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This is a riot (well, ok, I might be a week – or a month early on that):

Dec. 1 (Bloomberg) — “I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.

Let me give those fine bankers from Goldman Sachs (and the other big banking and trading houses) a few pieces of advice.  And yeah, it’s unsolicited and free, so you figure out whether it has value.

1. A handgun is a close-quarters defensive weapon.  The FBI says that of shootings involving a handgun, most happen at something like 7 feet (yes, feet) of range or less.  Oh, and you’d be surprised at how many people miss at that same seven feet.  No, guns in real life don’t work like in the movies where each bullet has a GPS in it and directs itself to its target, and when shot people don’t go flying backward through windows.  Guns simply make holes in things, wherever they are pointed when they go “bang” is where the bullet will travel, and all the energy that goes into the target also goes into your body (Newton’s laws of motion and all.)

2. There are, by some estimates, more firearms in America than there are people.  Americans bought something like 20 billion rounds of ammunition this year alone.  Indeed, there are shortages of many sorts of ammunition and have been all year.  While some of that lead undoubtedly was expended at the practice range, an awful lot of it is being stockpiled.  Everyone who is stockpiling it in various amounts is doing so for different reasons, and most would self-declare it as protection against “zombies.”  Definitions of “zombie” differ.

3. There are a lot of hunting rifles in America.  Most hunters can easily hit a deer-sized target at well beyond 100 yards with said rifle.  I’m willing to bet that Mr. Investment Banker can’t hit the broadside of a barn at 100yds with his brand new pistol that he’s probably never fired, and probably never will.

4. Don’t bother with soft body armor.  It’s useless against rifles.  It is effective against pistols, which is why cops wear it (see that FBI stat about most handgun battles happening within seven feet.)  But again, a hunter can easily hit a deer-sized target at well beyond 100 yards, common hunting rifles are legal almost literally everywhere, even in places like NYC, and a person armed with a handgun doesn’t have a prayer in hell defending against a person with a rifle 100 or more yards away that has drawn a bead on them.

Finally, if you’re a “big banker” and concerned about your safety you might want to consider that in the 1800s there were lots of guns too, and yet they were both unnecessary and inadequate.  Bankers during the panic of 1873 were simply hauled out of their offices bodily and hung from the lamp posts. We don’t have lamp posts any more in Manhattan, so you have an advantage there, and I’ve not noted a run on boiled rope. 

Yet.

A better strategy for your self-protection is to turn state’s evidence and rat out someone else.  Like your boss, for instance.

Get on the side of the people and help them.  You folks in those tony executive suites (and suits) know full well that this entire bubblelicious line of BS you ran on middle-class America for more than two decades was an out-and-out fraud.  It is impossible to argue otherwise – after all, it really is just fifth grade math on the nature of exponential functions, and unlike most of America it has to be presumed that if you got a Harvard MBA you passed.  Therefore it can also be assumed that claims of ignorance will not serve you.

Let’s face it – the economy isn’t going to recover.  All the stories I hear (and now Bloomberg is willing to print, which is surprising) in the anecdotal department are that you folks have your Gulfstreams fueled up and your bug-out bags packed and sitting by the door. 

Most of you have figured out the math – there’s simply too much debt that you created and sold off into the market, and you’ve all patted yourselves on the back as you walked out of Treasury smug in the “knowledge” that you’d be bailed out.  Remember this picture?

Yeah, it was all good, right?  Uh, well it was – for you.  But for the rest of America, it sucked.  You took the “CARD” act (the Credit Card reform act) and used the delay in its implementation to ram down Americans throats 29.9% interest rates and huge reductions in credit lines – even for those who had never been late.  The Fed (one of you folks – banksters all) could have told you to cut it out and in fact demanded that you do so, but of course didn’t.

The supposed “zero interest rates” are great for your bonuses – record bonuses, right?  But nobody in America is getting the benefit except you.  We the people are all paying more to borrow – when we can borrow at all.  Bank Credit is contracting at a record rate.  The stock market is on a tear, gold is on a tear, oil has more than doubled since March.

