The financial markets meltdown is oh, so personal for me. At long last I have a contract on my house, and we have a contract on a house in Nashville, but I cannot even begin to exult. I make plans, I hired movers, but I cannot assume this is real or certain. Because even though all the buyers and sellers involved in my own personal little four-car train of sales is solid and are putting up large down payments, I am afraid that one of the banks involved will collapse before we can close. We are all just the kind of low-risk loans banks want. But the bank has to be there to lend us the money.
This is a financial panic, which means there is nothing rational about it. The entire system is over-leveraged. An enormous amout of funny money was created by frothing up the tiniest bit of actual mortgage debt into a vast confection of exotic financial instruments that, believe me, NOBODY understands. Earlier this year I covered the Financial Accounting Standards Board for six months. They are very smart, and very diligent, but even they didn’t understand these collateralized debt obligations, credit default swaps and the rest of the alphabet soup.
This is the most brilliant explanation of how it all happened that I’ve seen anywhere, although I apologize in advance for the racist example the comedians use to make their point. And I will point out that this first appeared in October 2007!
So the deleveraging process is going on now, and it’s as if somebody just slammed the oven door on the global financial system’s beautiful souffle.
Wachovia may be next and that’s my brokerage. I talked to them months ago and they said we’ll probably be OK for 99 percent of the money we have there even if it goes under. But if it goes under, and they told me then it was possible it would and just today its stock has dropped 28 percent, my money could be unavailable for an unknown period of time while it all gets sorted out. That timing could be disastrous for our sale/buy.
And speaking of fallen souffles, can you BELIEVE the complete vacuousness of Sarah Palin’s remarks about her foreign policy experience to Katie Couric? I have been trying to refrain from politics on my blog, partly because some of my darling camp friends are of a different persuasion, but I can’t help myself. It’s all too much. This is what has pushed me over the line. And I admit it’s a straw on the giant load of reeking, rotting straw on that poor camel’s back. But really! Can anyone take this woman seriously? I love the “Putin rears his head” line. And the “when we send those out” line? Send what out? Spy planes? God help us. It would be hilarious if it weren’t so scary. It seriously reminded me of this classic moment from the Miss Teen America contest.