Zombies R US(ofA)

As Stephen Colbert used to ask:

George W. Bush - Great President or Greatest President?

On the Tonight Show with Jay Leno, Obama tried to inform America why AIG was so pivotal in the Rape of Lady Liberty. He said AIG was just a normal insurance company until, in the search for more and more profits, grafted an investment bank on its back. And that investment bank operation got over involved in derivatives and other risky assets, primarily associated with the subprime mortgage market.

Yesterday I watched a video clip of Barney Frank, where he suggested that we file a shareholder lawsuit against AIG for fraud, as we as a country are the biggest shareholder in AIG.

Then it hit me: we as a country and economy are just like those Zombie Banks that are technically, non-technically, hypothetically, and every other -ally so beyond life support that they are undead. Not even Mary Shelley or all the King's men can bring them back to love and life.

At first I thought such a lawshit against AIG would serve some cathartic need, it is pointless. There is nothing to sue for. Our investments in these banks and financial institutions, call it a bailout or whatever, is dead. There may be marginal money there for operations, but a lawsuit by the United States would be frivolous because there are no assets in priority. What I mean is this: AIG, Bank of America, Citibank, Goldman Sachs, etc etc etc became involved in fraudulent activity years ago. And although Obama said what they did wasn't against the law, he did suggest that these financial institutions did not act in their shareholders' best interest. And they lost trillions.

If you know anything about shareholder lawsuits, a plaintiff attorney only has to find one person (and preferably a few) to file a lawsuit against a corporation along with a request seeking class certification. A class action lawsuit against AIG, BofA, Citibank, Wells Fargo, or General Electric's finance arm would bring any of these companies down. And hard. Now I can think of at least a hundred million people who could serve as lead plaintiff. And I am sure there is a Weil Gottshal, or a Lieff Cabraser Heimann & Bernstein, or a Bernstein Liebhard & Lifshitz willing to take such a case.

And what is the chance that such a lawsuit would be successful? Would it be that hard to show fraud? The only thing the companies have going for them is that such a massive discovery process would likely bankrupt a plaintiff firm, even one well capitalized. And any such suit would take priority over a suit by the Attorney General's office. So, all the 'good' money we have poured into these bad financial service firms will become attachable assets in such litigation. I mean if Hank Paulson and Tim Geithner couldn't remember to put strings on the money, do you think they protected the money against shareholder lawsuits? (And if they did, what did they know and when did they know it?)

So it appears that we may be at risk of having to bail these companies out again again again. Is this why Obama and the Fed are setting up a shadow banking system? Whether it is a class action lawsuit or a smoking gun or a butterfly flapping its wings in China, we are at big risk.

The only way out is to collectively agree that the zombies are not only bad, but that they can't be rehabilitated without the baptism of bankruptcy for the remission of sins (and obligations). And a truth commission. It is well known that if you are attacked by a zombie, you will become one. And as we are under attack, we must be very careful.

And there is something else too: we need to be able to say what it is that we want and then build it. We are so afraid to sit down and imagine what type of community, nation, or world we want to inhabit. Very few people have been having that discussion, although that seems to be changing. As Terrence McKenna says: "if you can't describe a reality, you can't inhabit it."





As we are on the topic of zombies, what are corporations anyway? Fictitious individuals granted to possiblity of immortality? WTF.

Slow Down, You Go To Fast

If we are to rediscover meta-economics, then it will be found through a reaffermation of the primacy of nonviolence and beauty.

Woody Tasch
Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered

How is this for "radical":

Dante Hesse runs a small organic dairy farm in Ghent, N.Y. Hesse lets his herd of 60 or so cows graze on open pasture. He avoids giving them growth hormones and antibiotics. Hesse says his cows might live a decade or more, and they stay productive longer than the average for more industrial farming.

A couple of days each week, Hesse makes the trip from his Milk Thistle farm to farmers markets in New York City. Even before he finishes setting up his stand, customers start lining up for his milk, at $5 a quart. Hesse says he could sell even more milk — plus butter and cheese — if he could just build a processing plant right in his barn.

