How we got here.

Don’t be weak. Don’t be rapacious.

The United States of Bed Bath & Beyond by friend of the show Ben Hunt

The story of Bed Bath & Beyond is the story of grown men, rapacious men, whose nature is to bust-out the weak men as cruelly and certainly as possible, over and over again.

The story of Bed Bath & Beyond is our story, the story of the United States here in the fin de siecle of The Long Now, where our entire country has been busted out and stripped for parts by grown men, rapacious men, different from Tony Soprano only in that they plunder legally within a system of courts and laws and regulatory agencies.

The story of Bed Bath & Beyond is a story of loss and sadness.

The story of Bed Bath & Beyond is the story of what happens when Story ends, when the reality of the bust-out — crappy stores and crappy management and overwhelming debt — finally swamps the narratives of Stock Buybacks!^TM and Turnaround!^TM and Short Squeeze!^TM.

And maybe a story of hope.

Hope how?

Hope that the reality of the American bust-out — crappy institutions and crappy leaders and overwhelming debt — will begin to swamp the narratives of Yay, Stock Market! and Yay, College! and Boo, MAGA! and Boo, Wokeism!.

Hope that the assignment of losses here at the end of an age will force us to call things by their proper names, to identify weakness as weakness and rapaciousness as rapaciousness and narrative as narrative. Hope that we will have the courage to reject them all. Hope that we will choose to be more clear-eyed and more full-hearted as we move forward with resolve to Make/Protect/Teach in the world beyond bust-out.

So here is the story of the weak and the rapacious and the narrative-driven. Here is the story of Bed Bath & Beyond. Not for shame or schadenfreude, but for hope.

• Ben Hunt On The Big ‘Bust Out’ Podcast with Jesse Felder.

At the end Ben is asked what we can do ourselves. What’s the solution?

‘Don’t be weak. Don’t be rapacious.’

Great metaphor, Ben.

I tend to use the words avarice or avaricious instead.

Ben Hunt’s twitter handle.

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I written a lot about stock buybacks (and Ben Hunt has too), and won’t today. I even got blocked by Cliff Asness over the topic, among other things. I do agree that stock buybacks may make sense if the shares are undervalued, however you figure that.

Regardless, there’s a huge difference between Munger and Buffett repurchasing Berkshire Hathaway shares, and, say, Deutsche Bank, a criminal organization, buying their shares.

Over the 1995-2016 period, shareholders earned a net €17bn from owning Deutsche, once dividends, share buybacks and increased stock market value are offset by capital increases. That is dwarfed by the €71bn paid in bonuses over the same time period.

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Matt Stoller with Grant Williams:

So in 2010, I went to Sweden on a vacation, and one of the cool things about being a congressional staffer is you can talk… If you email someone there’s a pretty good chance they’re going to be like, “Oh, yeah. Sure, I’ll talk to you.” And the guy I worked for was on the financial services committee. So I emailed the guy in Sweden who had handled their banking crisis in the early 1990s. Which was very similar to the US banking crisis…And I met with him and I was just like, “What were you thinking?” Because in Sweden, they nationalized their banks and then re-privatized. They basically broke up their banks essentially. And he said to me, “Well, this is what we did. We thought it was kind of crazy what you were doing in 2008.”

And I was like, “Where’d you get your idea of what you did?” He said, “Oh, well, we just copied what the US did in the 1930s.” So there had been this debate in 2010, this philosophical debate, not grand philosophy, but banking law. Where Obama had to choose between the Swedish solution, which was take the banks, break them up, recapitalize them, wipe out the bond holders, whatever it was. Do the hard choices of reorienting our power structure. Or the soft option, which was just to bail out the banks and allow for the existing people who were running things to keep running them.

…at a certain point he was asked, “Why didn’t you do the Swedish solution?” And he said, “Well, America has a lot of banks. Sweden doesn’t have very many banks, so it’s not as hard to do it in Sweden, but it’s hard to do here because we just got a ton of banks. And besides Sweden is Sweden, this is America. And we have different traditions in this country.” And it was incredible because he did not know that Sweden got their concept from the US.

I immediately thought of this incredibly prescient article from Pam Martens, published six months before Obama was elected:

The Wall Street plan for the Obama-bubble presidency is that of the cleanup crew for the housing bubble: sweep all the corruption and losses, would-be indictments, perp walks and prosecutions under the rug and get on with an unprecedented taxpayer bailout of Wall Street. (The corporate law firms have piled on to funding the plan because most were up to their eyeballs in writing prospectuses or providing legal opinions for what has turned out to be bogus AAA securities. Lawsuits naming the Wall Street firms will, no doubt, shortly begin adding the law firms that rendered the legal guidance to issue the securities.) Who better to sell this agenda to the millions of duped mortgage holders and foreclosed homeowners in minority communities across America than our first, beloved, black president of hope and change?

Revisiting this fact in 2017, in an article still worth reading, Martens concluded:

As we now know through the hard evidence of emails leaked by WikiLeaks, Obama was the sock puppet of Wall Street. (See related articles below.) Trump’s Goldman Sachs administration is simply the cleanup crew – and we don’t mean that in a good way.

Follow

Matt Stoller

on Substack.

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I wrote a thread in 2017 that goes over what Pam Martens mentions here. It’s archived, unedited and not pretty, but check it out. (Be patient, archive.org can be slow and glitchy, but right now it’s all I’ve got.)

This is one of the threads I’m proudest of, and I’ve been meaning to post it on Substack ever since a former JPMorgan VP banned me from Twitter. As I said at the time I wrote this (October 2017), this is how I thought we got to the point where Donald Trump was President of the United States.

If you’re a tribalist, there’s probably something to offend you below. Sorry.

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2018:

100%: