Quote of the Day: “the stunning failure of responsibility”

The_long_emergency From the author of The Long Emergency, comes this just about perfect summation as to the present situation:

"Last week’s stock market meltdown suggested that a financial sector
rigged for the falsification of reality eventually enters a danger zone
where reality implacably reasserts itself, expectations dissolve, and
all that remains is the sour odor of fraud.

This long
episode of market mania, running for seven years, was based on the idea
that non-performing loans could be turned into money by removing them
from their point of origin and dressing them up in respectable clothes
– like taking all the winos in downtown Los Angeles, putting them in
Prada suits, and passing them off as the faculty of the Harvard
Business School. It was a transparently ludicrous racket and the wonder
is that America proved to be so utterly bereft of regulating authority
– not to mention plain decency and self-restraint — at every stage.

It’s really hard to account for the stunning failure of
responsibility. What you had was a whole industry that surrendered the
standards and norms that brought it into being and enabled it to
function in the first place. Mortgage lenders stopped requiring
house-buyers to qualify for loans; bankers stopped caring what stood
behind the paper they issued; dubious loans were bundled and resold
like barrels of rotten anchovies — in such numbers that no individual
stinking minnow would stand out — and the barrels were traded up the
line, leveraged, hedged, fudged, fobbed, and fiddled until,
abracadabra, they were transformed into so many Tribeca lofts, Hampton
villas, Piaget wristwatches, million-dollar birthday parties, and
Gulfstream jets.

It worked for the Goldman Sachs bonus
babies, and the private equity scammers, and for the corporate CEOs and
their board members, and for the politicians who parlayed their votes
into cushy lobbying jobs, and even for the miserable quants in the
federal government’s termite mounds of statistical reportage. It even
worked for about 18 months for millions of feckless US citizens gulled
into contracts for houses they could never hope to pay for, under
arrantly false and ruinous terms . . ."



Vanishing Point
Jim Kunstler
Clusterfuck Nation, July 30, 2007

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