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

Of haircut and hair-splitting trends in Europe

Here are the main decisions taken in Brussels by Eurozone leaders :
- Greece is saved : since George Papandreou was already almost bald, banks will get the haircuts. And as the first country to adopt the new SubEuro, Greece shall inaugurate S&P's new rating systems (phi beta kappAAA)
- Italy is saved : Silvio Berlusconi's ratings will not be downgraded (BungabungAAA+)
- France is saved : andouillettes will keep their most attractive labels (AAAAA)
- Germany is saved : Angela Merkel will control the European Financial Stability Facility (EFSF). She already mandated her new finance minister, Herman Cain, to implement his latest 9-9-9 formula (9% Bitburger, 9% Tsingtao, 9% CaipirinhAAA+)
- the UK is saved : David Cameron will become King of the Northern half of the NonEuroZone and the nation enjoy its specific ratings (USAAA-)
- the Euro is saved : as soon as Mario Draghi succeeds Jean-Claude Trichet as head of the ECB, all junk bonds shall be handled by Naples Waste Managment Offshore Limited (CamorrAAA+)

Not everyone agrees.

Ever the rebel and the haircut and hair-splitting diva, Paris Hilton decided to initiate the Occupy Rodeo Drive movement. And in order to fend off police forces who may try to prevent her from raiding shops, she can count on her latest Fendi Hit Bag.

blogules 2011