Not An Insatiable Appetite for Risk

Here's a funny quote:

Outspoken Connecticut Senator Chris Dodd has been out front denouncing the "companies that form the foundation of our financial markets" for "their insatiable appetite for risk."

Nonsense. It was an insatiable and unrestrained greed that is at the foundation of this crisis. When ex-CEO Fuld of Lehman was quizzed by Congress about his approximately quarter-billion dollar compensation, he did not acquire that with an appetite for risk. He and others were richly rewarded taking a percentage of the massive and obscure risk that they sold to others. Fuld has his money; the market collapse doesn't affect him, assuming he keeps that money in cash or gold. The only risk he took on what that of being found out before he could make his escape. He won.

So that was the method used. Buy a broken-down car (risky and over-valued debt), sew up the upholstery, steam-clean the engine compartment and paint the body, then tie it all up with a pretty pink ribbon and sell a fleet of the crud to others. The transaction fees on $62 trillion are substantial.

When the cars wouldn't travel in a straight line and kept stalling out, the buyers began to notice. They then looked around and found that everyone's car was the same. The streets are jammed with useless hunks of painted metal, making it impossible for anyone to get from point A to B.

It'll take a lot of bulldozers and tow trucks to clean up the mess. The metal recyclers are choking on the supply.