"Financial repression is sometimes the effect of policy even if it is not the intent. It manifests itself, for example, when policy makers react more forcefully to declines in asset prices than to increases.
Price increases tend to be treated with benign indifference. But declines often lead policy makers to respond with force, deploying fiscal stimulus and monetary accommodation. Market participants then conclude that governments have their backs.
Efforts to manage and manipulate asset prices are not new. But history provides little comfort that these practices work. Interfering with market prices occasionally buys time, but rarely do policy makers seize the window of opportunity to enact structural reform. Financial repression embeds the wrong incentives—obfuscation begets delay, and a robust recovery becomes unattainable."
Kevin Warsh, The Financial Repression Trap, 2011
"Through a set of economic policies designed to bail out and subsidize failed and often tainted corporate enterprises, while actively promoting a false sense of confidence to support those policies, the public has become exposed, by those very people entrusted to protect them, to dangerously high levels of hidden counterparty risks.
The cautionary functions of the media, the political class, and the regulatory bodies have been routinely directed, distorted, and even silenced for the benefit of a highly compromised and increasingly self-serving elite. And this corruption has begun feeding on its own momentum, resulting in increasingly blatant examples of deception, distortion, and outright theft. This is crony capitalism, and its deadly credibility trap."
Jesse, April 2012
“All make mistakes, but a good man yields when he knows his course is wrong, and repairs the evil. The only crime is pride.”
Sophocles, Antigone
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Upton Sinclair
Nine out of ten Americans who actually notice these sorts of thins (which are not many) would have noticed that today was a decidedly risk off day in financial asset markets.
With distractions like political yahooism and the Kardashians who can spare the time for such arcane machinations?
VIX took a leg higher to tag its 200 day moving average.
Gold and silver moved lower, and there will be a Comex option expiration on Thursday the 25th.
I still greatly prefer the higher ground, with a little dabbling along the shoreline here and there.
Buy I actually made money today in some select gold mining positions, go figure.
All eyes and ears will be on Powell at Jackson Hole this Friday.
Why? Because although we are probably après-bubble peak, the Fed still has the juice to keep it going or let it slide, at least for now.
At some point an exogenous event will probably take their favorite toy away from the Banksters.
We had almost 2 1/2"" of rain today, starting very early this morning, to it had time to soak in.
That more than doubles what we have had so far this summer.
I have had the garden, and even mature and hardy shrubs, on life support for some time now.
So far we have canned eight quarts of San Marzano and roma tomatoes.
The lawn, alas, looks blow-torched.
Little Daisy is thriving, and slowly but surely taking over things here.
Have a pleasant evening.
