Regulatory Capture: The Banks and the System That They Have Corrupted

"But the impotence one feels today— an impotence we should never consider permanent— does not excuse one from remaining true to oneself, nor does it excuse capitulation to the enemy, what ever mask he may wear.  Not the one facing us across the frontier or the battle lines, which is not so much our enemy as our brothers’ enemy, but the one that calls itself our protector and makes us its slaves.  The worst betrayal will always be to subordinate ourselves to this Apparatus, and to trample underfoot, in its service, all human values in ourselves and in others."

Simone Weil


"And in some ways, it creates this false illusion that there are people out there looking out for the interest of taxpayers, the checks and balances that are built into the system are operational, when in fact they're not.  And what you're going to see and what we are seeing is it'll be a breakdown of those governmental institutions.  And you'll see governments that continue to have policies that feed the interests of -- and I don't want to get clichéd, but the one percent or the .1 percent -- to the detriment of everyone else...

If TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car... I think it's inevitable. I mean, I don't think how you can look at all the incentives that were in place going up to 2008 and see that in many ways they've only gotten worse and come to any other conclusion."

Neil Barofsky


"Written by Carmen Segarra, the petite lawyer turned bank examiner turned whistleblower turned one-woman swat team, the 340-page tome takes the reader along on her gut-wrenching workdays for an entire seven months inside one of the most powerful and corrupted watchdogs of the powerful and corrupted players on Wall Street – the Federal Reserve Bank of New York.

The days were literally gut-wrenching. Segarra reports that after months of being alternately gas-lighted and bullied at the New York Fed to whip her into the ranks of the corrupted, she had to go to a gastroenterologist and learned her stomach lining was gone.

She soldiered through her painful stomach ailments and secretly tape-recorded 46 hours of conversations between New York Fed officials and Goldman Sachs. After being fired for refusing to soften her examination opinion on Goldman Sachs, Segarra released the tapes to ProPublica and the radio program This American Life and the story went viral from there...

In a nutshell, the whoring works like this. There are huge financial incentives to go along, get along, and keep your mouth shut about fraud. The financial incentives encompass both the salary, pension and benefits at the New York Fed as well as the high-paying job waiting for you at a Wall Street bank or Wall Street law firm if you show you are a team player.

If the Democratic leadership of the House Financial Services Committee is smart, it will reopen the Senate’s aborted inquiry into the New York Fed’s labyrinthine conflicts of interest in supervising Wall Street and make removing that supervisory role a core component of the Democrat’s 2020 platform. Senator Bernie Sanders’ platform can certainly be expected to continue the accurate battle cry that 'the business model of Wall Street is fraud.'"

Pam Martens, Wall Street on Parade

This is a good example of both regulatory capture and the credibility trap that co-opts those who benefits from the system as it is, even if it is by turning a blind eye and saying nothing, going along to get along, taking the 'bullet or the bribe.'

Never assume that because a person, such as media analyst or reporter, is highly paid that they are somehow beyond the temptation to violate their trust.  Quite the contrary.   They do not believe that change can come because they have anaesthetized their integrity as a matter of convenience.  And when called upon, they will support and defend and excuse the system as it is, at first by their inaction, and then by their willing cooperation.

The corruption takes a person one seemingly innocuous decision and event at a time.  their separate their fingers, one by one, until they finally let their souls slip through and fall— and they belong to the darkness of this world.  And at the end of the day, for what?   A little more money, the patina of prestige and superiority, access to power?

Who then can stand against the world, when power and money are assumed and created out of nothing, and distributed in an unjust, interconnected system of favors and services, without duty and without honor?

And so those captured in this system excuse and accept their own part in it, for their personal benefit and professional ego and advancement, that heady feeling of sophistication and acceptance by the worldly.

It's an old story  It is so old that at times it seems as if distant, just a story from another time— a fable.   But it is real.  It is the very fundamental core of this reality.  It is the continuing struggle.

It is, in the end, the only thing that matters, the only triumph or personal tragedy.  It is the only consequence that you will dwell upon, when the husk is stripped bare, and you yourself face the only certainty in this world alone, and as your truly are.

Stocks and Precious Metals Charts - American Gods - Stock Option Expiration Next Friday

This is the kind of fasting that I want;
Free those who are wrongly imprisoned;
    lighten the burdens of those who work for you.
Let the oppressed go free,
    and remove the chains that bind people.
Share your food with the hungry,
    and give shelter to the homeless.
Give clothes to those who need them,
    and do not turn your backs to your family and friends.

Isaiah 58:6-7


"We confess to being fools and wish that we were more so.  What we would like to do is change the world–make it a little simpler for people to feed, clothe and shelter themselves as God intended them to do.  And to a certain extent, by fighting for better conditions, by crying out unceasingly for the rights of the workers, of the poor, of the destitute–the rights of the worthy and the unworthy poor in other words, we can to a certain extent change the world; we can work for the oasis, the little cell of joy and peace in a harried world. 