For that, he needs to raise about $700,000 — a sum of money that has been hard to come by in the current recession and credit crisis. Hesse has a particularly hard time borrowing money because he has nothing to back up the loan. He rents his barn and his land. He's got no co-signers. Last fall, unable to get a loan through ordinary means, he turned to his customers and asked them for help.

"We feel pretty strongly at this point that there are a lot of people out there who are interested in helping, and the way the economy is now, one argument might be that it's a bad time to be doing something like this," Hesse says. "But I think the inverse is true, that it's actually a good time because people are scared of the stock market, and they know that food is a vital part of survival. And local food is going to become very important in the very near future."

Hesse is offering 6 percent interest for an unsecured loan of $1,000. His business plan taps into a pair of burgeoning movements — the first characterized by an interest in organic, locally grown food; the second by an environmental approach to economics.

That approach is championed by Woody Tasch, a venture capitalist and author of the new book Inquiries Into the Nature of Slow Money. Tasch argues that money is flying around the globe too fast. He rows hard against mainstream economics, which says growth is good and the marketplace knows best. "I've just had it with all of this so-called 'making-a-killing expertise,' which is actually killing the planet," he says. "I think one of the antidotes is daring to move to the other side of our brain, and kind of put down all that economic and fiduciary nonsense and just act like regular people."

Tasch and his Slow Money Alliance take their name and inspiration from the Slow Food movement, which started 20 ago in Italy. Tasch isn't arguing against all growth. Rather, he's saying that some as yet undefined portion of capital should be steered toward smaller, local farms and businesses that are friendly to the environment. His group aims to raise as much as $100 million this year, then let regional funds start investing in businesses they like.

The idea of investing in a farmer like Hesse, who's got no collateral to back up a loan, might seem overly risky to some. But one customer at the market stops to ask Hesse about the deal.

Josh Goldstein of Brooklyn says he and his wife are interested in lending money to Hesse. They've lost faith in the stock market, and are ready to put their faith instead in a business and product they can see — and taste.

"The milk, first of all, it's like no milk you've ever had," Goldstein says. "We've been looking to invest some money in local green companies. We just thought it looked like a good opportunity — somebody local, somebody we know, somebody we can trust."

For now, Hesse is putting the finishing touches on his plan to seek investments from his customers. He's also hoping he might get the backing of an outfit like the Slow Money Alliance. He knows it might take him a while to get where he's going. In this economy, he's almost got no choice but the slow road.

Eco Ecco Echo

The mortgage meltdown won't affect me personally. I have a good job. My job is too important to go away, after all, I am more productive than my cost. My company is honest, and the people are hard working. Luckily, not too many people seem concerned about the economy (and I work with economists).

I am also concerned about global warming and the destruction of our environment -- our ability to eat, drink, sleep and love are being destroyed in front of our very eyes. And we need to reverse our collective suicide unless or course it is too expensive. In which case we will have to pollute ourselves out of this crisis and come back later to undo all the crap once we can afford it. And it just isn't practical right now, given the economic mess we are in.

I do worry about my children's futures. One kid has low level asthma and some other condition that is on the rise. I worry that they will not be able to have the standard of living that I slave for everyday. I worry that all those sacrifices my spouse and I make for them, the sacrifices of our parents in our lives, and grandparents, and great grandparents, and etc -- all those collective sacrifices so the future generation will have something better will not be appreciated by my children and their generation. I am afraid that this generation will be ungrateful for this wonderful world that God has given and that we have honored and preserved through faithful stewardship. Yes, they will probably be blinded by the eco-collapse (eco being all things of balance), and blame us for not doing anything. I don't think they will understand how important it was for us to sell out our principles in the short-run for their long term gain. Yeah, the gains don't look so great today, but you should have seen the future 40 years ago. When I was a kid, it was really bright and shiny. Something to strive for. If we could just get our kids and society back to 1963 and show them how beautiful the future could have been versus what they actually got, they will understand and thank us for taking those steps and making all those hard decisions. Maybe it didn't work out just right, and maybe what we have to do right now could be considered going down the same path, but it is the only way out of this mess. Well, unless you want to have to go through actual pain. God, I hate being hungry and uncomfortable. And add screaming kids on top of that, just shoot me now.

Too bad this is how it has to be. Don't tell me otherwise otherwise you would be doing it.