"Over the last 10 years, there has been so much financial scandal, so many battles between regulators and financiers, and so much complexity (more liquidity and less leverage with your tier one capital, anyone?) that a large swath of the public has become numb to the debate about how to make our financial system safer.
That’s a dangerous problem, because despite all of the wrangling and rule making, there’s a core truth about our financial system that we have yet to comprehend fully: It isn’t serving us, we’re serving it."
Rana Foroohar, How Big Banks Became Our Masters, NYT
As the paint is drying on the tape for the end of the third fiscal quarter, I am posting out a little early. Visitors from out of town are coming, and I wish to make some preparations to make them welcome.
The Dollar caught a big today on speculation that President Trump will be appointing a 'hawkish' replacement for Janet Yellen as the Chairman of the Fed. Whether the bias of one person, even the Fed Chief, will be able to swing interest rates markedly higher is open to debate.
Nevertheless, the President promises us a decision in a couple of weeks, so we will have to put up with giddy speculation out of the financial class. It is good to remember that when it comes to fiscal and economic governance, the focus these days is on the process, the financialization of the economy, rather than the product, which is the economy itself.
I do not wish to draw too many conclusions, therefore, about the action this week, because it was the end of the quarter and the posting of financial results that was driving the Street, and not the fundamentals underlying what it is that they do.
The mispricing of risks has become so profound, and our leadership so casually scurrilous to the truth, that it is now difficult to determine just how far off course we really are.
Have a pleasant weekend.
