The Way the Cookie Crumbles

Mike Shedlock's piece on the Madoff madness underlines the fundamental reason why faith in the "powers that be" is crumbling like a dry cookie.  

It's a house of lies.

Let's consider a few items, shall we?

The CIA never imagined that terrorists would fly jetliners into buildings.

Alan Greenspan never saw the looming credit crisis in 2007, even though a newbie mortgage broker saw it coming in 2005, the minute he joined the industry, and blogged about it.

"If BS were poetry we would all be millionaires. That’s what my aunt would say."

No one could see Enron coming.

And no one on Wall Street could see the Madoff debacle coming...except the "smart money".

Barron's wrote about the mystery of Madoff's returns in 2001.  Sophisticated investors reverse engineered the strategy and said the returns just didn't add up.

But the insiders kept investing with him.  Why?    

Because, as Shedlock points out, they got the lie wrong.  They thought insider trading, made possible by Madoff's huge market making business, was facilitating the fraud, not a simple Ponzi scheme.  Had it been insider trading that would have been just fine with them because the money would have been there and they could cash in on the lie too. 

And so it goes.

But truly, we owe these liars a debt of gratitude for finally imploding the old and broken system so we can replace it with something new.  It's been a long time coming.

I leave you with lyrics to a collaborative poem, "That's the Way", by Tom Waits and William Burroughs:

That's the way the stomach rumbles
That's the way the bee bumbles
That's the way the needle pricks
That's the way the glue sticks
That's the way the potato mashes
That's the way the pan flashes
That's the way the market crashes
That's the way the whip lashes
That's the way the teeth knashes
That's the way the gravy stains
That's the way the moon wanes