I am not that bright. I have strong opinions and some people like the way I put them in writing, but I am not burning up the joint with my scary understanding of complex matters, especially those concerned with the current economic condition.
So, I look to people who are smarter and who can explain this mess in terms I understand. The President tries (and succeeds to a point) but this shit is crazy confusing. I'd normally turn to Hunter S. Thompson but he is dead. So, I look to Glorious Noise Upright Standing Man of the Year, Matt Taibbi because he reminds me of all those smart kids I knew from Kalamazoo College who smoked dope and could still kill their ACTs.
Taibbi's latest, The Big Takeover, attempts to put into simple language the myriad twists and turns of the economic disaster and later bailout by first the Bush administration and later the Obama administration. It's still confusing as hell but it's a great read and does get me a little closer to being economically literate, which is a key concern of Taibbi's piece.
Here's how Taibbi explains one of the more pedestrian bits of lingo in this story, the collateralized-debt obligation:
A CDO is like a box full of diced-up assets. They can be anything: mortgages, corporate loans, aircraft loans, credit-card loans, even other CDOs. So as X mortgage holder pays his bill, and Y corporate debtor pays his bill, and Z credit-card debtor pays his bill, money flows into the box.
The key idea behind a CDO is that there will always be at least some money in the box, regardless of how dicey the individual assets inside it are. No matter how you look at a single unemployed ex-con trying to pay the note on a six-bedroom house, he looks like a bad investment. But dump his loan in a box with a smorgasbord of auto loans, credit-card debt, corporate bonds and other crap, and you can be reasonably sure that somebody is going to pay up.
Simple, right? It is until sharpies and scam artists with MBAs figure out nobody is minding the store. Next thing you know they're carving these assets up so that only the most secure are identified and positioned to represent the entire box. They get a AAA rating and are off to the races!
Taibbi tackles the shucksters in similar, blunt force fashion. He describes AIG Financial Products numbers runner Joseph Cassano as, "a pudgy, balding Brooklyn College grad with beady eyes and way too much forehead, [who] cut his teeth in the Eighties working for Mike Milken, the granddaddy of modern Wall Street debt alchemists." Yes, the man who made Junk Bond Trader a household word is the mentor to one of the chief villains of our current meltdown. I half expect Gordon Fucking Gecko to step out from behind the curtain.
It sometimes veers into mass conspiracy territory, but dig the whole article when you have a half hour and enough bile built up in your ducts to really give these bastards the kiss they deserve.