Pay and Deregulation in the US Financial Industry

"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud.   The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident."

Charles H. Ferguson


“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage.

And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.”

Kurt Vonnegut, God Bless You, Mr. Rosewater


"Call me dark, but what I see here is a toxic relationship between deregulation, underpriced risk, and exorbitant, inefficient pay scales that contribute to the growth of inequality, not to mention the shampoo economy (bubble, bust, repeat)."

Jared Bernstein, A Striking Picture of Pay and Deregulation in Finance

A country foolishly deregulates the safeguards created by their forefathers, trusts to the natural goodness of those most hungry for wealth and power, and increases the incentives for enormous wealth by creating loopholes and cutting tax rates, and de-penalizing even the most shocking kinds of white collar crimes.  They recreate the mistakes of history with a wanton disregard for the consequences.

And still they wonder why.  Why do we persecute the poor, and idolize those who would rule us all, without pity or even normal cautions against crises ?  And they say, for God and freedom.

Financial corruption has twisted and perverted public policy, distorted the economy, and polluted the corridors of political and economic power with a flood of easy money.

h/t Jared Bernstein

Related:
A Brilliant Warning On Robert Rubin's Proposal to Deregulate Banks, circa 1995
Andrew Jackson Day Remembered

Gold Daily and Silver Weekly Charts - Flight To Safety

The miners continued to get pounded along with tech momentum stocks as this week turned out badly for equities overall.

Gold is still outperforming silver, and has the taste of a minor 'flight to safety' in the price action.

The Comex warehouses continue to be a foggy snoozer, and stopped contracts are a formidable percentage of the deliverable gold category.

But the Comex is a shell game, and so I am not looking for things to start there, but to perhaps surface there once they start overseas with a break in the physical deliveries chain, despite the continuing assurances from the team of Shill & Troll that it is all in your mind, and that such a thing could never happen.

Have a pleasant weekend.

 

SP 500 and NDX Futures Daily Charts - Lions and Tigers and Bears, Oh My!

The selling this week is being attributed by the pundits to 'tax selling.'

I won't debate that, but I will say that if the selling continues next week it probably is not tax related, but related to overly high valuations and a thorough wash and rinse.

The momentum stocks in tech continued to lead the way down, with JPM contributing something to the Dow Industrials (what an abomination to include JPM in the Dow Industrials) with its miss in the quarterly numbers this morning.

Unemployment claims came in low, but PPI came in a bit hot. But the selling looks more like a game of trader tag more than any reflection of fundamentals getting better or worse.

I own *no* stocks here, but I was giving it some serious thought today, miners-wise. But I decided to wait for next week.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Gold Continues Higher

Gold led the way higher as silver is still stuck around the 20 handle.

It had the feel of a 'flight to safety' as stocks took it on the chin, including the miners.

Let's see what happens.