heartattack

If you are a consumer of any form of media – TV, radio, newsprint, internet, you’ll know that economically the world is in deep shit, thanks primarily to the fact that the US of A has a new bowling arcade where investment banks are being used as bowling pins.

Here is a quick recap of what has happened over the last couple of months:

• Bear Sterns, one of the largest global invest banks had to sell itself at $2 – less than the price of a Big Mac
• Lehman Brothers, a 158 year old financial institution beat Michael Jackson to bankruptcy
• Merill Lynch, another premiere global investment bank, had to sell itself to Bank of America to avoid the same fate as Lehman
• Fannie Mae and Freddie Mac, 2 big financial institutions, brought neo-Communism to America when they were bought by the Federal Government to avoid a trip to the gutter
• AIG, the 18th largest company in the world and one the world’s larget insurance companies had to sell itself to the Federal Government to avoid claiming it’s own life insurance

Wow, don’t we have a story to tell our children/grandchildren..!!

The news media has

• spent more hours than John McCain has spent breathing
• used more ink than the amount of alcohol you need to drink in order to believe that the Mac is a better operating system
• dedicated more bandwidth than facebook has to dedicate to empower lifeless morons to frigging ‘poke’ one another

trying to analyze economically why this happened. But what many have missed that this is not a totally economic screwup. There is a cultural problem here which has manifested itself to the tragedy that we are witnessing.
America is a country that lives on credit. It is easier to get credit in the country than to find Paris Hilton in a tabloid. The greed of the financial instution forces them to give credit easily, and the easily available credit makes people spend more than what they earn. To complete the vicious cycle, overspending, spoilt individuals need more credit which makes the financial institutions salivate more than I do while watching Britney Spears music videos.

Just take these following examples:

• I went to the States in 2006. I got 2 unsolicited credit cards in my mail during my one year there. Both these credit cards boasted of liberal credit limits. Why send me the card? The bank guys think they are davinci’s descendents. There are a lot of hidden fees and penalties on these cards with interest free periods much shorter than the industry standard. They hope that my cranium is full of jelly beans instead of a brain and I would end up using the card. Like most human beings I would err at some point of time and end up accumulating a lot of fine. Yay! The bank will be rich.Here is the problem – I had less than 3 months remaining in the US when these cards were sent to me. In all probablities I may never have needed to come back to the States. I could have easily spent $1,000 on my American dream – hookers, and leave the country for good. Even worse, I could have done this TWICE. This is greed at its ugliest best. They are willing to risk $1000 for a $35 late fee they might earn from me.
• My friend and colleague Barack (not his real name, of course) lives on credit. He uses his monthly income to pay credit card bills of the previous month. It is not hard to see why he is in debt – he has his own house (not an apartment, a house – in California), 2 cars, large screen plasma TV with home theater system and he is not even working at a managerial position in his company.
• Another friend of mine, Osama (again, not his real name), owns as many as 6 credit cards. He uses one to pay for the other and the endless cycle assures that he can perpetually be in debt.
• The credit card debt in US is $2.56 trillian, with the credit card debt of an average household being over $8500 [Source: NYTimes].
• Earlier this year, a 5 year old was granted a credit card by Bank of America. Gosh! [Source: CBS].

I focus on credit cards because I believe we can all relate to them. The investment banks that we are talking about these days are guilty of the same crime. Instead of the credit card they give credit in many different forms. It is a fabric of their culture to spend more than what they earn, spend on the speculation of earning, and take risks by giving credit to people who obviously cannot pay.

While I do want to sympathize with these banks, let’s face the truth – this fate was their own calling. They deserved it. If you play with fire too much, you are bound to be smothered sooner or later. In fact, in my cruel opinion, this should have happened earlier for the benefit of one and all.

Now, I hope that the tanking of these banks is the wake up call the country needed to put its act together. I hope that the people and the financial institutions of America would now be more responsible with their money. I hope after this fall from grace, they’ll rise from the ashes. I tell you, if they can, all this shit would be totally worth it!