I have long been a fan of Jesse’s Café Américain. Jesse is a brilliant writer and a deep thinker who uniquely transcends politics, easily seeing through lies and disinformation. He has a great feel for what really matters, and the courage to speak out about it. Jesse and I have spoken before about the economy, markets and politics, and being at a crossroads once again, it was a perfect time to catch up.
Ilene: Hi Jesse, since our last interview, I would guess that we’d both agree that nothing has been done to clean up the financial system – the banks and government interconnectedness, conflicts of interest, and out-and-out fraudulent activities. Are things better or worse, or in line, with what you were expecting over a year ago?
Jesse: I think things are progressing in line with what I had expected, with the Fed and the government trying to prop up an unsustainable status quo by monetizing debt. I am still a little shocked by the brazen manner in which the financial markets are being conducted and regulated, and the news is reported in the US. It is one thing to hold a theory that says something will happen, but it is quite another to see it actually happening, and so blatantly, almost without a word of protest.
Ilene: How do you view our financial system and the global financial system now, with no progress towards any kind of reform?
Jesse: The US is now being run by an oligarchy, with lip service being paid to the electorate in allowing the people to vote for the candidates that the parties and the powers will put forward. There will be no recovery for the middle class until they assert themselves. I know I have stated this often in my tag phrase, “The banks must be restrained…” But it is the case.
There are areas of resistance to this trend on what one might call ‘the fringes of Empire,’ those client states which have been ruled by powerful cliques with the support and the protection of the US. Although certainly not a great analogy, it does remind one of…
“FASCISM SHOULD MORE APPROPRIATELY BE CALLED CORPORATISM, AS IT IS THE MERGER OF CORPORATE AND GOVERNMENT POWER. THE TWENTIETH CENTURY WILL BE KNOWN IN HISTORY AS THE CENTURY OF FASCISM. DEMOCRACY IS BEAUTIFUL IN THEORY; IN PRACTICE IT IS A FALLACY. SOCIALISM IS A FRAUD, A COMEDY, A PHANTOM, A BLACKMAIL. FOR FASCISM THE STATE IS ABSOLUTE, INDIVIDUALS AND GROUPS ARE RELATIVE. IT BELIEVES NEITHER IN THE POSSIBILITY NOR THE UTILITY OF PEACE. FASCISM IS A RELIGION." BENITO MUSSOLINI
Note to Blythe Masters: Sorry to hear about your losses in the coal market because of a ‘rookie error’ in taking on overlarge positions, but an epic short squeeze is coming for your massive and untenable positions in silver and gold, and hell is coming with it.
And the vampire squid and its minions are going to wrap themselves around your neck, and inexorably suck the life from you, while the hedge funds lick your wounds. Your protectors in the government will not even return your calls, because they will be running for their own lives away from the disaster that you created, denying all knowledge of it, any of it.
Blythe Masters, JPMorgan Chase & Co.’s head of commodities, sought to reassure her team on an internal conference call after “extremely difficult” dismissals, defections and a first half in which some results were as much as 20 percent below expectations.
“Don’t panic,” she said in summing up the 35-minute call, a recording of which was obtained by Bloomberg News. “No one’s going to get screwed. We’re not going to do crazy things on compensation at the end of the year.”
Masters, who was named to run the business in late 2006, said the bank began dismissals on July 21, a day before the call, to trim overlap after buying parts of RBS Sempra Commodities LLP. The bank cut less than 10 percent of the combined front office, even as the oil unit lost “key people” who needed to be replaced, she said. She was discussing results with top executives after “we made a bit of
America must decide what type of country it wishes to be, and then conform public and foreign policy to those ends, and not the other way around. Politicians have no right to subjugate the constitutional process of government to any foreign organization.
Secrecy, except in very select military matters, is repugnant to the health of a democratic government, and is almost always a means to conceal a fraud. Corporations are not people, and do not have the rights of individuals as such.
Banks are utilities for the rational allocation of capital created by savings, and as utilities deserve special protections. All else is speculation and gambling. In banking, simpler and more stable is better. Low cost rules, as excessive financialisation is a pernicious tax on the real economy.
Financial speculation, as opposed to entrepreneurial investment, creates little value, serving largely to transfer wealth from the many to the few, often by exploiting the weak, and corrupting the law. It does serve to identify and correct market inefficiencies, but this benefit is vastly overrated, because those are quickly eliminated. As such it should be allowed, but tightly regulated and highly taxed as a form of gambling.
