Do these 'derivatives' -- which word seems to resonate with 'Enron' -- actually represent something? Are they tangible goods/services, or simply a financial device to create a 'commodity' that has 'value' that can be 'traded/bought/sold' for a profit or loss?

Many many years ago, I worked very briefly for a commodities trader in Chicago, and because I was very young and even more ignorant than I am now, I had little clue what was going on at the Chicago Board of Trade or Mercantile Exchange. I got my first clue when one of the firm's clients came screaming into the office and wanted to know how in hell he was going to deal with the freight car full of eggs he had just 'bought.' He thought he was just buying and selling 'futures contracts' on the eggs to make money; he didn't think he was really 'buying eggs.' Well, one of his 'buy' contracts apparently didn't get 'sold' soon enough and he had actually bought the eggs.

Ever since then, I've kind of seen 'the markets,' whether stocks or commodities or 'derivatives,' as a casino on steroids. Most of the people buying and selling aren't 'investing' in the companies whose stock they buy; they're just trying to take money out of someone else's pocket by selling them something purchased previously at a lower price. There's no value added by the seller; if there's any 'value' added at all, it's from someone else's labor -- or someone else's lies.

When someone like this O'Neil person from Merrill Lynch walks away with $160MM or whatever, those dollars had to come from somewhere, didn't they? O'Neil didn't really create any value, did he? Or was the 'value' he created something that is somehow 'valued' by those who see robbing the working person of her/his job/cash as valuable?

How does this kind of system work? We know billions and billions of dollars are steadily flowing into the coffers of these Wall Street types and other CEOs. We know that these billions have to come from somewhere, someone. If it's funny munny from the govt., handed out in the form of low-interest loans from 'the government' to banks and other financial institutions, doesn't that de-value the real money earned by real working people? Doesn't that drive inflation? (Don't the taxes of the working people gund the government that's making those loan?)

When the Fed throws several billion $$$ into 'the economy' with no tangible goods or functional services behind those $$$, isn't that inflationary? And where are those 'rebate' $$$ handed out to the general population going to go? If they just go to pay off debts or buy short-term necessities -- food, utilities -- that will have to be purchased again in another month or two after the 'rebates' have been spent, how will that really boost the economy? If we don't have an economy that does anything, that produces anything, are we really just shifting money from one account to another, always going steadily from the poor to the rich, and when it all ends up in the hands of ten or twenty or a thousand greedy bastards, what happens? What happens to 'the economy' then?

If we have a defense plant that's making ammunition for The War, fed dollars are coming in to pay for the bullets/bombs, and the workers get paid and the owners/investors get paid. But the government takes the product of their labor, ships it off to Iraq or Afghanistan, and blows it up. So what do the workers have to spend their money on? Cheap crap from China? How does that 'help' our economy?

Am I crazy? Stupid? Both?

If a mortgage broker makes a loan to an underqualified borrower, then 'sells' the loan to a bank and pulls out a profit, what has that broker done to 'help' the economy? Oh, sure, a house is built and people are given jobs and paid to build the house, but then the borrower can't continue to make payments and all he's paid so far goes to the bank and he's left with nothing. The bank has his money, but the bank also now has a house that isn't worth what the bank paid to the construction company/developer/speculator to build it. The bank goes to the government for a bailout, or the insurance company that got paid by the bank to 'guarantee' the loan pays the bank and then has to get a bailout by the government, and ultimately the borrower who is working and paying taxes but not making enough to give huge profits to the developers and mortgage brokers and reinsurers ends up losing everything he's got and STILL paying taxes to bail out the people who screwed him over!

Again -- Am I crazy? Stupid? Both?

Used to be, if you were sick, you went to the doctor. You paid the doctor bill, you paid the prescription bill, you paid the hospital bill. Your money, your health care. Then the insurance companies came along to take the 'risk' out. You paid your money to them rather than to the doctors and pharmacies and hospitals. They pooled the money and 'invested' it so that if you got sick, they paid the bills. If your bills were less than what you paid to the insurance company, well, too bad, but at least you had the peace of mind knowing that if anything really bad happened to you, you wouldn't be stuck with the bills. If your bills were more than what you paid to the insurance company, well, then you won the gamble.

But now it seems that the insurance companies -- and the doctors and the hospitals and everyone else involved -- have become tools for sucking money from the ordinary people and spitting it right back out into the pockets of the rich. The fact that insurance companies can be good 'investments' seems, well, it seems oxymoronic, criminal, un-American. But I guess that's just corporate capitalism at work.

The prosperity was real -- but it was like a big ass party paid for with credit cards, wasn't it? Oh, we had a good time, all right, but now we have to pay for it. And paying off the bills for the party means, well, no more parties for a while. Belt tightening. Home-brewed iced tea instead of Pepsi; hamburgers instead of steak; home cooking instead of Red Lobster; making those shoes last another six months; driving the car until it's paid for; paying attention to price tags and looking for sales or just wearing those perfectly good last year's fashions; not throwing away that cheap coffee table and buying another cheap one, or maybe learning to buy good stuff that lasts and giving up the disposable 'gotta be trendy like the advertisers exhort' mentality.

I'm sorry for the rant. I went off on a tangent or three. But I sit here feeling like some kind of Cassandra or something -- it all looks so theoretically simple and yet no one seems to get it.

Or maybe the one who doesn't get it is


Tansy Gold