Stressing Me Out...

Charles Payne
Posted: Mar 22, 2014 12:01 AM
Stressing Me Out...

As a boxing fan, I thought Shannon Briggs was the second coming of Mike Tyson when I watched him fight in person at Madison Square Garden. He bolted off his stool to plummet his opponent within a minute of the opening round. This was a bad man! Alas, it was more about competition.

His opponent that night was a tomato can, and Briggs was 'not 'unstoppable, like a human-robot. I learned this a few fights later when he fought another would-be tomato can, and took a shot to the chops that busted his lip. Seeing his own blood for the first time sent Briggs, the 25 and 0 fighter (25 knockouts) reeling.

In fact, the shock of blood seemed more powerful than the blow that actually landed. Briggs was counted out in the third round of that fight. Although he would continue to fight, and continue to win championship belts later in his career, he was never the same fighter; and he never recaptured that facade of invincibility. To his credit, he took a savage beating in his last pro fight against Vitali Klitschko, which lasted 12 rounds, but he spent the next four weeks in intensive care.

Sturm & Drang

German for "Storm and Stress," was a movement from 1760 to 1780, among poets, philosophers, and composers that focused on the angst in life.

  • Storm: reflected nature's sublime power in inspiring the artist
  • Stress: the role of the emotions or the will in expressing the turmoil present in nature

I thought about Shannon Briggs and the Sturm & Drang movement, when I saw the Federal Reserve's assessment of too-big-to-fail banks. It might seem odd that a pro fighter that did not live up to the hype, and a short-term art movement which influenced timeless poems, as well as works from Mozart, have something in common. On the one hand, there is the pugilist that was a walking wall of granite, only to turn into clay after failing his first stress test. On the other hand, music and written words sought to reflect the agony of stress.

...Take a Punch?

According to the Federal Reserve, the top 30 banks with $50.0 billion or more in assets, were as impressive as Shannon Briggs, as he developed a record that shouted to the world that he was an indestructible monster. Under the Dodd-Frank Act, banks were tested for a meltdown scenario that was begun last quarter, to last through 2015. However, it turned out to be nine months of hell that would see a negative GDP of 6.1% in the first quarter of next year, and the market free falling to 7,500. In addition, home prices were being swallowed by a sinkhole. Zions Bancorporation was not ready for that to happen, but Zions said it would get its act together, so its shares rallied nicely anyway.

So, $500 billion wiped out and the following banks would still be in the fight. I don't think so!

Face it...too big to fail has only become a larger problem, and the unruly meltdown presented in the Fed's severely adverse scenario would see blood in the Street. More importantly, it would mean another massive bailout. That's right, the personification of a perfect 'Sturm and Drang' situation that would make that old enlighten crowd in Germany take great pleasure. There is nothing quite like the perfect storm and the aura of human angst.

The stress test is a joke and the results are an insult.

In the end, Main Street would suffer, and money that could be used differently, or saved could gush into the vaults of these banks and other major companies. Once the dust settles, CEOs and other highly placed executives would be back to record bonuses and Main Street would still struggle, although under pro-success and free market conditions; not as long as the current malaise. Over the long run, the nation has an amazing economy that bounces back, which is why I say stop with this nonsense, and allow failed banks to fail, so America can suffer less and come back sooner.

Speaking of comebacks...Shannon Briggs is scheduled to come out of retirement early next year to fight for $10,000,000 in Dubai. If that happens, forget about the rally in biotech stocks and Fed money printing. However, it would be the biggest sell signal I could ever imagine. Having that much cash to squander on a guy that lost it all a long time ago, after he failed his first stress test, proves there is too much excess cash and froth. At least it would be some dumb oil sheik forking over the money for that charade, and if there were a severely adverse meltdown, you and I would pay to bailout the banks.