During that time, the markets went from being very afraid and down to being very, very high. A lot of people said, well, we’re all at home using Zoom, so therefore the market just rebounded by so much. But that was just a small part of it. The bigger part was that money became available at such an immense level and therefore the distortion between where money goes in the financial markets and where it doesn’t go in the real economy became permanent. At that moment I saw that this can happen in any amount, at any time. There’s no restriction, no transparency, no responsibility."
Nomi Prins, You’re Living in a World Wrought by the Fed, 17 November 2022
"Unless one has placed oneself on the side of the oppressed, to feel with them, one cannot understand. As soon as men know that they can kill without fear of punishment or blame, they kill; or at least they encourage killers, with approving smiles. Evil when we are in its power is not felt as evil, but as a necessity, or even a duty."
Simone Weil
"Once central banks unleashed monetary policy to accommodate mega-banks, subsidize Wall Street financiers, and bolster global markets, the very idea of free and open markets and laissez-faire investing died. No one wanted to call the Fed’s QE a Ponzi scheme. But it was.
Whether it was done to soothe a stock market crash, a ruptured subprime housing market bubble, or a pandemic, the Fed’s response to the financial crisis of 2008 and later crises has confirmed that it will always seek a way to grease the wheels of capitalism for its wealthiest participants and private banks. The results speak for themselves."
Nomi Prins, Permanent Distortion: How the Financial Markets Abandoned the Real Economy, October 11, 2022
As you may have likely heard the economic data this morning from the Non-Farm Payrolls report was a big miss, but apparently not great enough to swing the fear vector all the way around.
Hence, we have the 'goldilocks' effect.
Stocks roared higher, on expectations of no more Fed rate increases anytime soon.
And wistful yearnings for a rate cut.
The Dollar tanked.
My son said it was a good movie to watch. I said I had seen it, and had lived it. And the crash before that. And that. And that.
A stunning cast illuminates a realistic but somewhat spare depiction of unbridled greed going badly, for some. It was spare, perhaps, reflecting the characters who were really that banal.
The same sorts of people make the same egregious errors and fiduciary lapses, again and again, and are richly rewarded and rarely punished, pleading ignorance and benign intentions.
Bubbles and busts are acts of nature, right? Maybe the unnatural nature.
Who could have seen it coming— with their eyes closed and their greedy maws open?
Have a pleasant weekend.
