Wall Street v. Wall Street

Here we are again, on the eve of massive asset bubbles purges. And as always (see for instance "Mondialisation : du "free market" au "fair market" - 20070726, "This is not a financial crisis" - 20080711*):

• This is not a financial crisis, but a crisis of finance. 
• This is not an economic crisis, but a crisis of economics. 
• This is not a political crisis, but a crisis of politics. 

Which means, as always, that:

• we will not solve anything by rejecting finance, economy, and politics - that's exactly what brought us the rise of extremism and populism, Brexit, or of course Trump.
• we must to the contrary embrace finance, economy, and politics - at their core, starting from  their definitions, exposing smokescreens and impostures, demanding transparency and accountability.

So what happened after Lehman? Further desertion by people with basic notions of economics, or at least traces of common sense (I won't even mention 'moral compasses'). If it weren't for the A.I. algorythms and high-frequency trading that amplify and perpetuate the illusion, the most blatant bubbles would have probably alreaday burst years ago.

DJI chart (2nd biggest component after Boeing, Goldman Sachs weighs 11.6 times more than GE)

Nasdaq - better real/virtual ratio than before the dotcom crisis, but Apple (14.6% of the index, 4.9% of the DJI) and co will eventually meet reality.

Politicians? They totally surrendered. Back in 2009, they still had the power to change things by injecting tens of billions of dollars, and by passing a few legal safeguards - but now governments are weaker than ever, and they let their agenda be set by the very firms they bailed out without actually purging the system. 

Exhibit A: Goldman Sachs, who were instrumental in frauds leading to major crises (e.g. betting against toxic assets they helped create, or forging figures with the Greek government), are now stronger than ever, and still runnig the show (Steven Mnuchin, Gary Cohn, Mario Draghi, Robert Zoellick, Jose Manuel Barroso...). They aim at becoming the alpha and omega, or rather the Alphabet of finance since, like google, they're investing massively in A.I. to comfort their leadership.

Beyond this caricature, our financial systems rejected finance as an enabler for the economy. Not just Wall Street against Main Street, but ultimately Wall Street against Wall Street*. Emboldened by impunity (except maybe in Iceland, that lone country where The People put corrupt politicians and banksters in jail), these guys prolonged the bailouts with a wonderful invention, Quantitative Easings: after emptying governmental chests, they simply decided to print money for themselves - officially to fuel the economy, but actually to improve already indecent balance sheets, and to widen wealth (and reality) gaps in abyssal proportions. They brought back derivatives, fantasy league ratings, or gambling, and they're gutting Dodd-Frank like they gutted Glass-Stiegel.

What happened after Lehman was Lehman on steroids.

What happens next is for history books. 

And if by 'miracle' these guys manage to prevent the fall until after the Mid-term elections, all bets are off.

blogules 2017
Since 2003, nonsensical posts about noncritical issues in nonenglish (get your blogules transfusion in French)
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* also 'the ultimate stage of free market is the negation of the market' ("Le stade ultime du libéralisme, c'est la négation du marché (le déni d'économie continue") - 20110302) 

Constitutionless

Japan just voted for its Peacexit - or is it Democracexit? After securing a 2/3 majority in the House of Councillors, Shinzo Abe is getting closer to his lifetime dream: undoing the nation's postwar constitution and restoring the fundamentals of the imperial rule that disgraced it.

The UK doesn't have a constitution to protect, and it doesn't have a clue how to cope with the Brexit mess that left the whole political spectrum in shambles. David Cameron, Boris Johnson, Nigel Farage, Jeremy Corbyn, all lost face, leaving to Mother Theresa May the tough job of caring for untouchable issues. At least, something is working in the UK this Summer: Sadiq Khan got elected, and the Chilcot Report exposed Tony Blair's responsibility in George W. Bush's Iraq imposture**.

