By Bill Bonner, Chairman, Bonner & Partners:
Stock markets have been slipping all over the world, especially in Europe. But outside of Russia, and maybe Greece, so far there is no sign of real panic. That will come later.
We’re spending this week in Washington, zombie watching. Yesterday, we spent the evening in the lobby of The Willard hotel. A choir sang carols.
Hark the herald angels sing,
“Glory to the newborn King!”
In one corner a group of cronies sat negotiating a deal; whose ox they were goring we don’t know. Pairs of women sipped their champagne and nibbled their cookies. A few tourists gawked at the splendor of it: a Christmas tree worthy of Yosemite… ceilings rivaling those of the Louvre.
Your editor – his laptop in one hand and a glass of Cabernet in the other – sat in another corner, enjoying the singing and inconspicuously recording events.
As Timeless as Prostitution
Politics is the leading industry in this town. When JPMorgan Chase CEO Jamie Dimon was on line on Thursday, the other end of the line was here. Dimon was adding his backing to the so-called “cromnibus” bill – which, among other things, again allows Wall Street banks to take risky derivative bets with consumer deposits.
Here’s one of our dear readers with the story:
The US House passed a bill repealing the Dodd-Frank requirement that risky derivatives be pushed into big-bank subsidiaries, leaving our deposits and pensions exposed to massive derivatives losses.The bill was vigorously challenged by Senator Elizabeth Warren; but the tide turned when Jamie Dimon, CEO of JPMorgan Chase, stepped into the ring.
Perhaps what prompted his intervention was the unanticipated $40 drop in the price of oil. As financial blogger Michael Snyder points out, that drop could trigger a derivatives payout that could bankrupt the biggest banks.
Compared to New York, D.C. is remarkably quiet. Not too much traffic yesterday. Few people on the streets in the downtown area. It was quiet, calm, peaceful – like the beginning of a horror movie. Our hotel has a completely different clientele and atmosphere than the boutique New York hotel we stayed in last week.
In Lower Manhattan we saw “hipsters” and artists… publishers and filmmakers. Everyone seemed young and fashionable. The shops were busy. The old buildings – with their industrial windows and loading docks – recalled yesterday’s. Washington, on the other hand, is as timeless as prostitution. Here, men still wear business suits and ties. Women are not quite as chic as New Yorkers.
All look as though they take themselves too seriously… as though the future of the planet depends on what they did today. They must be trying to compensate for the fact that their work – and their lives – are parasitic and pointless.
They come and go in the hotel lobby. One is off to try to pull a little pork out of a Nebraska senator. Another is looking for help with a Pentagon contract. They are all zombies, we reckon, all getting without giving anything of any real value.
Jamie Dimon – Hero
Dimon must be a hero to this crowd…
He is not in politics… and not even a full-fledged master of zombie arts. After all, he must spend some of his time at JPMorgan Chase offering real services – or at least the appearance of them – to get clients to part with their money.
On Thursday, he did the rest of the nation a grave disservice. But in helping to push Republicans and Democrats to the scammy bipartisan “cromnibus” bill, he helped keep the lights on in Washington. The federal government was getting ready to shut down. Then Dimon got on the phone. It was probably a tit-for-tat payback. The feds helped keep his lights on in 2008. Now, he has repaid the favor.
Colleague Dan Denning, newly returned from 10 years in Australia, is appalled. He was a congressional page 25 years ago. All of the twisted roots he saw sink into the D.C. earth in the 1980s have now grown into full-sized trash trees. They now cast their long shadows over Washington… and the nation.
It was in the beginning of the 1980s that President Reagan’s budget director David Stockman lost his famous battle for the soul of the Republican Party. Stockman believed the GOP should remain true to its best traditions and should demand balanced federal budgets. But the progressive wing of the party was more interested in winning elections and distributing pork than in fiscal rectitude. The Reagan administration went on to run some of the biggest deficits in history.
And that was just the beginning.
Among the bits of grease in the $1.1 trillion spending bill passed Saturday night was a provision allowing Dimon’s Wall Street cronies to “donate” up to $230,000 each to the Republicans and Democrats. This will help cement their control of the political process. It was a win-win deal: Dimon got something. And the feds got something.
That must be why the Wall Street Journal labeled it a “rare bipartisan success.” We understand the bipartisan success part: Both Washington and Wall Street benefited. It’s the “rare” part we don’t understand. By Bill Bonner, Chairman, Bonner & Partners.
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