Just can’t fight this Wall Street funk thang

FUNKY… that’s what the lady said. Funky is the word, and funky is the thing. Or maybe the thang, as Mr James Brown or Mr Sly Stone or Mr George Clinton might have put it, back when funky had a meaning that it doesn’t always have today.

The funk we’re talking about now is less to do with gettin’-up-offa-that-thang, and more to do with gettin’ out of the stock market before they bring it all crashing down again. Those incurable funksters.

It was Gillian Tett of the Financial Times, speaking from New York on BBC2’s Newsnight, who called “funk” on the whole damn thang (I’ll stop this “thang” business now, but I hope readers will understand we don’t often get the chance to git down and git funky and to do this… this… thang).

Anyway, this Gillian Tett was building up to her moment of supreme funkiness, with a broader explanation of what is going on with our old friends, “the markets” — “the fundamental problem, and the image I like to use is that you had a financial system before 2007 that was addicted to cheap private sector debt — heroin if you like. We were weaned off that by becoming addicted to morphine — essentially government help, and what we’re seeing is a huge explosion in government borrowing around the world, and that will eventually create problems”.

And then she got to the business end, as it were.

“What has actually rocked the markets in the last few days in America has been a very funky derivatives product linked to something called Vix — which is complicated, I won’t describe the details of it — but it’s a bit like the funky products that turned up in the subprime mortgage crisis a decade ago. But that’s really just a symbol of some of the excesses that have built up in the system, as people have responded to free money from Central Banks by doing some very weird things to try and seek yields and get returns. And that eventually comes back to bite everyone.”

Thank you very much for that, Gillian Tett, that is all we need to know.

The presenter asked her a few more questions, but there was no need. The takeaway was already clear — they’ve only gone and done it again, the Wall Street crowd with their funky derivatives and their seeking of “yields” and these “excesses that have built up in the system”.

The next thing that happens — it’s a kind of a routine now — is some kind of financial Armageddon at the end of which they will need to be bailed out by the general public, thus setting up the next round of casino capitalism down the line.

But then we know this. We may be in denial about it for long periods, because it is just not something we want to be thinking about, but we know this is how it works. That you can no more stop these characters from getting funky with their derivatives and from “doing some very weird things to get returns”, than you can keep a pathological gambler from his punting.

The fact that there is even such a thing as a “derivative” — funky or otherwise — after all the carnage that they caused the last time, is indicative of the absolute refusal of this section of the community to reform themselves, and the abject failure of governments and regulators in general to do the reforming for them.

We saw it in this country, we saw who had the power. For a few minutes there, about 10 years ago, the Irish government was in a position to demand certain modest readjustments on the part of the financial services community, to persuade them to alter their way of being in the world so that they might consider, say €500,000 a year to be a halfdecent wage.

The financial players didn’t actually laugh out loud at this floating of concepts such as “the common good” and “the public interest” and all that, but they made it clear that there were immutable laws of nature which placed them above such bureaucratic balderdash — laws of nature which are clearly accepted by governments and other minor players who would “put it up” to the leviathans of the money game.

If they were incorrigible at the time of their most abject disgrace, the moneymen were hardly going to be too hard on themselves for destroying a few lives with funky stuff like the tracker mortgage scam. Again, it seemed that they were just obeying the call of nature.

Indeed it could not be more obvious that in any part of the world, when some petty official — a Chancellor of the Exchequer or some such — is trying to “negotiate” with the financial wizards, he should be viewing them in exactly the same way as he would view any recidivist offender who is known to be utterly amoral, irredeemably degenerate, recognising no boundaries.

Instead he listens empathetically to their expressions of concern that the draconian measures brought in after they destroyed the world in 2008, have resulted in levels of remuneration which will never attract the right kind of “talent” — a compensation package of, say, a million a year will not even attract the untalented, let alone the brilliant ones, they insist.

So Gillian Tett says that these “products” invented by the finest minds on Wall Street are a bit like the stuff that turned up in the “subprime” racket. Again, did we imagine for a moment that these supersmart individuals wouldn’t find some other way to get “yields” that are way beyond the massive “yields” they are already getting? Did we really suppose that they wouldn’t get that urge again, to gorge themselves on other people’s money?

And then you consider that we are now in the time of Trump, who is determined that no law, no rule, no restriction of any kind should be placed on the money-makers. As the market soared, and as he took the credit for it, he was not entirely wrong — I think it was Naomi Klein who suggested the Trump brand conveys one concept above all else: that of ‘Impunity through Wealth’. And there is nothing that will fire up the animal spirits of Wall Street more than Impunity.

Impunity is what they do, Impunity is where they live, and in Trump — the great avatar of Impunity — they have found their ultimate soul brother, the undisputed Godfather of Funk. Indeed he might even regard it as a personal affront if there wasn’t some spectacular outbreak of systemic looting on his watch, one that would make 2008 look like the embezzlement of a few grand from a post office.

If you thought it was pretty funky the last time, given all the brilliant new financial “products” which have been invented in the meantime, it will be funkier still. I mean, the last time they didn’t know for sure that they would get away with it. Now that they do, it will be Funkadelic.

‘Impunity is what they do, Impunity is where they live...’