Monday, September 29, 2008

Nothing to Fear but Irresponsible Words

This great Nation will endure as it has endured, will revive and will prosper. So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.

—FDR Inaugural Address

We shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender…

—Winston Churchill

This sucker could go down.

—George Bush

It is widely reported that in the search for somebody to blame for the subprime crisis, some of the same Wall Street firms that foisted the subprime bubble on a willing world have pointed their fingers at rumors and the people who might spread them.

We do not argue one bit that the deliberate spreading of false rumors is potentially dangerous to real companies in a tight credit environment.

It most certainly is.

Yet we wonder how any spoken words could possibly have been more dangerous to the financial system than our own president’s comments to members of Congress, as reported in the weekend Wall Street Journal’s excellent inside view of the White House bailout negotiations:

Mr. Bush allowed everyone to vent their frustrations. Finally, he pointed out that both sides still agreed on the need to get the bill done. He added that "if we don't loosen up some money into the system, this sucker could go down," a repeat of the warning in his prime-time speech on Wednesday night that a financial panic is a real risk.

The President’s unfortunate choice of words—"this sucker could go down"—carry the same deer-in-headlights quality as his televised speech to the American people last week, in which he used the word “panic,” as we recall. At a minimum, it makes you nervous; at a maximum, it makes you want to throw up first and sell everything second.

What happened to the heroic, forward-looking rhetoric great leaders are supposed to provide in times of crisis?

FDR gave us “We have nothing to fear but fear itself.”

Churchill gave us “We shall fight on the beaches.”

George Bush cruises in with “This sucker could go down.”

We wonder: has a more irresponsible sentence been uttered, by anyone, during this entire crisis?

Jeff Matthews
I Am Not Making This Up

© 2008 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.


Anonymous said...

The answer is almost certainly yes. We have something more than fear to fear, namely creeping socialism. If you accept the premise, it shouldn't be hard to find a more irresponsible quote from Cramer, Bill Gross, or a random CNBC transcript. And lets face it, whether you want to call it a bug or a feature at this point, W's words don't carry much weight these days.

eagles242 said...

Irresponsible? Your kindness is over the top as the lack of leadership and communication is the culmination of an eight year tidal wave.

Regardless of politics, people need to believe and need their leaders to lead. For W to crave executive responsibilty and end with this debacle, well.............

where is John Galt?

Daniel said...

I expect they'll be sending messages over the radio any day now trying to find him...

Martin said...

It strikes me as incongruous to compare words uttered behind closed doors within the White House to those specifically prepared and presented to the populace.

PhillipCharles said...

Granted, I am taking much liberty here with social interpretations, but I would strongly guess that this legislation would have easily passed the House in its same form 10 years ago. I don't know the details of this package, but for the past 2 weeks all one hears or reads on the dozen or so TV news outlets is 'wall street bailout!!', '$700 billion rescue for greedy CEOs, 'taxpayer funded bailout!!!', when, at the end of the day, this is so much more complicated than any of that. Middle America is convinced by their televisions that wall-street ceos are solely to blame for everything from subprime to $4/gallon gas, when, in actuality, the blame is deserved by us all. This fuels an ill-informed outrage from everyday America, who in turn flood their elected reps, who reject the deal as agreed upon. Maybe there are or are not legitmate merits for voting this down, I don't know, but the commercial news media is a pox on the intellect of our society and it is situations like this which just exacerbate the problem tenfold.

Len said...

You are right on the money, no one has been more out of touch with this "situation" than our dear leader.

Lyon Jewett said...

where is John Galt?

9/29/2008 9:57 AM

The real question is, "who is John Galt?"

Anonymous said...

now dont be hard on bush...he was just complimenting paulson's fear mongering technique to really railroad congress into another stupid move by trying to fear monger with the public.

they want what they want, but its not the best solution...its a proven wrong solution..if they wont change tact to something logical then they are more responsible than congress.

