Toward Ecosophy

It's been a while since I paid close attention to the market for financial gimmickry -- yeah, I know, I've been slacking, spending too much time watching pandemics and wars -- so I missed the opening rounds of a familiar story.  People outside the realm of high finance ("high," in this case, meaning something not too far from "stoned out of their gourds") doubtless haven't heard of collateralized loan obligations, aka CLOs, but there's a fairly good chance that all of us will hear a great deal about them sometime in the next couple of years or so. 

Do you remember mortgage-backed securities (MBS), the investment vehicles that blew up so fetchingly in the 2008-2009 real estate crash?  If you missed that, or were too busy running for cover to take notes on the massive lumps of financial junk that were crashing into the street all around you, a MBS was a collection of residential mortgages packaged up as a "security" and traded on financial markets. The ratings agencies obligingly slapped investment-grade labels on them, and they played a very large role in inflating the speculative bubble that peaked in 2008...and then crashing it, and the world economy, in the unraveling that followed. 

CLOs are exactly the same, except that they're manufactured from commercial debt. The merry pranksters manufacturing them insist just as enthusiastically that they're rock-solid, the ratings agencies obligingly slap absurdly high ratings on them...and as far as I can tell they're at least as far into toxic-waste territory as the average housing-bubble MBS is. Oh, and the market in CLOs, which was next to nothing a decade ago, has ballooned since then to somewhere well north of US$1 trillion, with almost half of that added in the last two years. 

So we've got two of the Biblical horsemen, war and pestilence, already trotting along merrily together, and a third, famine, saddling up as we speak -- 30% of the world's wheat crop comes from Russia and Ukraine, you know, and so the price of wheat (and a number of other agricultural commodities) has doubled in the last few weeks and promises to go higher. I don't know where economic crisis fits into the Biblical scheme, but here he comes, ambling up on his pony to join the fun; no doubt the hooves are going "CLOp, CLOp, CLOp."  ;-)

Back when I was living in Ashland, Oregon, and the housing market was going stark staring nuts, I studied t'ai chi with a very capable teacher named Gene Burnett. Gene is also a singer-songwriter, and his most famous song seems highly appropriate just now. Please note that it's breathtakingly NSFW, and not just because the title is "Jump You F***ers"...