NAV Premiums of Certain Precious Metal Trusts and Funds

Gold and Silver are quietly moving through an economic gauntlet towards August delivery period.

COMEX Registered Gold Inventory Continues To Decline

Gold is flowing from West to East.

Gold Daily and Silver Weekly Charts - Slogging Slowly Through an FOMC and GDP Week

“I worry about the effects on the long-run stability and efficiency of our financial system if the Fed attempts to substitute its judgments for those of the market.”

B. S. Bernanke, 15 October 2002

Jawboning for the first part of this week from the Fed, and a pseudo-random number may pop out as GDP.

So by default the Jobs Report will be the big market mover, and probably undeservedly so.

Goldman reiterated its call for a sell in gold, as did the big Roubini.

Talk is cheap.  Stand and deliver.

SP 500 and NDX Futures Daily Charts - Econ Heavy Week from Wednesday Forward

The real action this week will start on Wednesday with GDP and the FOMC decision.

I doubt very much that the Fed will do anything at this meeting, but there may be more taper talk.

GDP may be a tough call because I hear that they are going to be revising the data back to Christopher Columbus.  So who knows what they may provide.

Therefore I think if there is a market mover this week it will be the Jobs Report on Friday.

Macleod: Bank of England May Have Directed Release of 1,300 Tonnes of Central Bank Gold

Although it is not been verified I thought this calculation by Alasdair Macleod was quite striking.

Based on recent figures from the Bank of England, it appears as though the Bank of England has directed the leasing of about 1,300 tonnes of central bank gold from their vaults in a four month period from March through June. 

Or at least that is the surmise, given the inventory level at the end of February and the stated inventory on the Bank of England website at the end of June.  Macleod thinks that this was done in support of the gold price smackdown.

One has to wonder how that bullion will eventually be returned to its rightful owners, given that it apparently has been taken from the vault and delivered to the refineries en route to the East, or may even be sitting in some vault somewhere with a high stack of paper claims set against it.

Perhaps the claimants will be told to 'wait seven years' for it, or settle now for cash.

Weekend Viewing: I Am Fishhead

"An ordinary human being, with a personal conscience, personally answering for something to somebody and personally and directly taking responsibility, seems to be receding farther and farther from the realm of politics.

Politicians seem to turn into puppets that only look human and move in a giant, rather inhuman theatre; they appear to become merely cogs in a huge machine, objects of a major civilizational automatism which has gotten out of control and for which nobody is responsible."

Vaclav Havel, 24 May 1993

I have a high regard for Frank Ochberg, although he normally writes about other aspects of psychology especially Post Traumatic Stress Disorder and victimization. 

 

Like others in business, I have had the occasional misfortune to encounter a few obvious narcissists, and probable psychopaths, during my thirty years long corporate business career.   I learned to avoid them at all costs, no matter how intriguing or attractive their activities and personalities may have been.  There was always a price to be paid.  And if you have one as a boss, change is sometimes the only recourse.

 

They are rarely responsive to or capable of genuine friendship, but rather tend to relate best on a power-subordinate level, and in peers prefer more active controls like greed, scheming, and if possible, various forms of blackmail, often financial but sometimes more involved.

 

They do not like the independent minded person or moral personality in the least.  They despise and fear them because they view morality or other limitations as a weakness, and fear them because they do not bend easily to control. Even if loyalty is offered they do not trust it because they do not know what it is.  It is most often about the need for certainty and control on a primitive level.

 

Invariably if you know someone who holds quite a few people in contempt, and not mere dislike, the chances are pretty good that at some point they will hold you in the same contempt as well.  If you wish to know the measure of a person, watch how they treat those who they perceive to be weaker or vulnerable.  Listen to their words, but pay more regard to their actions.

 

And they tend to attract other people with personality disorders into loose groupings that can become self-promotional.   If they ever obtain a significant amount of control of a business, that entity will sooner or later be in serious trouble, often shockingly so.  What were they thinking?  They were well beyond reason, and their morality is largely self-referential.

It is a problem that far too often power attracts those who would abuse it.  And so there is a need for transparency, checks and balances, and rules that limit concentrations of power, both in the corporate and in the political worlds.

All systems that rely on the assumption of a natural rationality and inherent goodness of leaders and key participants are doomed to a tragic failure.  There is strength in diversity, simple because as Lord Acton observed, 'where there are concentrations of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that.'

