so they started a fire sale
its all optics
me: ok, so the market’s reaction is all symbolic?
MoneyGuru: not necessarily symbolic, it just shows how fickle investors are
me: what do you think about
Rep. Jeb Hansarling’s (R- Texas) statement that passing the bailout would put
the nation on a “slippery slope to socialism”
i’m tired of hearing this united states of france bullshit
or how Bradford and Bingely was purchased “nationalized” in the UK
the government will be getting equity warrants
they aren’t straight up buying banks a la mitterand
me: ok, so what are they doing?
what on earth are those?
to buy stock at a later time
i dont know the details but presumably the US Government (aka the tax payers)
will have the option to buy equity stakes in some of these companies
if they do, there are limits on executive compensation etc
the tax payers (aka the US Government) can go and sell those at a later date
me: to the american people?
MoneyGuru: presumably for a profit
to whomever; i.e. global investors
so now that the bailout’s been rejected
and, assuming that it doesn’t get passed with a second vote
what happens next?
MoneyGuru: good question
either they go back to the drawing board
or those opposed to it should damn well propose something they like better
the bail out is not ideal
smarter regulations a few years ago would have prevented that
something needs to be done or else the stock market will continue to fall
and these “toxic” mortgages will cause more institutions to lose money
me: do you put the bush administration at fault?
MoneyGuru: yes and no
its more complex than that
his whole house ownership policy
not sure of the exact name
me: don’t worry about it
it’s not important
MoneyGuru: but that was just misguided
how do we avoid becoming an international financial disaster?
can the dollar bounce back?
how long will it be before i can travel abroad and not get fucked in the ass
on my salary?
MoneyGuru: the american people took out far too much money
and saved not nearly enough
alan greenspan did very little to curb this as well
the dollar will bounce back
all these other economies are hurting as well
some sort of action, call it a bail out or a rescue or whatever, needs to be had
the perception that the economy is doing well is very important right now
the dollar is backed by faith
that people will pay their loans
that the US government will pay its interest on treasury notes that China owns
there is no more gold standard
there was a good article in the nytimes last week on that
me: you got a link for the readers here at modern jackass?
me: how much do you think the election will impact international perception of
the US economy and its ability to bounce back?
MoneyGuru: people said obama was acting too presidential by going to europe
but it seems like obama in the white house would bolster europe’s perception of
the US governement as well as our economy
me: amen, son
i feel that
MoneyGuru: regardless of what you believe, the last 8 years have in part led to
mccain hasn’t proved to me to change all that much
so why take that risk?
me: damn right
well, kind sir, thank you for your candor
me: you’ve been an invaluable help to the cause
Well, there you have it, folks. Personally, I feel like I’ve learned a lot here today. Just another brutally honest exposé from the news team you shouldn’t trust at all. Our most sincere thanks go out to our financial expert, who has asked that his name be omitted to avoid any association with this shoddy-ass operation we’ve got going here. But we are grateful nonetheless. Until next time, be well, and be frugal.