Europe doesn't have a constitution, but it remains ruled from 101 Constitution Ave NW, Washington, DC 20001, the headquarters of Goldman Sachs, a company that gave us Draghi, and is hiring Barroso. Mario Draghi is certainly not Jean-Claude Trichet, Jose-Manuel Barroso is certainly not Jacques Delors, and Hollande is not even Giscard. Where's there's no political will...

No constitution? No problem: 101 Constitution's so easy to learn! Just dial Constitution 101, and ask for instructions from Goldman Sachs

Israel doesn't have a constitution, and it helps when you want to circumvent the rule of international law. In the 2008 and 2012 tradition (see "Deja vu all over again"), I expect Bibi Netanyahu to seize the US election year opportunity and further fuel tensions with Palestine. It would only take a few skirmishes to start the fireworks... who wants to bet?

blogules 2016
Since 2003, nonsensical posts about noncritical issues in nonenglish (get your blogules transfusion in French)
NEW: join blogules on Facebook!!! and Twitter (@stephanemot, @blogules)

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* "Japan votes Peacexit - if not Democracexit" Seoul Village 
** reminder: "Invasion of Iraq: The Bush Legacy in 3 Impostures"

Tony Blair : a newborn fundamentalist President of Europe ?

Unsurprisingly, Tony Blair came out in the open as a candidate for the Presidency of Europe.

The problem is that previously, he also came out in the open as a newly converted Catholic. Some - including yours truly - would rather say "born again fundamentalist".

After palling and praying around with a fundamentalist imposteur (George W. Bush), after courting a fundamentalist pope (Benedict XVI), The Right Honourable Anthony Charles Lynton Blair will be welcomed by people like fundamentalist Luc van den Brande, the man who a couple of years ago censored a report denouncing creationist / Intelligent Design lobbies at governmental levels across western Europe.

So this man can campaign on consensual and noble causes as much as he wants on his website (he just published "Technology for a Low Carbon Future" - tonyblairoffice.org), make no mistake : his job is to boost fundamentalism and to turn Europe into a safe haven for US style cults and megachurches.

Europe simply must not be represented by a Tony Blair - Jose Manuel Barroso ticket.

Other "political" news ? Former Solidarnosc Jerzy Buzek, the European Parliament's new President, is following the Lutherian Evangelical Church of Augsburg.

Amen.

Paulson, Sarkozy to Socialist Heaven : "show me the money !"

Europe hastily awarded some jailed Chinese dissident with some prestigious human rights prize before embarking on a plane for Beijing.

There, Jose Manuel Barroso, Nicolas Sarkozy et al went down on their knees and begged the Great Socialist Empire to let some of its wealthy reserves trickle down over the bankrupt Capitalist rest of the World.

From DC, Hank Paulson also asked the IIIrd Millenium's Hyperpower to consider some kind of a Marshall plan ("could you please bail out the US of A ? you know, we don't hate socialists that badly, after all - according to John McCain we're even about to elect one as our President").

In other words, capitalism defies socialist China : "Show me the money".

Wen Jiabao is all ears. And smiles*. "Yes, we can".

Yes, Wen can provide some kind of relief to his new admirers, but he has some fish to fry at home as well. Will he chose to secure China's business model and one fifth of the World's population, to help the richest fifth, or to give a hand to the forgotten rest ? Probably a little bit of each : China will durably strengthen its positions in Asia, Africa, Europe and America, but the trickiest part will be China itself (see "Pervasive China's CIA (Central Investment Agency)").

New series of models will emerge. Not this week-end. Nor November the 15th, when the World Egghead Forum takes place. Nor even during the couple of years to come. But timely (at a geologic time scale at least).

They will differ from XXth century socialism or capitalism (see "This is not a financial crisis"), and China is no exception.

* Actually, I'm wondering how badly Wen's jaws hurt - he was already jubilating during his interview with Zakaria a couple of weeks ago (GPS @ CNN / Newsweek). But not as much as I did, listening to Alan Greenspan swallow just a tiny little bit of his titanic pride.