Tuesday, March 24, 2009

The Money Promoter

Mr. Avaricious Greed, the chief executive of Money Promotions Inc., was taking some of his clients around his office. His financial clients were looking for new products to sell within the monopoly money system.

“I have two great products for you today,” said Mr. Greed. “These two great products were touted as investments in sub-prime mortgages. But sub-primes have turned into a financial debacle. But, I believe they still have value.

“The first one is Asset Backed Commercial Paper (ABCPs). It is, or was, all the rage at one time, but it still has value, even though its value has diminished (or to put it bluntly: tanked). It is still a good buy and of course the “assets” are fully backed with the great unwashed, oops, I mean taxpayers’ dollars. I recommend ABCPs highly and though there have been a lot of losses, profits have also been made. In fact, one financial promotion oops I mean institution made billions in profits selling this ‘investment.’ as a ‘good deal’ while selling itself out of it at the same time. That was good market planning at work! Eh! Well done, I say. Where there is greed there is money, and money can be made out of manure if it is packaged properly. Of course there were massive losses in ABCPs but the financial system will always be stable as long as there are governments out there with taxpayers’ monies to bear the burden of our financial losses in these great ‘assets.’ This is the fall back strategy of the ‘free markets,’ government bailouts. Now on to 'our next great investment vehicle.

“Here we have Structured Investment Vehicles (SIVs). These are vehicles that do not need to be gassed up, just lots of promotional gas. Just kidding, of course. This is a fine product dreamed up by the finest financial minds in the marketplace of ideas. They are monied vehicles—without tires, that’s just a silly joke of course [much laughter ensues]—which borrow in low value paper currencies and then lend out in higher value paper currencies, the profit can be made in the spread, it’s a sort of paper-chase. Some buy, some sell, just like playing monopoly and of course there are bankers involved so it has great respectability. There have been massive losses in SIVs, but never fear they are still safe. In fact, it has been reported that a ‘bailout fund’ was proposed of billions and this would be known as the ‘Super SIV’ or ‘Master Liquidity Enhancement Conduit’ (MLEC). So you see, if these ‘investment’ vehicles are properly named, there will still be an incentive to buy. I mean, you would not call any of these funds names like, ‘Fantastic Resources Accumulated Under Debt,’ or FRAUD for short. They just would not sell. So remember, it’s all in the packaging and promotion. And as I said earlier, should you lose out on this one, governments will use the working stiffs, oops, I mean the taxpayers’ funds, to bail you all out. This, as I said earlier, is the wonder of ‘market competition.’

“I have showed you today our two biggest money spinners. Billions have changed hands over ABCPs and SIVs so you can see these are money makers and money takers. You have to be a ‘risk taker’ to make money. Just look at many of the CEOs who were involved in ABCPs and SIVs, they got severance packages in the millions even though their paper ‘losses’ were in the billions. What promoter could beat that, I ask you? But all power to the CEOs, they are ahead of the game and still in the money. Therefore, all is not lost, and it has been reported that: ‘The Federal Reserve, in concert with the European Central Bank and the central banks of Canada, the U.K and Switzerland, in December put in place a number of extraordinary measures to make sure that the financial markets had sufficient funding’ [emphasis added].

“This looks like a buy signal to me for the commercial paper market, so how can one lose? Get in there and buy, buy, buy. Government money is a boon to any promoter. I guess what I am trying to tell you, or sell you, is this: load up on these ABCPs and SIVs, just keep shuffling that paper out there, keep passing the buck as the saying goes. For the buck does not stop here. It only stops at the door of the taxpaying public who will pick up the tab for keeping the ‘financial markets’ working. But, that’s what governments are for isn’t it?”

Stephen J. Gray
January 7, 2008.