October 11, 2008 - Published late...

Dear Sis~

Well, at least the markets are closed for the weekend so they can't fall any further, until Monday, anyway. What a week this has been; every time you think the markets have hit bottom and couldn't possibly fall any further, they drop like a broken elevator. Putting aside the underlying causes of the current crisis, what we're seeing provides great insight into the psychology of the market and a vivid reminder of how much our modern financial structure, across the globe, depends on that ephemeral quality called confidence. When real confidence in the basic fundamentals of the markets and financial institutions evaporates, everything can grind to a halt with frightening swiftness. No matter what the financial pundits are saying, nobody knows how bad this may get nor hoe long it will last. Hell, nobody really knows how to fix it! One thing I do know is that the bad debt outstanding (all those arcane, bizarre debt structures , like credit default swaps) is much. much greater than most people know of or understand. We're talking about many, many trillions of dollars. Here's something that's not even being talked about: All those mortgage-based debts which were packaged together, diced up and sold down the line (to the next sucker), all those instruments, whose failures started this panic... well, the same thing still exists with the hundreds of billions of dollars worth of credit card debts. Banks took millions of peoples' credit card debts, packaged them together and sold them down the line, exactly as they did with mortgage-based debt. Hundreds of billions of dollars of this debt is sitting on the books of many, many banks, investment houses and insurance companies, another ticking time bomb ready to implode as suddenly as the mortgaged-based credit default swaps collapsed. I'm really not into being Chicken Little, running around saying the sky is falling, but the fact is that things can get a lot worse. The whole nature of our capitalistic system may become questioned if this crisis remains out of control. Behind all of this, essentially, was greed. That isn't just a cliche', it's really true... an outstanding degree of greed and readiness to ignore the possibility of things going south. Combined with zero oversight and toothless regulators (foxes guarding the hen house) this was predictable, or at least, foreseeable. Many supposedly very smart people chose to drink the Kool-Aid, buy into the hype and ignore the risks. In other words, human nature prevailed ...
On a more pleasant note...we, here on the row, are filling out our annual Christmas Fund Package order forms. Once a year, we get to purchase up to $100 of "good" food (good, compared to prison chow!) like meats, fish (all in sealed pouches) cheeses, condiments, cookies and candy. We spend the whole year looking forward to this event; it doesn't take much to get us excited! And with the sever budget cuts we're seeing here across all state agencies (but especially within the DOC) our food is getting nastier and the portions smaller every week. so, everyone is anticipating our little bit of Christmas cheer!
With Love,
Bill