Saturday, December 13, 2008


Turns out Madoff's unfathomable market skillz were just a Ponzi scheme after all. But hey ,what a ponzi scheme! At $50 billion estimate that's the mother of all Ponzies. In fact, I suppose that should make it (wait for it) TOO BIG TO FAIL. Just bail him out already, we must do it to save the economy! After all, you bailed out all the other financial Ponzi schemers, didn't you? Oh, I see the difference: Madoff, once caught, actually admited that what he did was fraud. It was too clearcut to deny, not enough layers of financial magic to trick the eye, no sophisticated financial merry-go-round to camuflage the simple truth. Damn, we can't have that kind of people around. The show is all about suspension of disbelief.

Where has all the money gone? Don't you realize the whole economy was itself a huge Ponzi scheme waiting to blow up? Don't you realize most of the money wasn't real to begin with?

A funny thing is, now that we are convenientely forgetting the trust-the-market mantra to bail out the creeps that got us in this mess, it slips your attention how well true market forces actually work: All this is just a huge flood, the market's way of cleaning out the trash, a wonderful demonstration of the power of its natural ecology. The crisis is doing nothing but exposing all the crap that was hiding under the carpet. Now the bubble has let out a little pus (you think it has blown? think again!) you realize how many of the revered masters of finance were nothing but douchebag schemers who never created a thing in their lives, merely played a zero-sum game to their advantage. They had no skills, not even at their random game, beyond those of a garden variety conman.

I share the same fears as everyone else, but often I think we should have let it all fail, and let the market sort it out. We need catharsis and a dose of reality. Or as a bard once put it: we don't need no water, let the motherfucker burn.