Music, Weed, Movies, and now...Housing?

Another step:
At some point, the nightmarish history of capitalist accumulation,
driven by a frenzied terror of scarcity and alienation, will dream
itself out of anxiety and sober up. But when? When? ALREADY.
The rapidly-evolving deflationary crisis, which has only begun to
terrorize the Bastards in High Places, may be evidence that a
revolution of sorts has already occurred. This goes against one of
the more obviously false pre-suppositions of political economy: that
revolutions (whatever they are) are the generally well-understood,
well-planned, products of enterprising (if often sociopathic) minds.
The truth of course is that revolutions are never understood in
advance, or even as they are occurring (highly planned and post-
modernized ones like the Romanian Revolution not excepted) They only
ever really live in the creative histories they set in motion. Given.
Could it be that with the expansion of renewable energy sources, the
collapse in real-estate property "value", the decriminalization of
mind-altering substances, the ungovernability of the global
metropolises, the collapse of the credit system, and the emerging
insolvency of the culture industry, we may see a trace of living
concepts already born beyond the proper terrain of the commodity-form?

Step Two: Accelerate Losses Through Radical Passivity

As markets seem to recover, optimists will engage in  increasingly bold displays of ignorance.  The San Francisco Chronicle, for instance, seems to think that the median income of the Bay Area is over six hundred thousand dollars per year:

"The proposal would allow Fannie Mae and Freddie Mac to buy loans up to 125 percent of an area's median income - up to $729,750 - well above their current $417,000 limit. While the new limit would vary based upon how expensive an area is, almost all of the Bay Area would automatically merit the $729,750 cap by virtue of having medians above $600,000."

(In fact, the Bay Area county with the highest median income is Marin, hovering around the 100K mark)

At what level of inummerate vulnerability are the middle classes operating?  If, as seems likely, there are even more severe losses for banks in 2008, if the housing market continues a steady decline in valuation of up to 30% from its current level (see Merrill Lynch's most recent forcasts), why should we expect there to be any loans for Fannie Mae and Freddie Mac to buy?  

At no point is the performative logic of the economy more obvious:  if the banks are as wildly, stupidly bullish as small investors are, if indeed they can be stupid together, then they can persist in the fantasy of rising, booming absolute valuation of property.  But (and here the deconstruction of the performative is important) this performance, even at the apogee of its self-fulfillment, can never aspire to what we so comically used to call "reality."

Die Erotik der Macht

Having, paradoxically (and peritropically) predicted and diagnosed
the ungovernability of Ecoverse, as well as the unknowability of its
futurity, it is time to move on to more serious matters.
In order to carry out the revolutionary aspirations of the
Foreclosing Classes, several nominal adjustments within the Ecoverse
must be completed in short order. I will elaborate a few of these
long term goals over the next few weeks:

1) A new social physics of commonality must be expressed
aesthetically. We have possessed the theory of such an understanding
(Spinoza) for at least three centuries; and perhaps we've never lost
the understanding itself; however this theory and this understanding
must throw itself on banality and produce a film.

Happy in Post-Capitalist America

History will probably see the Bush Depression, as well as the Bush
Wars, as minor blips in the very gradual descendence of capitalism.
However, it is the much more interesting transition from market
capitalism to state capitalism which, from where we write (at a desk
outside on the corner of a bridge over that little river runs through
the outskirts of downtown Santa Fe, NM), we are likely to already be
witnessing too closely for comfort. Excluding some of the not-simply-
xenophobic-horse-shit discussions of sovereign wealth funds, and
their role in re-capitalizing the banks in the wake of the subprime
crisis, we can already see the sprouting of a very old seed of state
capitalism in Bernanke's rescue efforts. It has actually always been
there, or at least since the codification of the Federal Reserve's
legally-defined categorical imperative: "You shall achieve maximum
employment." In other words, make them work. Everything we see the
Fed doing today, in terms of printing money in the form of discount
inter-bank loans, is aimed at creating a situation in which the
American people will "be employed" "maximally". The better the
superstructure is understood, the more diabolical and anti-populist
the "maximal employment maxim" seems.
The central banks by and large have a mandate to create the kind of
liquidity in lending institutions which allow them to inflate and
control commodities (like say housing) in such a way that people will
have to work for them. This is the nature of a boom. Tempt the
masses with the dream of accumulation; allow them to believe they are
the "smart money"; just keep them working to pay down the interest.
In what is taking place now, we can already see a dawn beyond the
ascendence of state capitalism: when people see beyond the social
stigma of the debt they have so idiotically elected to hoist on
themselves, and walk away from their loans en masse. It won't happen
this time, but someday it will. And there will be very little the
state can do about it.

