Anna Nicole Smith: RIP

The mainstream media is awash with stories of the untimely death of a model whose sole claim to fame was her claim to fame.

Less easily understood is why the mainstream media persists in taking up valuable news “real estate” with photos by photographers of photographers taking pictures of news conferences after her death.

Our culture is obsessed with fame, that much is true. But there is something more to the reaction of the mainstream media than simply following our obsession: a literal aversion to reporting the kind of news that would reveal the mirage behind the obsession.


Today, the New York Times business section sheds a little light on the nature of the mirage: the $26 trillion credit derivatives market. Local newspapers have studiously avoided the subject.

The credit derivatives market is an unregulated financial market that separates debt from its underlying asset. Much of the real estate boom that touched Miami has been enabled through the parallel creation of debt instruments traded between large institutional investors, banks, and insurance companies.

To call the credit derivatives market a Ponzi scheme is not farfetched. The Times article briefly mentions how hedge funds have turned into the “borrower of last resort” for credit derivatives.

Hedge funds, of course, are scarcely required to report to the SEC and represent the ultimate “illiquid” investment for gullible investors who may, at some point, need the cash.

It should comfort no one that the market in question is “twice the size of the United States economy—the fastest growing financial market there is”.

The mainstream media is lagging so far behind this story, we can scarcely see or hear it. When Warrren Buffett, America’s most famous investor—(who prudently built a fortune on buying underappreciated assets) first called credit derivatives “financial weapons of mass destruction" the media scarcely blinked.

Instead, the mainstream media is reporting verbatim from bankers that cracks in the foundation of the US economy are contained to damage in subprime mortgage markets. There is gathering evidence of severe, and much more severe, consequences that lead back to credit derivatives and the real estate industry.

Never has so little reality stood for so much appearance--in the media or elsewhere--, not even in the first decade of the 20th century when binder boys stood on Miami street corners, platted but unbuilt, trading land titles for twice in the afternoon what they sold for, in the morning.

There is no end to the questions we would like the mainstream media to address, but in the coming days we expect to learn instead everything it is possible to know—true or not—about Anna Nicole Smith.