Don’t Jump: Financial Crisis and Bailout Explained

By Bob Wire, 10-14-08

	Caption: "You'll get nothing and LIKE IT!"

“Mortgage-backed securities.” “Leveraged credit swap.” “Underfunded subprime whozits.” For the battered middle class, those of us who actually have to look at the price tag on an item before we buy it, these terms are as foreign to us as spermicidal foam is to Bristol Palin. The disconnect between Wall Street and Main Street is huge, for sure, but what about those of us on Dolt Avenue? People who wouldn’t know a back-end funding from a head of cabbage?

You lucky devils, your ol’ buddy Bob Wire has decided to sober up long enough to ‘splain these things to you, in terms that the average American can understand. (And please, don’t be insulted when I call you an “average American,” although anyone from any other country on Earth would.) That’s right, after doing some extensive research by watching 41 episodes of “The Daily Show,” “Caddyshack,” and a couple of Marx Brothers movies, I do believe I have a handle on this thing.

First off, we’re all fucked. Completely, utterly, irrevocably fucked. The lending industry, like Rodney Dangerfield’s character Al Cervik in “Caddyshack,” blustered its way around the pro shop of the housing market for ten years, buying up all the golf accessories they wanted. Cervik was more than happy to set up Mr. Wang, representing undeserving borrowers, with a whole new set of clubs with all the trimmings, even though Mr. Wang had no savings and a rock bottom credit rating.

How could Cervik do this? Because Dr. Beeper, meaning Bill Clinton, gave Cervik a huge capital gains tax cut, which made housing the most attractive investment in the market. Cervik bet heavily on the housing market, believing that the upswing would last forever. “Golf courses and cemeteries,” he said, “are the biggest wasters of prime real estate.”

And so Cervik and the rest of the porcine lending/speculation golfers kept their snouts buried in the housing mortgage trough, sucking up dollars that continued to flow from the likes of Danny Noonan, who wanted to own a home even though he was only a caddy who couldn’t even afford to go to college. On top of that, his girlfriend was pregnant with a subprime lending bubble. She claimed that it might not be Noonan’s baby, that the father could be either Barney Frank (highly unlikely), or Chris Dodd, who had been seen skulking around Bushwood Country Club, telling everyone that all is well.

All good things have to end, however, so along comes the inevitable crash, by way of Carl, the greenskeeper. In his efforts to eliminate over-leveraged loans, in the form of a gopher, Carl manages to destroy the entire golf course with plastic explosives and by “pumping about 10,000 gallons of water down there. Is that what you want? I think it is!” Before this happens, however, Judge Smails tries to stave off total financial collapse with a proposed government bailout, disguised as a caddy tournament. Judge Smails represents Treasury Secretary Henry Paulson, who craves complete power and control, because he doesn’t want Bushwood overrun with commoners.

Where is President George Bush in all this, you ask? Well, he’s relegated to a lesser role in the bailout, much like Porterhouse, who shines Paulson’s golf shoes in the locker room, or the Oval Office.

Paulson is the real authority here, but he’s at the mercy of Congress, played by Al Cervik’s yacht, Seafood. Paulson’s $700 billion bailout, now an $850 million sailboat, is soon swamped by the much more powerful watercraft Seafood, which is now carrying a huge load of pork. The vote, in the form of an anchor, is dropped directly onto Paulson’s sailboat/plan, punching a hole clear through the hull. “Hey, you scratched my anchor!” says Cervik/Congress.

So now the caddy tournament has become the stock market, which is going completely ape shit as investors (i.e., weekend duffers) try to make money on the short term. This sends the Dow Jones on a wild roller coaster ride (to introduce yet another sporting metaphor) that causes world markets to plummet as they lose confidence in our country club. I mean, economy.

Fannie Mae and Freddie Mac have been there all along, promising to shore up the housing market in case Joe Six Pack can’t make his mortgage payments, the same way Ty Webb promises Noonan that he’ll “make it worth his while” if he replaces Cervik in the grudge match with Smails at the end of the movie. Meanwhile, Sandy McTavish, the head greenskeeper, representing presidential candidates Barack Obama and John McCain, keep running around the golf course trying to prevent Carl from eradicating the gopher. He knows he can’t stop the hellbent Vietnam vet, but he wants everyone to see him trying.

How will it all shake out? No one really knows. Not Spaulding, the spoiled brat nephew of the banking industry, not Lacey Underalls, the attractive subprime mortage loan with a great rack, hell, not even Lou the caddy master, who, like Dick Cheney, pulls all the strings and knows where all the bodies are buried. Even though Lou knows in his heart that Noonan’s a good egg, he wants to get back to his main obsession, playing the horses (invading Iran).

So I think we should probably all suck in a couple of deep breaths, and take a closer look at these prescient words uttered by Judge Smails/Henry Paulson, as he attempted to christen his doomed sloop:

“It’s easy to grin, when your ship comes in
And you’ve got the stock market beat.
But the man who’s worthwhile is the man who can smile
When his shorts are too tight in the seat.”

I’m all right, nobody worry about me.

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