Mahatma Gandhi said that seven things will destroy us. Notice that all of them have to do with social and political conditions. Note also that the antidote of each of these deadly sins is an explicit external standard or something that is based on natural principles and laws, not on social values.
- Wealth Without Work
- Pleasure Without Conscience
- Knowledge Without Character
- Business Without Morality
- Science Without Humanity
- Religion Without Sacrifice
- Politics Without Principle
As dangerous as a little knowledge is, even more dangerous is much knowledge without a strong, principled character. Purely intellectual development without commensurate internal character development makes as much sense as putting a high-powered sports car in the hands of a teenager who is high on drugs. Yet all too often in the academic world, that's exactly what we do.”
Stephen R. Covey, Principle Centered Leadership, 1990
"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud. The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident.
This behaviour is criminal. We are talking about deliberate concealment of financial transactions that aided terrorism, nuclear weapons proliferation and large-scale tax evasion; assisting in major financial frauds and in concealment of criminal assets; and committing frauds that substantially worsened the worst financial bubbles and crises since the Depression.
Total fines on the banks for their role in the Enron fraud, the internet bubble, violation of sanctions against countries including Iran and money-laundering activities appear to be far less than 1% of financial sector profits and bonuses during the same period.
There have been very few prosecutions and no criminal convictions of large US financial institutions or their senior executives. Where individuals not linked to major banks have committed similar offences, they have been treated far more harshly.
Almost all the prospectuses and sales material on mortgage-backed bonds sold from 2005 until 2007 were a compound of falsehoods. And as the bubble peaked and started to collapse, executives repeatedly lied about their companies' financial condition. In some cases, they also concealed other material information, such as the extent to which executives were selling or hedging their own stock holdings because they knew their firms were about to collapse."
Charles Ferguson, Heist of the Century, The Guardian, 20 May 2012
Future historians may well characterize this period of decline in Western democracy as a general failure of character, and the pursuit of power and pleasure without virtue or conscience that became epidemic among the power elite.
From time to time men go mad. And sometimes they go mad in herds. But the madness serves none but itself.
Stock rallied today, despite or because of the fresh outbreak of conflict in the Middle East.
One can easily picture our oligarchs joining together in greedy defiance and price discovery and consequence. Because they have done it before, repeatedly.
This is how they can show they are truly masters of the universe, exceptional.
It is said that Israel has now joined the US in direct attacks on Iran.
This is the overreach of madness.
Gold and silver rallied back a bit.
VIX of course fell.
Bitcoin is bouncing along the bottom of the intermediate trend channel.
Crypto and its various manifestations are the child of excessive liquidity, and the suspension of judgement in a fascination with new technology.
If liquidity dramatically recedes from the markets, these curiosités captivantes may be left stranded, like sun-bleached bones on a beach, along with a wreckage of many similar devices of technological hubris.
This has already happened to the mania of non-fungible tokens (NFT).
Bubbles promote excessive build-outs of malinvestment. These are the cumulative effect of moral hazard, cultivated by the astonishing lack of market discipline, and effective and equal justice.
"Moral hazard is the probability that a party insulated from risk will behave differently from the way they would behave if fully exposed to the risk. Moral hazard arises because an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act with increasing recklessness, literally 'without reckoning.' It also encourages the rise to power of sociopaths in society as a whole.
The wristslaps and bailouts will continue until these modern maestros create damage too great to be bought off in the backrooms. Their descent from the heights will be impressive, if you can avoid the impact crater."
Jesse, Moral Hazard, 22 March 2008
The powerful princes of privilege have become addicted to the notion that others must bear the weight of their lawlessness.
Sow the wind, reap the whirlwind.
Have a pleasant evening.
