"The whore and gambler, by the state
Blake, Great Dragon and Woman Clothed in the Sun
Licensed, build that nation’s fate.
The harlot’s cry from street to street
Shall weave old England’s winding-sheet.
The winner’s shout, the loser’s curse,
Dance before dead England’s hearse.
Every night and every morn
Some to misery are born,
Every morn and every night
Some are born to sweet delight.
Some are born to sweet delight,
Some are born to endless night.
We are led to believe a lie
When we see not through the eye,
Which was born in a night to perish in a night,
When the soul slept in beams of light.
God appears, and God is light,
To those poor souls who dwell in night;
But does a human form display
To those who dwell in realms of day."
William Blake, Auguries of Innocence
US equity prices are being driven now by classic bubble action. Stocks are being bought, not with regard to any fundamentals for the most part, but for the sheer momentum of ever rising prices by speculators.
It should be noted that any stock that breaks the mirage with a negative earnings report is soundly thrashed, most of the time. And for those who beat earnings, too often it is due to stock buybacks and accounting magic.
Having created this asset bubble, for the third time, in conjunction with the financiers and Wall Street, the Fed is deathly afraid of anything that will break the mirage and put the banking system at risk. Their focus is not on the public. If it was, they would be engaging in serious reform and a broader distribution of gains. But when it suits them they forget about their broad regulatory powers, including those it fought to have after the last bubble and bust.
And so we are seeing, like a dog returns to its vomit, the Banks starting to take up the kinds of highly leveraged risks that brought the global economy to the brink in the unwinding of the housing bubble in 2008.
Surely they must care. Surely they must have a caution for the damage that they will cause to untold thousands of innocents. And if not the money men, then those who are sworn to restrain their greed must surely take a stand for the innocent common people.
As John Kenneth Galbraith observed in his masterwork, The Great Crash of 1929, 'The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.'
And you can include the political and corporate media elite in that observation as well. It's a club, and you aren't in it. And it is becoming increasingly unashamed and rapacious.
Have a pleasant evening.