Anarcho-Capitalists in Elaborate Daughter-swapping Ritual

As if we needed any more proof that executive workers (the new lower-middle class of Western Europe) were close to achieving a level of self-victimization comparable to what they inflict on others, The Guardian reports:

""Tales of Student Prostitutes shock france

France's education minister has vowed to improve student financial support after a series of accounts by undergraduates working as prostitutes.

A memoir by a 19-year-old language student and a book of interviews with undergraduate sex workers has shocked France, lifting the lid on a practice which appears to be increasingly common. A new study showed a large online market for student prostitutes, describing how male clients, who are often rich, married executives, advertise online for young, undergraduate "escorts" whom they prefer to street prostitutes. These clients pay on average €400 (£300) for a two hour meeting with a student, including sex and "time to talk".""

The self-exploitation is clearly intensifying, and it is clear that these modalities are, like most violence, intra-familial:  financiers securitize their own mortgages, driving prices even farther up for their older children, while soliciting each other's university age children.  

After all, as we all know, no one is rich unless their children are poor.

Informational Frictions

The Executive Summary of "informational frictions" from the Federal reserve reads like a catalogue of skeptical chasms from Sextus Empiricus.  In fact, the term "informational frictions" seems to be a somewhat casual appropriation from the lexicon of information theory, deployed as a euphemism for the global collapse of inductive certainty along the entire chain of the mortgage lending and securitization process.  Clearly, there is no longer any effective analytic apparatus for assessing either credit-worthiness of borrowers, or the overall risks of investments in general.  (This raises the interesting skeptical question of whether there ever was.) The fact that there are no clear winners in this situation should at least prompt some of the analysts and managers, who have so much to lose by misunderstanding these things, to at least try to conceptualize where all the "lost" money has run off to.  I'm not just talking about lost value in terms of stock prices, but of lost money lent out to subprime borrowers who had purchased homes in a vastly inflated housing market.  First of all, it did not go to the folks who bought the house and took out the mortgage.  It went, by and large, to the people from whom they bought these properties.  These homeowners had, in recent years, seen the value of their property driven up to the skies by this very same process of excessive and reckless lending.  So, if you're interested in a more phenomenalogical reading of the subprime crisis (which you should be even if your interest is profit-driven), then it is important to investigate the event outside the framework of pure loss - keeping in mind that real money did change hands, and was spent, reinvested, etc.  This kind of research has the potential to generate new and more sophisticated understandings of concepts like gentrification, foreclosure, and insolvency, which could easily appear as subtle (if unconscious) proletarian mass-strategies.  Strangely, this process isn't being discussed as being part of the lineage of Kafkaesque "mystical bureaucracy".

America's Communist Landlords

There are so many amazing turns recently in the continuing saga of capitalist accumulation. Now, among many devilish twists of irony that Marx could never have foreseen, the chinese government is providing most of the capital backing to the largest securitized mortgage structure in the world. (http://www.ft.com/cms/s/0/c6eb81e0-c083-11dc-b0b7-0000779fd2ac.html) In other words, the resources of American and Western European ultra-capitalists are now accumulating to a purportedly communist government. Having lost close to half-a-trillion dollars in the subprime crisis, having had this money kicked out of them by a swiftly-defaulting proletariat, the creditor class of self-described capitalists is being forced to sell on large stakes of its future profits to self-described communists. The "Communists" are acquiring these distressed assets at a massively discounted rate. But this is exactly the process of capitalist accumulation that Marx describes so exhaustively in the first volume of Das Kapital - only it is going in exactly the opposite direction. So, were we to believe even for a second (and, in any case, we do not) that the communists in this narrative were communists, and that the capitalists were capitalists, we would truly have a revolution on our hands - one in which the entire stream of modern political economy suddenly began to flow backwards. (To end on a nice Derridean note:) Of course, this is just more testimony to the no longer and not yet conditioning of communism - and perhaps even of capitalism? Is it possible that chinese communism is the spectre of a capitalism hitherto unseen? A capitalism to come?