Key members of the family gathered last night privately (very, very privately) to make the hard choices. Ben Bernanke and Hank Paulson had been making all of the key decisions about the patient's care up until now, but for this last step, they felt it was appropriate to have everyone on the record:
Attending the meeting on the Capitol Hill were Democratic Senate leaders that included Charles E. Schumer of New York, Richard J. Durbin of Illinois, Christopher J. Dodd of Connecticut and Kent Conrad of North Dakota A contingent of Republicans was led by Mitch McConnell of Kentucky, the minority leader, and included Richard C. Shelby of Alabama, Jon Kyl of Arizona and Judd Gregg of New Hampshire.
House leaders included John Boehner of Ohio, the Republican leader; Spencer Bachus, Republican of Alabama; and Barney Frank, Democrat of Massachusetts. Members of the leaders’ staffs were asked to leave the meeting shortly after it began.
It was a very difficult choice, but the decision was made to put the patient in hospice care. No expense will be spared (taxpayer expense, that is) to make it comfortable during its final days.
Several members of the family have begun making final arrangements.
Some observers noted that this latest turn for the worse was not unexpected., Still, their shock was apparent as they reacted to the news last night:
The situation gets truly serious now. Every main politician in Washington is involved, many of whom have no idea what they're talking about. The reason they're there, to put it bluntly, is that legal lines are being re-drawn, and Bernanke, Paulson and Wall Street need permission to break -additional- laws.
The federal government has no authority to put AIG into conservatorship. Therefore, other ways and means have to be found.
The US government is as of this evening in official panic mode. Not that they will admit to it, just watch for their statements later tonight. The gravity of the issue is perhaps best illustrated by the fact that the politicians' staff members were ordered out of the meeting. That staff, of course, ironically (or should we say cynically) form the one and only barrier between their leaders and utter ignorance on what is happening....
What this means is the start of what you might call finance anarchy. The US government has lost control, that much is clear to everyone now, or at least those who've been paying attention. As I've said, the companies will now be picked off one by one through shorting and swapping. The free market reaches its self-chosen and inevitable climax.
AIG has liabilities that run into the hundreds of billions of dollars, if not thousands. The vultures know this, make no mistake about it. So an $85 billion rescue is but a joke. It won't lift nothing for more than a few hours, probably not even long enough to last till the Dow opens tomorrow.
There is blood in the water, and it's feeding time.
This will lead to the mother-fcuker of all deflations. The only possible outcome left in its wake will be individual and societal debt burdens so high that the Great Depression and the wars it engendered will seem and feel like a sun-drenched dreamy all-the-icecream-you-can-eat kindergarten birthday bash in Disneyland.
A few even criticized the family's choice, saying that other action might still stave off the patient's demise:
"They pretended they were drawing a line in the sand with Lehman Brothers but now two days later they're doing another bailout," said Nouriel Roubini, a professor at New York University's Stern School of Business.
"We're essentially continuing a system where profits are privatized and...losses socialized," Roubini said, adding that auto makers, airlines and other struggling businesses would no doubt be asking for government help too...
But Roubini said instead of handing out money to firms that made bad bets -- which could inadvertently encourage more risky behavior if companies think they have a safety net -- the government should be buying up mortgages and rewriting the terms so that households are not buried in debt.
Knowing how many have expressed concern about the patient's critical condition, the family did release a public statement:
First of all, we wanted to thank you for the many notes and calls expressing concern as Capitalism's health has continued to deteriorate. It has been a great source of comfort to the family that so many care so much.
After listening carefully to all the experts and specialists, we have reluctantly come to the conclusion that there is no point in putting Capitalism through any more painful treatments or requiring it to take its medicine. Instead, we're hooking it up to the morphine (cash) dispenser and turning it up to full throttle. Why not? The Capitalism that we've known and loved can't last more than a few weeks with new organ failures now occurring daily.
Preliminary plans are underway for multiple memorial services since we expect attendance to be too large for any one building to accommodate the mourners. So far, we've made arrangements for visitations to be held at abandoned factories in Toledo, Ohio; Flint, Michigan; and Greenville, South Carolina. There will also be a private ceremony for family only to be held in the Cayman Islands where most of us have stashed our cash.
For those of you who fear what your lives will be like once dear Capitalism is gone, we can only offer the following:
Time to start making your own arrangements.
This will be an initially frightening new adventure for some of you. Millions of us have traveled this path before you and can report that it's survivable, ultimately even liberating and enjoyable. You may find you like a lifestyle less focused on materialism and "career."
Rejoice that the end result of this collapse is to free tens of millions, including your children, from having some corporation squeeze the life out of them, then throw them away like they were a used tube of toothpaste.
Take a deep breath. Sit back with your favorite brew or herb, and contemplate how you might navigate this new terrain.
If you like, here's an oldie for you:
Wasn't Born to Follow
Written by carole king and gerry goffin
Oh I'd rather go and journey where the diamond crest is flowing and
Run across the valley beneath the sacred mountain and
Wander through the forest
Where the trees have leaves of prisms and break the light in colors
That no one knows the names of
And when it's time I'll go and wait beside a legendary fountain
Till I see your form reflected in it's clear and jewelled waters
And if you think I'm ready
You may lead me to the chasm where the rivers of our vision
Flow into one another
I will want to die beneath the white cascading waters
She may beg, she may plead, she may argue with her logic
And then she'll know the things I learned
That really have no value in the end she will surely know
I wasn't born to follow