"We should ban banks from risk-taking because society is going to pay the price... It was obvious that their profits were simply cash borrowed from destiny with some random payback time."
Nassim Nicholas Taleb
"The Gramm-Leach-Bliley Act makes the most important legislative changes to the structure of the U.S. financial system since the 1930s. Financial services firms will be authorized to conduct a wide range of financial activities, allowing them freedom to innovate in the new economy.
The Act repeals provisions of the Glass-Steagall Act that, since the Great Depression, have restricted affiliations between banks and securities firms. It also amends the Bank Holding Company Act to remove restrictions on affiliations between banks and insurance companies. It grants banks significant new authority to conduct most newly authorized activities through financial subsidiaries.
Removal of barriers to competition will enhance the stability of our financial services system. Financial services firms will be able to diversify their product offerings and thus their sources of revenue. They will also be better equipped to compete in global financial markets."
William Jefferson Clinton, November 12, 1999
There was a highly observable 'flight to safety' today in the markets, in response to fears for the political and financial stability of Italy.
The US dollar was again sharply higher, and US debt saw its yields decrease in response to safe haven buying.
Gold and silver were largely unchanged in the face of the soaring dollar.
There are a number of sources of potential geo-political instability in the world. The Australian housing bubble is capable of taking down a Bank or two given the bubble in housing debt valuations. Canada is also riding a housing bubble in several of its major cities. And the US is once more vulnerable to a cascade of counter-party failures which, need we say it, no one could possibly see coming.
But for now the focus is on Europe and on Italy, which had dared to form a populist government which was taken down by the President.
This holiday-shortened week is packed with economic data releases.
There will be a Non-Farm Payrolls Report on Friday
Need little, want less, love more.
Have a pleasant evening.