Anonymous said...

Forget John Galt, where's Paul Volker and Henry Morgenthau Jr when we really need them?

Anonymous said...

Spot on! First we had socialism as practiced by bankers - making loans to people they should have know cannot repay, a different kind of welfare. And now, it is the government trying to bail out those who made BIG mistakes. Where is Ayn Rand's brand of capitalism - survival of the fittest, and, getting punished for the wrongs one perpetrated.

Anonymous said...

Take the first person you quoted in this post and tell everyone why he turned the economy around...(repeat with me) The New Deal. I know we paid the CEO's x number of money and taxpayers "shouldn't be paying for it." Yet, it is all a sunk cost. We are undoubtedly looking at a bleak couple years if this thing doesn't pass; so quit whining and bite the bullet.

If you want someone to blame, blame yourself and everyone else who echo the idiotic mantra "real estate never goes down." If individuals weren't buying house or real estate outside of their means, then investment firms wouldn't have bad debt in the first place.

Also, you seem misguided with Buffett's stance on the economy... . Enjoy.

Anonymous said...

Big fan of the site and information presented; however, comparing words said in a private meeting with congressional leadership is far different than the Roosevelt and Churchill comments.

Other points are well argued, even if I do not necessarily agree with them.

Steve Garfield said...

Suze Ormon on CNN:

"It is possible one day you're going to go to your ATM and nothing is going to come out"

Jeff Matthews said...

su6213 is not a regular reader of this blog.

1. We were not assigning blame to the President. We were pointing out a particularly stupid statement at a particularly bad time. We don't get involved in political side-taking. We're equal-opportunity cynics. See our "Say it Ain't So, Fighting Joe" piece on Joe Biden's anti-Wal-Mart rap two years ago.

2. As for "echoing the idiotic mantra" that real estate prices only go up, su6213 could not have been more wrong, literally. Take a look at our August 2005 call on the housing market, shortly after Time Magazine's wonderful, market-topping cover story on "Why We Love Our Homes."

3. As for our being "misguided with Buffett's stance on the economy," we made no comment on Buffett's stance on the economy in that article. However, if we had, we would have said that Buffett clearly expects things to get worse before they get better. But that's not news: he has said that for months.


PhillipCharles said...

It does become immediately obvious to regular readers of this blog, those who aren't. Your prescient and somewhat patronizing post several years ago on the 'Time' cover contributed in the past two weeks to the crystalization of all my thoughts and learnings on market bubbles and their accompanying psychology. You were never guilty, to my recollection, of reinforcing the perceived merits of flipping condos in Miami, Cleveland or any locale in between.

As for the comment above implying that the foundation for present-day CDO illiquidity and the like is the fault of Hispanics and Blacks is weak at best, not to mention low-brow and distasteful. If you had any comprehension of the depth to which these problems are entrenched and variety of catalysts that have precipitated this most recent 'incident', you would not make such a reckless argument with the copy and paste of an article 9-years old. Personally, I would prefer you have a better comprehension of the world at large before you before you taint this blog with subtle, not to mention anti-intellectual, implications.

Jeff Matthews said...

Prince Charles: The previous post was not ours. It was by a reader named "Jeff."

Our posts appear as "Jeff Matthews."

Do not think for a minute we subscribe to the views it expressed.

In fact, having read it carefully, and given the fact that the person who posted it included a corporate affiliation, we are going to take it down right now.

Thanks for bringing it to our attention.


PhillipCharles said...


Just wanted to say that I knew from the start those were the comments of a rouge reader; didn't mean to imply that was yours. After 2+ years of reading your very insightful thoughts, I know better. Thanks for the designation of royalty, though. I will take that mindset with me to the bar tonight...Go (Red) Sox!!

Anonymous said...

I liked "This Sucker could go down!" It is succinct and to the point. Of course, I'm a redneck. But isn't this preferable to Greenspans incoherent verbal wanderings over the years?