Gold Daily and Silver Weekly Charts - Post Expiration Gut Check As Expected

We had the expected post option-expiration gut check in the metals, which rallied back into the close.

These jokers are about as subtle as our little girls when they play Monopoly,  and make up their own rules as they go along.

Interestingly enough it appears that JPM is exploring ways to exit the commodities business.  This could be fallout from their recent Enron like energy experience. 

Maybe this is more insulating themselves from the vagaries of the market sort of thing. 

There is intraday commentary about next week's packed macro-economic calendar here.

The reports include an FOMC decision, advance GDP for the second quarter, and a Non-Farm Payrolls Report.

It is funny that President Obama chose this week to kick off his 'don't blame me for the economy' road trip.

See you Sunday evening.

SP 500 and NDX Futures Daily Charts - Another Late Day Stick Save Into the Close

Light volumes and another late afternoon boost in stocks to take them even to green.

It must be summer in New York during the era of perpetual financial corruption.

Next week will be packed with macro-economic news, including an FOMC meeting, 2nd Quarter GDP and all that goes with it, and wrapping up the Non-Farm Payrolls report at the end of the week.

Have a pleasant weekend.

Next Week's US Economic Calendar Is Action Packed

As sparse as this week may have been with regard to macroeconomic events, next week is packed with potentially market moving reports.

The heavy hitters with be the 2Q GDP number, an FOMC rate decision, and the July Non-Farm Payrolls Report.

I do not need to tell regulars at the Café that with this lineup it appears that the precious metals may be running the gauntlet into the August delivery period.

Today it looks like the new futures contract holders with in the money calls from yesterday's COMEX option expiration are getting the 'gut check' that I suggested. Smells like teen spirit. The eligible inventories are scraping the bottom of the barrel. Maybe its time to hit up the ETFs again. But that triggers heavy Asian physical buying. So it becomes a vicious circle. What is a confidence man to do?

If the economic news next week is bad enough, bad may be the new good. I wondered why the erstwhile US President decided to kick off his economic road tour this week.

Gold Daily and Silver Weekly Charts - Here Comes the Judge

There is intraday commentary on the subject of gold backwardation here.

You may read it, but to summarize it in twenty five words or less, 'If the problem is a shortage of physical supply, about the last place you would go to resolve it would be the COMEX futures.'

I also wrote a short piece that in retrospect went three times longer than necessary wherein I talk around some of the goofier comments I have seen about the precious metals markets lately in the mainstream media.

Today was fairly quiet for an option expiration, even with the overnight head fake of a bear raid.  Let's see how the holders of new contracts and short positions fare tomorrow and on Monday. 

Remember that next week begins the August delivery period.

Stand and deliver.
 

SP 500 and NDX Futures Daily Charts - Late Day Stick Save In Light Volumes

All things considered, who is buying this stuff?

Intraday commentary here about the measures that JP Morgan is taking to insulate their Retirement Fund from the 'vagaries of the market.'

"J.P. Morgan Retirement plans to liquidate its entire $2.3 billion hedge fund portfolio, which accounts for about 18% of its $13 billion in assets. The bank's pension is able to make the risk-cutting move. It will also pull back from equities ­because it is that rarest of things: an overfunded pension system, with enough money to cover 117% of its obligations.

Eliminating hedge funds will "immunize" the pension from the vagaries of the market, a source told Hedge Fund Alert.

Is the former head of MF Global still accepting qualified investors for his new hedge fund?

I don't know what it will be called, but I hear its theme song will be Nearer My God to Thee.

Gold Backwardation: When Good People Make Bad Comparisons

You may have heard some talk lately of 'gold backwardation.'

Backwardation is a pricing phenomenon in the futures markets where the price of an asset now is higher relative to the price of that same asset in the future. 

The usual state of most assets is one of contango, where the price increases in the future. This is often due to the time value of money. But let's put that aside for now. Especially in times of ZIRP.

And there is the source of the term backwardation.  The pricing is literally 'backwards.'  I don't remember where the heck contango comes from, and don't care, but that is a shortcut in how I remember the difference between them. 

There are strong indications in the gold market of short term physical supply pressures. Gold Forwards prices are negative, and in a way that we have not seen in some time.   Registered or dealer inventories on the COMEX exchange are at record lows for this leg of the bull market, something that has signaled a change in price trend since the gold bull market began.  Reports of tight supply in the physical markets have been in the news especially in Asia.

