How Much Is Nothing Worth? How Much Is Worth Nothing?

Today's DJIA plummeted like a stone, after a slightly off start the market listened to the plan put forth by Treasury Secretary Tim Geithner and thought about it for maybe ten minutes and then the bottom dropped out. We're down by 381 at the end of the day.

Some five months ago, as the problem was ramping up to massive market crash after massive market crash, I wrote a little piece on the possibility of a Techno-Socialist Bailout.

Boy, I didn't know the half of it.

The bizarre thing is, months later, about 90 percent of the problems remaining have to do with the fact that the old-line vampires of Wall Street have got their fangs in deep, and aren't about to let loose until the victim is so drained that the shuddering corpse flaps in the wind like week-old laundry in a Sahara dust-storm.

First, every time the government starts making any move that would restore order, Wall Street throws a tantrum. The financial system is playing all sorts of really cute games like declaring that they desperately need capital so they can lend, and then you capitalize them and they actually go ahead and pay out millions and millions in taxpayer dollars to the exact financial traders-in-the-trenches who moved the transactions that dragged the markets into wreckage and ruin. Then they claim that they haven't got any capital to lend. Then they get more money. Then they say that they're capitalized now, sort of, only they don't know what their tranches of mortgage backed securities ("MBS") are worth. So they can't understand their position. So they cannot lend. What's the hold-up? What is the value of those tranches of mortgage-backed securities?

Let me clarify something for you geniuses of finance.

They are worth NOTHING. They are worth nothing because the value of a thing is what it will bring on a market. When the market does not work, there is no value. If things cannot be bought and sold, nothing is worth anything other than what you might imagine in your mind it might be worth. There is no test of reality. It's all fantasy or might as well be fantasy.

The way the game is being played, the banks and financial firms all declare "oh we need this or we can't lend". You lend to them, and they go out and buy other banks and say "oh we needed their assets so we can call ourselves capitalized". Well, they bought a huge pile of fantasy valuation and it's factored into their equations, their books as they like to call them, in such a way that until that variable is isolated, every move they make comes out as adding apples and oranges but by the millions of barrels-full.

Now the sticking point is that they've got most of the apples sorted out from most of the oranges, but they refuse to loan the apples until someone buys all of the oranges, and the oranges all went seriously bad sometime around mid-September 2008. They are WORTH NOTHING. THE MARKET IS NOT WORKING. THEY HAVE NO VALUE. Nobody's lending, without lending nobody can buy, until people have loans and can buy, the market isn't working, nothing in that market has value until the market functions.

The problem is, the same sort of people who are begging for loans and then flying billion dollar bonuses out to the workers who played fast and loose with the nature of reality, this same sort of people who need to spend about the next 20 years in very bright sunshine, they are hanging onto the value of something that is valueless.

It's worse than valueless. It's worse than nothing. It's not even negative value, it's not debt, it's not anything from this universe. It's effectively ANTI-MATTER. It has to be gotten away from everything. It's a dead loss, it's worse than toxic, it's so valueless that you can't even pay people to take it even if you had all of the money in the world. It's not in the same spectrum, it's not even apples and oranges, it's apples and the Cosmic Destruction Principle. Only the apples are in barrels and so is the Inverse Big Bang. Only if anyone opens those barrels thinking they've bought apples, they unleash an antimatter black hole that doesn't suck, it blows. Nobody knows what's in either of the barrels until they open them up and these barrels are being sold, unmarked, by the barge load, or they were being sold by the barge load, until people realized that there's no money for a market, and without a market, neither apples nor anti-matter chaos in nicely-sliced sausage bombs has any value at all. That might actually be good.

The sort of crimes of incompetence we're witnessing are sufficiently punishable only by the equivalent of an Amortization Death Penalty if I must coin a phrase.

Take the paper from the people. Give them nothing for it. Shoot them if they complain.

Go bulldoze the properties so that nobody anywhere will think they have a claim to it, and nobody can claim against it, use it, charge for it, take payment for it. It has to cease to exist.

These lenders and creditors have been babbling about "how to resolve the toxic assets". They hold that resolution out of reach like someone teasing a dog to sit up and beg, and they've got the government and half of the public dancing on two legs and barking like a pool-full of rabid seals.

Once again, this is the Economy On Crack and in fact it might be better if we had a bunch of crackheads setting the policy. Because the crackheads understand something that the present economic system does not.

That shit is all GONE. So's all the money.

And either you're going to get used to it being all GONE, or you are going to go out and rob some people.

And right about now the people are dog tired of dancing and barking for a treat that isn't there, and are as tired of being robbed.

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Those toxic assets are worth literally nothing, because the value of a thing is set by the markey, and the market does not work.

Forget a bad bank. Forget a good bank. Forget the worthless stuff that's all gone anyway.

These financiers are like a crackhead that imagines that he's dropped a piece on the floor and he'll be crawling around for hours "doing the base chicken" until he comes down and his instincts tell him what his head knew hours ago. That shit is all GONE.

And the government has to get off its knees trying to help him find his imaginary crack.

Everything anyone is trying is just fouling things up worse.

Stop telling the crackhead doing the base-chicken that there is in fact something for him to find.

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This is where we are now: "...that strange interregnum, between the new world that refuses yet to be born, and the old world which is too confused to die".