It's still the same old story
A fight for love and glory
A case of do or die.
The world will always welcome lovers
As time goes by.
-Herman Hupfeld, 1931
In spending or guaranteeing over $10 trillion for the benefit of Big Finance, the Establishment has adapted the script officially judged to be the greatest in movie history, that of "Casablanca".
Rick: There's something you should know before you leave.
Laszlo: Monsieur Blaine, I don't ask you to explain anything. . .
Rick: She (Ilsa) came there for the letters of transit. . . She did her best to convince me that she was still in love with me, but that was over long ago. For your sake, she pretended it wasn't, and I let her pretend.
Laszlo: I understand.
Rick: Here it is.
(Rick hands the letters of transit to Laszlo.)
Laszlo: Thanks. I appreciate it. And welcome back to the fight. This time I know our side will win.
Ilsa (to Rick): God bless you.
Renault (to Rick): Well I was right. You are a sentimentalist.
Rick: I don't know what you're talking about.
Renault: What you just did for Laszlo, and that fairy tale that you invented to send Ilsa away with him. I know a little about women, my friend. She went, but she knew you were lying.
Rick: Anyway, thanks for helping me out.
Renault: I suppose you know this isn't going to be pleasant for either of us, especially for you. I'll have to arrest you of course.
Rick: As soon as the plane goes, Louis.
(Major Strasser, the Nazi, appears and tries to call the control tower to prevent the plane from letting Victor and Ilsa Laszlo escape.)
Rick: Get away from that phone.
Strasser: I would advise you not to interfere.
Rick: I was willing to shoot Captain Renault, and I'm willing to shoot you.
(Rick shoots and presumably kills Strasser. The gendarmes appear.)
Louis (to the gendarmes):
Major Strasser's been shot.
(Louis and Rick look at each other in one of the greatest pregnant pauses in movie history.)
Louis (resumes speaking): Round up the usual suspects.
Gendarme: Oui, mon Capitaine. . .
Louis: Well Rick, you're not only a sentimentalist, but you've become a patriot.
Rick: Maybe, but it seemed like a good time to start.
Rick (ending): Louis, I think this is the beginning of a beautiful friendship.
Why this trip down memory lane? First, the analogy. Team Bushbama Hankgeithner ben Bernanke is/was willing to do anything for the cause, just as Rick was willing to kill his friend Louis. Big Finance is Laszlo. The letters of transit are the bailouts. The goal in Casablanca was to spring Laszlo so he could lead the Resistance from America. The goal for the current enablers of Big Finance is to do anything to keep them alive to keep gambling and lending (i.e. looting); whether the corporations are profitable or not is not critical.
(Please ignore that Laszlo is the hero of "Casablanca" and Big Finance an anti-hero.)
Here's the sudden news that reveals the fraudulent nature of the stress tests, recent Big Finance "earnings", and the like: Bloomberg.com reports that Fed Said to Raise Standards for Banks’ TARP Repayment.
Federal Reserve officials surprised bankers in the past week by demanding they raise specific amounts of new capital before repaying taxpayer funds, applying a more stringent assessment than the stress tests in May.
JPMorgan Chase & Co. and American Express Co. were told they need to boost common equity, less than four weeks after being informed they had enough to withstand a deeper economic slump. Morgan Stanley was directed to raise more funds after already selling stock to cover its stress-test shortfall. One firm was told only yesterday, people with direct knowledge said.
The Laszlos were indeed surprised by Rick's maneuver. However, the idea that Big Finance was surprised by any Fed or Government actions is hilarious. This has been a carefully coordinated public-private operation, planned as minutely as Desert Storm was in 1991. In private, Big Finance definitely mouths "God bless you" to Team Bushbama and Team Fed.
Back to the not-so-curiously times Bloomberg article:
The central bank’s further scrutiny signals concern at the political and economic dangers of having a bank boomerang back to government aid once it leaves the program. . .
The Fed’s demands also partly reflect the biggest three- month rally in U.S. financial shares in at least two decades, which has made it easier for banks to raise the funds . . . (Ed. Obviously the Fed and the Feds caused the rally.)
Morgan Stanley, JPMorgan and American Express raised at least $7.7 billion this week as they learned of the new hurdles to leave the TARP. (Ed. Surprise, the stocks were up at least double their recent lows when they raised money!)
The Fed, Treasury, market manipulation, the supine folks at the Financial Accounting Standards Board, and Wall Street itself created the lie that the first quarter of this year was a great quarter for Big Finance. The idea that with surging loan losses and minimal demand for new loans that there could be huge profits for mega-bank holding companies is patently ridiculous; it was all a lie. The stress tests are suddenly not good enough because the operation has succeeded; the money has been or is about to be raised with minimal dilution. Of course, the Chieftains of Industry were brave enough to buy their companies' stocks at the bottom. No inside knowledge, of course!
Now it's on to the next Big Lie, the Public-Private Investment Partnership. Eventually Tim Geithner will walk off into the fog holding hands with J. P. Goldman.
Being in love means never having to tell the truth. And never having to say you're sorry. And never having to worry if the authorities will arrest you. The consequences of any crime you may have to commit for the Cause will be pleasant.
It's still the same old story.
Morgan Sachs uber alles.
Copyright (C) Long Lake LLC 2009