BCE - Breaching The Levee

BCE - Breaching The Levee

The economic framework of the free world is crumbling even faster than its physical infrastructure. As an Engineer/MBA, I have had one eye on the infrastructure and the other on the economy for a lifetime (It’s been hard on the eyes). It makes me sad to see it all coming apart. Unlike Mrs. Obama, I have always been proud of my Engineering degree and my MBA.

I have been forced to recognize that at age sixty-eight I’m a dinosaur in the engineering world. We dinosaurs built the levees that held back the Mississippi River for over one hundred years. Today’s engineers stand and watch as the entire heartland of the U.S. is inundated by flood waters.

In the business community I stand in awe as all of the rules that we dinosaurs lived by are dismantled. I understood what a “Triple A” credit rating stood for. A trillion dollars after the Subprime fact, millions of seniors have discovered that Triple A now means “ripe for the picking” in our new Darwinian world.

We dinosaurs knew what the word “fraud” meant. Today, its revised legal meaning will soon protect thieves from their victims if I’m not mistaken.

In my dinosaur world, the lender ranked ahead of all classes of shareholders for a simple and obvious reason. The lender provided the money and he would not do that for the borrower without written (and unwritten) absolute assurance of security. Today, we are told it’s too bad that the BCE lenders didn’t think to demand more “words” in the bond indentures.

Hello? With no way to define credit quality (Triple A) or “fraud”, and having told lenders to “screw off” after leaving with a fortune in BCE bond financing, try to imagine the greeting that BCE, or Ford, or GM, or Toyota will receive the next time they saunter into a bank looking for more loot.

In our new secular world, there is no longer a responsible way to borrow or lend money. Bankers understandably stay sticky for decades after Supreme Court judges make bank robbery legal. Trust me, the bankers will not be back for a long time. Isn’t that “déjà vu”? Did it not happen that way in 1929? But wait … In 1929 there was a huge stock market crash followed by a decade now known as “The Depression”. Back then, after the bank was cleaned out, people planted gardens and survived. Look around you. Is there room in your condo for a vegetable garden?

Things ran pretty well when we dinosaurs were in charge. Unfortunately, there is no way to convince our modern managers of this. Today’s engineers are busy in their space station trying to determine the depth of the new puddle that has appeared in mid North America. They are totally unable to recognize that when the Mississippi levees are breached, their own continental rail links, food supply, oil and gas pipelines and more are in jeopardy. It’s a matter of life and death, and they are busy calculating the depth of the flood water from space.

Young business graduates brimming with modern Machiavellian predator/victim business principles are unable to think far enough ahead to realize that you only get to kick your banker in the teeth once, but all grand business schemes need borrowed money every day. It’s true that the world is awash in “cement shoe” money, but our brilliant young entrepreneurs will soon learn that it’s very expensive, and cement shoes are for real.

So we dinosaurs have a question: How could so many young engineers and MBA’s drop the ball on the same afternoon? The answer yields a disturbing truth… It’s something (smoke?) in the air … We have raised an entire generation that cannot recognize the PROBLEMS let alone think of ways to solve them.

Relax fellow dinosaurs. There’s nobody home. The seed corn is under water. “No doubt the world is unfolding as it should …..”