We can throw our pebble in the pond and be confident that its ever widening circle will reach around the world."

Dorothy Day

The US Jobs Report came in shockingly low. So low in fact that after the initial shock, the markets were able to largely disregard it into the close.

There is a widespread feeling though that the Fed has been sidelined for the year in their program of higher interest rates. But they still seem to be determined to steadily unwind their very bloated balance sheet.

So with the pessimism about interest rate increases the US Dollar fell rather heavily from its recent overdone highs.

And commensurately gold and silver took off from their short term oversold lows.

Although there is some cheering with regard to the increase in average wages, 'average' does not quite do it, in a time of epic inequality, and the increase was slight.

And a few astutely noted that the work week declined a bit as well.  So much for full employment and strains on labor.

Hardly signs of a recovery.   But hope, and the narrative of bulloney in which it is wrapped these days, beats eternal in the worldlings.

There will be a great deal of fresh economic news next week.  I have included the calendar for next week below.

Foolishness and foolhardy stubbornness has already infected many, driving them to love the lie and stoke a smoldering resentment against the other in their hardened hearts.   I fear that few will be able to remain standing when the cold winds of consequence begin to sweep across the land.  And being a favored group in identity politics is certainly no safeguard or protection from the taint of evil.  We become what we hate.

Need little, want less, love more.  For those who abide in love abide in God, and God in them.

Have a pleasant evening.

Stocks and Precious Metals Charts - A Spoonful of Sugar... - Non-Farm Payrolls Tomorrow

"The world needs a new generation of policymakers who don’t hobnob with billionaire speculators and who understand workers’ concerns.  Unfortunately, the change will not come smoothly."

Andy Xie


"The oligarchs are flush with victory, and feel that they are firmly in control, able to subvert and direct any popular movement to the support of their own fascist ends and unslakable will to power.

But my model says that the oligarchs will continue to press their advantages, being flushed with victory, until they provoke a strong reaction that frightens everyone, like a wake up call, and the tide then turns to genuine reform."

Simon Johnson, The Quiet Coup, August 2010


"You who make wicked judgements, who write oppressive laws to deprive the needy of justice, and to rob the poor of their rights, that widows may be your victims, and that you may make the orphans your prey— what will you do on the day of reckoning, when the consequences come from afar?  To whom will you run for protection, and where will you hide your riches?"

Isaiah 10:1-3


"In the painting, the woman clutches desperately at the knee of the statue, yearning up into its face, which stares down at her remorselessly. The statue holds out a bag of gold, but the woman ignores the money. She has moved beyond the love of money, to the love of Mammon himself. And so she has cut herself off from the love of God, embracing her own destruction."

Museum catalogue, Mammon the God of Worldliness

The reflexive and effusive outrage of those who give themselves over to every selfish impulse, having emptied their souls in service to Mammon, find their hearts to be weightless before the slightest indignation, naked to their insatiable inner child.  There is a restless void in their being by which they are driven, vainly, to fill their emptiness with things, with sensations, with other people.

But having lost themselves, having lost the ability to love, they can find no peace, no joy, and no rest.  They are broken vessels, lacking substance like that which they serve—  dead things, compelled to remain always in motion to simulate life.

Stocks broke down today, but managed to finish off the lows of the day. The extra sugar being supplied by the European Central Bank thrilled stocks for a moment, but only for a moment.

Gold and silver were flattish as the Dollar gained some ground off the dovishness of the ECB.

Tomorrow will be a Non-Farm Payrolls report.

Have a pleasant evening.

Stocks and Precious Metals Charts - This Is Why We Can't Have Nice Things - Audacious Oligarchy

"This week, I am introducing legislation to end a war that should have ended long ago, the war in Afghanistan.  The United States has been fighting The War on Terror™ since October of 2001 and it has cost 6 trillion dollars."

Senator Rand Paul


“The war is waged by the ruling group against its own subjects and its object is not the victory over either Eurasia or East Asia, but to keep the very structure [status quo] of society intact. The war is not meant to be won, it is meant to be continuous.”

George Orwell


“A racket is best described, I believe, as something that is not what it seems to the majority of the people.  Only a small 'inside' group knows what it is about.  It is conducted for the benefit of the very few, at the expense of the very many.  Out of war a few people make huge fortunes."

Major General Smedley Butler, War Is a Racket


"America's infrastructure is desperately in need of investment, according to the American Society of Civil Engineers.  The ASCE estimates the US needs to spend some $4.5 trillion by 2025 to fix the country's roads, bridges, dams, and other infrastructure."

Thompson and Matousek, America's Infrastructure Is Decaying

Between the continuous wars, bailing out the financial system, and subsidizing the soft corruption of the ruling class there seems to be little left over for keeping the country's infrastructure up to date and competitive.

Stocks failed to rally again today, but within an uptrending channel. I have marked it on the stock futures charts.

Gold and silver held their ground once again. The Dollar declined slightly.

Are we not exceptional? Are you not entertained?

Have a pleasant evening.