But if you go to Harlem in NY City you don’t see “economic recovery.”  Nor do you if you step outside of the enclaves in Washington DC where everyone sucks on the government tit.  No, what you see is both the NY and California State Governments on the verge of insolvency, property and other taxes heading to the moon to try to keep the states from having to fire police officers for lack of funds, and the crumbling of our infrastructure - along with the hiss of an overpressurized “social safety net.”

The vampire squid sucked too much blood (debt service requirements) and now the host is dying from volumetric shock, all the while screaming not for whole blood (all gone!) but anything – even an injection of saline simply to make up the volume.

Now please don’t get me wrong – I happen to think that you should not lend more.  After all, we’re here because we got drunk on credit, and you can’t drink yourself sober, despite what CNBS keeps screaming about and calling for (including “The Donald” this morning, who’s one of those folks who I suspect is going to wind up with all of his so-called “wizard deals” in the pine box of Chapter 7.)

No, we as a society need to go through the DTs and detox.  Some of us will go bankrupt.  That’s ok.  Indeed, if you as a citizen were imprudent – if you lied about your income to get a mortgage, if you played the HELOC game to pay off a credit card you ran to the sky (and then did it again – and again!), if you put yourself into a debt hole from which you cannot reasonably climb out, you should declare bankruptcy and get it over with.  Discharge that which you can, take the hit to your credit and reputation, and learn from the experience. 

Frugality isn’t a sin, it’s a virtue.  It is, indeed, the first step of true capital formation – which is how, ultimately, we create jobs - and true prosperity.

In this vein you need to come out and tell the truth – you lent too much and you’re NOT going to do it any more – no matter how loud people scream.  We need reality in this country, not more fantasy.

But you folks who stole all this money? 

You need to give it back. 

Yeah, we know you can’t give it all back since you blew some of it on Netjets to various exotic vacation destinations and high-priced hookers.  We understand that.

What America doesn’t understand and is increasingly unwilling to tolerate is the smug grin you folks have on Wall Street, having not only run Americans into bankruptcy but when your imprudent lending threatened to bankrupt you instead of sucking it up you extorted Congress to the tune of more than $12 trillion in direct support and guarantees. 

That is you forced the bankrupt consumer to go broke twice and cover your imprudent acts, as all that money to cover up your insolvency is now being forcibly extracted from Main Street by the government through taxes!

Here’s the problem, in a nutshell: If we don’t get the debt out of the system – really get it out, not just shuffle it around and shift who’s balance sheet it sits on - we can’t restart true economic growth. 

Without true economic growth we cannot regain the lost jobs, and people cannot regain their ability to earn an honest living and support themselves and their families.

You and I both know that The Government cannot continue to run $1.5 trillion deficits for very long.  Indeed, it might be able to do it for even one more year.  Ultimately Uncle Sam’s credit card will come back declined just like the subprime homeowner, and when it does the thin veneer that has papered over the bankruptcy you have served up on the American people and her government will be ripped away like a bandage that has adhered to a scab.

That’s when the riots start and both you and I know that too.  It’s why you’re buying those guns.

But the guns won’t save you if ugly times come.

Only preventing the riots will save you, and preventing the riots means we must stop bankrupting the country.

That in turn means we must stop ladling on more and more debt – HERE AND NOW!

Getting that bad debt out means that both borrowers (who are already going bankrupt) and lenders (who are thus far being protected) need to go bust. 

That’s reality. 

This is beyond politics, wishes, dreams or desires - it is mathematics.

Justice, on the other hand, demands that the frauds and abuses not stand.  No, ripping off Jefferson County Alabama is not acceptable, and paying a fine is not enough.  People need to go to prison.  Ditto for the other cities and states where these scams were run – and that’s a huge number.

I understand your fear, Wall Street.  If I robbed Main Street America of trillions of dollars I’d be afraid too.

Main Street is angry, and with good cause – and the “moguls” who claim that happy days will return if we can all start charging up our credit cards and HELOCing our houses again are not only wrong they’re poking sticks into a hornets nest.  That’s right out of “Dumb and Dumber.”

Arming yourselves won’t solve the problem you created, and it also won’t protect you should the mood in America turn truly ugly.

Do the right thing Wall Street.

Not only will it be good for your soul, it will be good for Main Street.