A Flea In The Frog’s Ear

by James Howard Kunstler, May 20, 2011

Imagine the fright mask that the Sofitel Hotel maid's face turned into when a black swan in the form of an international banking poobah waddled out of the suite's bathroom with wings rampant. Black swans appear now in the unlikeliest places. I bet you a million Euros that Dominique Strauss-Kahn's lawyer will say that his client was driven mad by relentless, revolving, unresolvable thoughts of Greece, Portugal, Ireland, and Spain, and that he mistook the hotel maid for Greek finance minister George Papaconstantinou. Wasn't it poor Karl Marx, driven mad first by capital and then by boils, who said, “History repeats itself, first as tragedy, then as farce.”

Conveniently, the bedroom farce is something at which the French excel. So much dignity, so little impulse control. Not to go overboard with quotations right off top, but cuddly ole T.S. Eliot famously informed us that “...this is the way the world ends, not with a bang but with a whimper.” I suspect the whimper was emitted by DSK in his Harlem jail cell when he discovered that the standard Sunday morning breakfast issued by the New York City Department of Corrections is a baloney sandwich. Quelle horreur! A French convict serving 30 years for tunneling into a Toulon bank gets a brioche, at least!

The question all this raises is: can you think of any other high-up officials, say in American finance or banking, who have tried to jam their generative member someplace it was not exactly invited? I can think of a few, starting with, oh, Hank Paulson. He stuck it to a couple hundred million US taxpayers and is now scott-free in the marshes of Maryland pursuing his beloved wild birds with the Swarovski EL 8x32 binoculars ($1,879.00, retail w/discount) and the excellent Sibley field guide. Only a week or so ago Senator Carl Levin's Permanent Subcommittee on Investigations sent a bill of particulars to the US Department of Justice outlining the spectacular misdeeds of Goldman Sachs executives Lloyd Blankfein and Daniel Sparks, et. al, alleged to have performed a kind anal rape on customers who did not have that kind of “yield” in mind when they came through the door at 200 West Street. Sources tell me that Attorney General Eric Holder has been using the report as a cocktail coaster.

One poor slob, Raj Rajaratnam of the Galleon Group hedge fund was convicted in a federal court last week for plain old insider trading, something a child of seven could understand. With a little luck, Raj will join Bernie Madoff's round-robin ping-pong caucus at the federal penitentiary in Butner, NC, and the days will seem to fly by. Apparently the scams that went down at Goldman Sachs and lots of other so-called banks were too complex for rafts of regulators and federal attorneys to figure out. But you never know. If DSK was too dim to hire a nice discreet $1500-an-hour hooker prior to his unspeakably tedious business-class flight back to Paris, then maybe Lloyd Blankfein will fly out of a broom closet in Jackson Hole this summer dressed like Norman Bates's mother and commence to paddle Ben Bernanke with a 10-inch chef's knife. One can only hope.

You can't blame regular folks for not knowing what the heck to pay attention to these days. Most of the US public is not preoccupied with the doings of the Greek finance ministry, the IMF, foreign bond spreads, CDS ratios, and the spooky action in the commodities pits. Especially not with Big Muddy rising and all those oil refineries waiting downstream like so many cypress stumps, not to mention two nuke plants at River Bend and Waterford, Louisiana. Wouldn't that make some hot gumbo?

While I feel for the people fleeing their homes down there, I have a feeling that this week's action will be set in the more abstruse precincts around European finance. With DSK on ice in Harlem, who will coordinate the beating out of brushfires that could burn down the European banking system? Remember, it's not about the countries. They'll still be there. The goats will still be grazing in wild thyme on the Greek hillsides no matter what happens in some Frankfurt boardroom. The layabouts will still be at their tables in the Lisbon café. But the Société Générale and Commerzbank AG could go up in a vapor faster than you can say Dominique Strauss-Kahn. The great rattling fear that lives within European business minds is that the whole bloody system is flat broke and any interruption to the daisy-chain of revolving obligations will reveal the awful naked truth — perhaps like seeing DSK fly out of the hotel bathroom with his florid organ aloft and a wicked gleam in his eyes.

Anyway you cut it, it can't be a good week for the Euro. But with all currencies spiraling towards worthlessness, and even gold and silver hemorrhaging value, what is the world of money coming to? Maybe the stuff is obsolete. If you wait three weeks, you'll be able to walk into any Wal-Mart and just pick up the stuff you want for free. Until it's all gone.

Kunstler’s books are available everywhere.

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