SP 500 and NDX Futures Daily Charts - Hope Floats, and So Does This Market

A bit of a drift higher with a short squeeze based on a report (rumor) that China will ride in on a white horse and bail out Europe by buying their euro bonds.

This is a very mixed market and headline driven. So we wait for the next headline which is what it will take to fuel a sustained rally if it is favorable and substantial.

Bill Black: What I'd Demand of the Fed - Fire Bernanke and Geithner

I think this is a superb list, but a bit misdirected, because as is obvious from my title, the advice ought not to go to the Fed, but to the government in Washington. Timmy is Ben's colleague and quasi-boss, and the problems are intertwined.

That takes nothing from Bill Black who would be an appropriate choice to head one of the big regulatory agencies. And it is unlikely that Obama would appoint him.

The Fed is a critical part of the problem, and is unable to reform itself because it is owned by the banks and the monied interests.

But so is Washington. And that is a matter for a much deeper discussion on the crying need for serious political reform, and how it might be achieved.

They will throw out a landscaper's nightmare of tangled branches, but the key is to strike at the root of it, which is campaign finance reform and the access to power of organized money, and the personal benefits received therein by politicians.

This may not happen now, and the pampered princes of the political aristocracy may put it off yet again. But it will almost certainly happen, one way or the other, after the next financial crisis.

The tragedy is that much of this is within Obama's reach, despite his problems with a fanatical element in the Congress. His priority now is four more years, and to accomplish that he is taking money and orders from the Wall Street bankers.

The Ghosts of Modern Monetary Theory

«Le papier-monnaie revient finalement à sa valeur intrinsèque - Zéro.»

Voltaire

Turk and Keiser Discuss the French Experience with L'illusion de la Monnaie Fiduciaire

American Psycho Redux

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one."

Charles Mackay

The US is remarkable, not for any unusual distribution of psychopaths amongst its people, but rather for the high regard and admiration in which the more articulate and successful psychopaths and sociopaths among their ranks are held by the public, their natural prey.

The problem is not that there are disturbed and destructive people in a society. The problem is when they are able to subvert a culture to satisfy their goals, when their animalistic cunning and heartlessness becomes fashionable, imitated, and even respected.

It is surely the greatest triumph of madness over common sense since the self-destruction of nations in the 20th century. Whole peoples surrendered themselves to ruthless leaders, thrilled to be ravaged by power without weakness. They drank deeply from the cup of madness and danced with the culture of death. And that is what it is to be without boundaries or constraints, free as gods on earth.

"He may have destroyed men, women, and children, and condemned thousands of families to homelessness and despair, but he never wavered in his resolve and conviction while doing it. He amassed great power and fortune, and he never got caught. He believed in himself, and he's a winner."

"The manipulative con-man. The guy who lies to your face, even when he doesn’t have to. The child who tortures animals. The cold-blooded killer. Psychopaths are characterised by an absence of empathy and poor impulse control, with a total lack of conscience.

About 1% of the total population can be defined as psychopaths, according to a detailed psychological profile checklist. They tend to be egocentric, callous, manipulative, deceptive, superficial, irresponsible and parasitic, even predatory.

The majority of psychopaths are not violent and many do very well in jobs where their personality traits are advantageous and their social tendencies tolerated. However, some have a predisposition to calculated, “instrumental” violence; violence that is cold-blooded, planned and goal-directed.

Psychopaths are vastly over-represented among criminals; it is estimated they make up about 20% of the inmates of most prisons. They commit over half of all violent crimes and are 3-4 times more likely to re-offend. They are almost entirely refractory to rehabilitation. These are not nice people.

So how did they get that way? Is it an innate biological condition, a result of social experience, or an interaction between these factors?

Longitudinal studies have shown that the personality traits associated with psychopathy are highly stable over time. Early warning signs including “callous-unemotional traits” and antisocial behaviour can be identified in childhood and are highly predictive of future psychopathy.

Large-scale twin studies have shown that these traits are highly heritable – identical twins, who share 100% of their genes, are much more similar to each other in this trait than fraternal twins, who share only 50% of their genes. In one study, over 80% of the variation in the callous-unemotional trait across the population was due to genetic differences. In contrast, the effect of a shared family environment was almost nil.

Psychopathy seems to be a lifelong trait, or combination of traits, which are heavily influenced by genes and hardly at all by social upbringing.

The two defining characteristics of psychopaths, blunted emotional response to negative stimuli, coupled with poor impulse control, can both be measured in psychological and neuroimaging experiments...They do not seem to process heavily loaded emotional words, like “rape”, for example, any differently from how they process neutral words, like “table”.

This lack of response to negative stimuli can be measured in other ways, such as the failure to induce a galvanic skin response (heightened skin conduction due to sweating) when faced with an impending electrical shock...

The psychopath really just doesn’t care. In this, psychopaths differ from many people who are prone to sudden, impulsive violence, in that those people tend to have a hypersensitive negative emotional response to what would otherwise be relatively innocuous stimuli."

Craig, M., Catani, M., Deeley, Q., Latham, R., Daly, E., Kanaan, R., Picchioni, M., McGuire, P., Fahy, T., & Murphy, D. (2009). Altered connections on the road to psychopathy Molecular Psychiatry, 14 (10), 946-953 DOI: 10.1038/mp.2009.40