posthypercapitalism (1): rorschach effect

Germans, with characteristic bombast, are talking about an economic 9/11 self-inflicted on Wall Street by investment bankers turned suicide attackers.

The French, in typical sweeping language, are proclaiming the need to re-invent capitalism. Sarko will unveil proposals for a new world order on a summit later this year.

Chinese media, without apparent sense of irony, point to excess creation of US liquidity and debt. Which are hugely financed by Chinese government dollar holdings.

American conservatives decry massive government intervention as 'socialist' and 'un-American'. In other news, 25 billion dollars of taxpayer money has just been awarded to the US car industry for failing to anticipate fuel-efficiency demand.

Closet socialists, populists and just about everybody is tumbling over each other to condemn Wall Street greed and fat cat bonuses.

Economists, meanwhile, are furiously debating what the heck is going on. Is this a liquidity crisis, or a solvency crisis? Isn't it insane to throw a trillion dollars at a problem we don't understand? Isn't it irresponsible not to?

The problem is: everybody is right -- well, except maybe the Germans . The causes of this crisis are myriad: greed and corruption, faulty decisions, faulty technical models, excess liquidity, liquidity contraction, insolvency, intransparancy, lack of oversight and regulation, absurd levels of leverage, you name it.

If everybody is right, that probably means nobody really understands what is going on. There's a different perspective that doesn't get wrapped up in the inner workings of the financial system. More on that later.