The occasional reader here will trip over the ‘key man’ concept every now and then. A ‘key man’ is one who is indespensible, whose absence will result in the demise of the company. There are firms that provide ‘key man’ insurance against just such a possibility.

In the ambit of the American economy, there are firms whose relations to the economy as a whole are systemic, that would be considered by the establishment as ‘key men’, whose demise would result in overall catastrophe.

The Treasury and the Federal Reserve have acted to sustain ‘key men’ in the US economy and will not allow these firms to fail. It could be said that the Treasury is insuring these firms, which would include ‘too big to fail’ Citigroup, Goldman- Sachs, JP Morgan- Chase, General Motors and the GSE’s.

The idea is that any further economic disruptions will require a triggering event. Lehman’s failure could be considered a trigger for the surrounding failures of Fannie Mae and Freddy Mac, AIG, and the near collapse of Morgan Stanley, Citigroup and Goldman. Massive injections of cash into the general financial system will support it. Any current systemically important companies will simply not be allowed to fail, being temporarily nationalized, placed into receivership or simply given the needed funds … in bags into the back of large trucks backed up to the loading dock of the Treasury building. Since the number of systemically important firms has shrunk, it is not hard to keep these afloat at all costs, leaving the Fed to provide emergency funding as a reserve against any surprises.

The failure of GM or Chrysler would have likely signaled an equities or bond market run. The near- bankruptcy of CIT was borderline. As long as systemically important players are kept from harm – the thinkng goes – the possibility of another general panic can be averted … long enough for the economy to ‘recover’.

Recovery is a sick joke. This economy will never recover.

Who the ‘Key Men’ are at a certain level isn’t hard to figure out. Citi and Goldman are key men, they know it and are consequently outside the law, speculating wildly with taxpayer money. Also in the charmed circle are JP Morgan- Chase, Morgan- Stanley, General Electric (presumably), Boeing, General Dynamics, Chrysler, Ford; not making the cut were Lehman, Bear- Stearns, Washington Mutual, Indy Mac, and CIT.

Various smaller banks and firms aren’t positioned properly, they are neither ‘too big to fail’ (GM) nor straddling the derivatives markets (AIG).

Here now is a list by a hard- nosed analytical accounting firm of companies that may or may not be teetering on the edge of the abyss. The list is interesting; which of these are too big to fail or most closely resemble Long Term Capital Management (or Enron)?

* Advanced Micro Devices, Inc. (An Intel monopoly?)
* Amkor Technology, Inc.
* AMR Corporation (Aircraft leasing)
* Apartment Investment and Management Co. (Another useless REIT)
* CBS Corporation (Letternan, busted?)
* Continental Airlines, Inc. (No surprise)
* Federal-Mogul Corporation (Anto parts)
* Hertz Global Holdings, Inc.
* Interpublic Group of Companies, Inc.
* Las Vegas Sands Corp. (Good riddance, get rid of the gamblers)
* Liberty Media Corporation (Capital)
* Macy’s, Inc. (ex- Federated)
* Mylan Inc.
* Oshkosh Corporation (A ‘Beltway Bandit’ defense contractor)
* Redwood Trust, Inc. (Mortgage securities)
* Rite Aid Corporation (Too many Rite Aids, maybe?)
* Sirius XM Radio Inc. (No surprise)
* Sprint Nextel Corporation
* Textron Inc. (Aircraft)
* The Goodyear Tire & Rubber Company (Like GN, an old- line American icon)

Are any of these key men, deserving of taxpayer support? Will the failure of any of these throw ripples into the quivering and wounded economy? Is the auditor credible?

I suspect the failures of Advanced Micro, Rite Aid, Sprint or Goodyear might be large enough to trigger a seizure in the markets should they fail. These would be propped up, the rest left to twist in the wind, offhand strategies being put in place to allow them to ‘wash out’ provided they do so quietly.

I recently had a conversation with a friend of mine, he is in the construction and building business. He asked how things, I said, “Very busy, I’m pretty much caught up.”

“Are you going to start looking for houses to buy?”

“No, there aren’t any speculation opportunities left. Over. Done. Finished. The next leg will take everything down about 80%. Nobody has any cash. I have a few clients who still have money. I have a good rep. I keep things clean, I’m cultured and I have a sense of humor. It adds up.”

The Feds can keep things propped up for awhile. They can print money, I can’t. I can hang a door, they can’t. In the end, skill matters. Reality will assert itself and the charade will end. I realize that the depression will likely flow around me because I can hang doors, can weld, fix automatic transmissions, am a gunsmith, can draw and paint, can play musical instruments, am a master stone and brick mason and a Pulitzer Prize winning photographer. I have skills, in other words. The government has bullshit. In the world that is unfolding, the bullshit approach will be devastated. ‘Fake’ has been ruling for a long time, it is time for ‘real’.