When the oligarchy’s enablers, hired help is the politer word, and assorted useful idiots ask, "But how then will we do this or that?" ask them back, "How did we do it twenty years ago?" Before the financial revolution and the descent into a bubble economy and a secretive and largely corrupted government with a GDP whose primary product is fraud.
Other nations, such as China, are surely acting for their own interests, and in many cases the interests of their people, much more diligently and effectively than the kleptocrats who are in power in Washington and New York these days. How then could we possibly subvert the Constitution and the welfare of the people to unelected foreign organizations? If this requires a greater reliance on self-sufficiency, then so be it. America is large enough to see to its own, as the others see to theirs.
Economics will not provide any answers in and of itself. Economics without an a priori policy and morality, without a guiding principle…
When you can’t run a state, run for President. When you can’t run your country, attempt to run the world.
This directive to the G20 is probably going to make the Organizer-in-Chief’s recent pathetic sermonette on altruism and self-denial to Wall Street seem effective by comparison.
Unless he is as prime an example of boobus Americanus as he appears to be by his actions, we suspect that this proposal is intended merely to be an unachievable blue sky diversion from a genuine agenda for reform and action, which might be an annoying hindrance to Obama’s constituents on Wall Street. It has been estimated that the reforms on the table from Europe, for example, might cut the trading revenues at Goldman Sachs by a third.
What Obama does not say, and perhaps does not realize, is that the majority of the problems that exist in the US’s imbalanced trade relationships is the position of the US dollar as the world’s reserve currency.
Owning the reserve currency is a significant benefit for your government and financial sectors, but it makes your manufacturing and productive economy the target of every mercantilist command economy around the globe that is by definition hungry for dollars.
WASHINGTON/BERLIN (Reuters) – U.S. President Barack Obama said on Sunday he would push world leaders this week for a reshaping of the global economy in response to the deepest financial crisis in decades…
The summit will be held in the former steelmaking center of Pittsburgh, Pennsylvania, marking the third time in less than a year that leaders of countries accounting for about 85 percent of the world economy will have met to coordinate their responses to the crisis.
The United States is proposing a broad new economic framework that it hopes the G20 will adopt, according to a letter by a top White House adviser.
Obama said the U.S. economy was recovering, even if unemployment remained high, and now was the time to rebalance the global economy after decades of U.S. over-consumption. (The recovery is as tenuous as Mr. Obama’s prospects for a second term – Jesse)
The US equity markets have bounced back to key resistance on a much great than expected drawdown in oil inventories.
The trade today seems very technical (ie short squeeze by the 100 million dollar men) and lacking in conviction.
Let’s see how the markets deal with this and then trade accordingly. Volumes remain light, and may do so until September. However, if anything ‘happens’ this market may flop as convincingly as Obama’s "change" platform.
“We’ve got to face it. Politics have entered a new stage, the television stage. Instead of long-winded public debates, the people want capsule slogans—‘Time for a change’—‘The mess in Washington’—‘More bang for a buck’—punch lines and glamour.”— A Face in the Crowd (19...
By Jacob Wolinsky. Originally published at ValueWalk.
Bridgewater Associates is in the news again and yet again not for the reasons Ray Dalio and crew would prefer. The latest is a sexual harassment allegation from a Christopher Tarui. Tarui is described as a “34-year-old adviser to large institutional investors in Bridgewater” and he claims that a male supervisor harassed him. Specifically:
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On one occasion, he said, his supervisor confided in him that he had an ...
US equity indexes traded in a narrow range today and finished mixed ahead of Fed Wednesday. Our benchmark S&P 500 exhibited a bit of volatility in the first 90 minutes, hitting its intraday high and low about an hour apart. The index then struggled with yesterday's closing price during the lunch hour and again at the close. It managed to eke out a 0.03% gain as we move toward tomorrow's FOMC minutes and rate decision, expect by most analysts to remain unchanged.
The yield on the 10-year closed at 1.57%, down one basis point from the previous session.
Here is a snapshot of past five sessions in the S&P 500.
Here is a daily chart of the index. We've highlighted the unusually narrow pattern over the past nine sessions, b...
The U.S. Federal Reserve is expected to keep interest rates unchanged this week, deferring any possible increase until September or December, as policymakers hold out for more evidence of a pickup in inflation.
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After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
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Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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