The German people asked the NY Federal Reserve for the return of their nation's gold bullion that is being held in custodial trust, and the Fed said 'no can do, Fritz, come back in seven years.'  Are you shitting me?  If that does not get one's attention, you have to wonder what will.

But the fact remains there is not much 'backwardation' on the gold futures market at the COMEX. Below is a chart showing the contract pricing over time. What's up with that?

Furthermore, some astute market observers have pointed to the pricing structure in the oil futures market, and rightfully observed, 'Now THAT's backwardation!'

So what does all this mean?

First of all, one has to look at what is usual and customary for a given market, in addition to making cross market comparisons.

When one is comparing the body fat to weight ratio of a polar bear and a flamingo, for example, one might assume that the polar bear was rather unhealthy since in general too much fat is bad, and the polar bear has quite a bit more than a flamingo. Unless of course if one understands that what is normal for a polar bear may not be normal for a flamingo, because there are some basic structural differences between them.  One always compares a thing to itself, to establish the trend and the norm, in addition to something else, in order to accurately ascertain any changes in condition.

If the gold market ever goes into the type of backwardation shown in that oil chart above, I submit that you will not have look at a chart on the internet to figure out why. You will be more concerned with getting long bread, bullets, and bibles, because the economic system will be going up in the flames of some currency failure, barring some anomalous corner on the market such as we saw in silver with the Hunt Brothers and silver.

And yet with oil in that type of backwardation as we see above, nothing is particularly going on in the world.   One might assume that there is something particular with the oil market that is not indicative of the general economy and money.   Oil, while not perishable, has a cost of storage and delivery relative to the utility of a barrel available for distillation and sale as something else that makes for some natural arbitrage opportunities. Its more complex than that but you get the general idea.

So why are not seeing at least some greater degree of backwardation in gold than we see now, throwing out the awkward comparison with oil which is obviously different in character from precious metals?

Well if the problem is a shortage of supply of physical gold bullion, would one go to the COMEX to get it?  The COMEX is a locus of the supply problems,  being a paper market with record leverage or claims to available supply.  Why would you go to the source of the scarcity in order to relieve it? You would try to get the bullion from someplace else.   Do you go to the desert to find water to relieve a drought?  No, you go to where the water is likely to be found.

The backwardation thing, being specific to the futures paper market, is not all that important for gold, for the reasons cited above.

Thanks especially to Dave of Golden Truth for tracking the gold forwards for us.   I will continue to keep an eye on price and supply, and consider the technicals as they are appropriately applied.   

JP Morgan Retirement Exits Hedge Funds and 'Pulls Back' From Equities

Let's see, JPM's customers have withdrawn most of their gold from the COMEX vaults almost overnight, along with Brinks customers.

And now JPM's Retirement Fund is dropping all exposure to hedge funds and pulling back from equities because they don't need the money.  Apparently return on investment is an outmoded concept.  Especially when you may be in a position to see some formidable vagaries of the market heading in your direction.

Nothing to see here, move along.  All is well.

Curiouser and curiouser. 

Highbridge Owner JPMorgan Chase Cuts Hedge Funds From Pension
Jul 25 2013
9:57am ET

JPMorgan Chase is one of the biggest hedge fund managers in the world, managing billions for pension funds. But its own pension isn't sure the asset class is worth the risk anymore.

J.P. Morgan Retirement plans to liquidate its entire $2.3 billion hedge fund portfolio, which accounts for about 18% of its $13 billion in assets. The bank's pension is able to make the risk-cutting move.  It will also pull back from equities ­because it is that rarest of things: an overfunded pension system, with enough money to cover 117% of its obligations.  (Yes that's right therefore they don't need any returns - Jesse)

Eliminating hedge funds will "immunize" the pension from the vagaries of the market, a source told Hedge Fund Alert...

Read the original at FINalternatives here.

NAV Premiums of Certain Precious Metal Trusts and Funds - Diversity of Judgement

"A wise man proportions his belief to the evidence."

David Hume

And the pedestrian thinker confines themselves to following well worn paths where little that is new can be discovered.

There is a fascinating market structure in gold as you know if you frequent this café, that revolves around the COMEX.

Occasionally I get questions about what some other people are saying about this.  This is apart from what is said on the financial networks, which  far too often is an extended infomercial with the intent to persuade and mislead.

I generally don't like to comment on other people's work, especially when it is just about an opinion.  Opinions can differ greatly and most of the time it is not worth discussing.  I read a piece someone sent me on the COMEX that was filled with lots of facts, but few of them were relevant to the heart of the discussion about the structure of the gold market. 

This is thinking by the regurgitation method.  One learns it in school.  When asked a question, a load of facts are spewed forth on the paper, but there is little of substantial value in that particular collection as it has been arranged.  The facts are like ornaments on a tree, that contribute nothing to the structure that supports a conclusion.

When reading what someone says, one always tries to sort out what is factually based, and what is just opinion, a guess, or just rhetoric. You can evaluate the facts, and the rest is what it is. And yet we keep in mind that much discovery involves the marriage of art with science. It is critical that art does not overshadow reason and obtain sole custody of the children.

Facts matter, and opinions are sometimes what could be called judgement, which everyone exercises since the data does not often present itself so completely in the real world that things become simple and undeniable math.   Judgement is how one bridges the gaps in their data to reach conclusions, which naturally are of varying quality.  One calls them hypotheses until they are proven, or disproven.

Judgement comes with experience, but it is also subject to emotions and idiosyncrasies of the mind.  Managing one's judgement is one of the most critical tasks the advanced investor must endure, as in the case of any advanced thinker in any field.   People are not computers, but living breathing beings of a complex nature and it is rare to find someone who is completely objective, although many would fancy themselves to be. 

I recall reading a nice description of the gold forwards arrangement for example.  After a long exposition which was really quite good and complete, the author concluded by dismissing the entire area as silly and useless because the data was not available to him in exactly the way in which he wanted to have it when compared to other sets of data with which he was more familiar.

If only life were so simple, and so compliant.  Data differs in quality and quantity, always.  Because some data is more complete than other data does not make it superior to other data, especially when the quality of the data can be called into question, and the problem one is approaching is somewhat complex and parts of it are hidden.   Everyone is familiar with the old saying, 'garbage in and garbage out.' 

The sorting and evaluating of data from various sources is the basis of the scientific method, and one examines all the available data, not just that which pleases us the most because it looks nice on paper, but could in fact be wrong.  

And the great trap is to become too familiar with a problem over time, so that one obtains an emotional stake in a particular aspect of the problem.  Then it becomes MY data and approach, versus all others.  This is commonly called 'not invented here' and it is much more common than you might think.  And not just in others, but in ourselves.

Most of the time when people encounter something that differs or varies from what they believe to be true, rather than evaluate that persons facts and sort them, they begin by trying to prove them wrong with any and all means at their disposal, often relying on rhetorical tricks and device.  They are really fooling themselves.  That is why so many of these 'debates' that get staged are diverting, but useless.

At the end of the day, be your own best critic.  That is to say, before you find faults with others, look at yourself, and assess your own work to the highest standards you may obtain.  Look for any flaws in it, and try to knock it down with the same rigor and attention which you might apply to some imagined adversary.

And then you may look with a critical eye at what others present, and take what is solid and worthy, and consider the rest on its own merits, subjecting your own body of thought to the same rigorous scrutiny, always.

This is the answer to why I present my work in public, and take nothing for it.  People ask me about that all the time, why I take no advert money or ask for no donations.  Besides the fact that I do not need them, thanks be to God, the work itself is the reward.  And of course the people one meets when sifting through the stacks in search of hidden gems.  I was an antiquarian bookman for over twenty years as a hobby when traveled the world, and cultivated the habits, pre-Internet, of patient searching through nooks and piles of material, with a patient purposefulness.  Those were good days and charmingly eccentric places and people that seem to be gone forever.  But new days, new challenges, always come.

It is harder to fool yourself when you are forced to put your thoughts down on paper, and to present your reasoning.  It presents an impedance to one's thought that makes it stronger, more robust.   If you have an opinion, label it so.  If you have reached a conclusion, show the facts and your logic. 

And if you have a judgement, that is all well and good, but make sure you understand the risks in your own conclusions and adjust for them accordingly, and be honest in showing them to others.

It has often been shown that collective judgement can frequently be insightful because the idiosyncrasies of individuals are lost in the collation of perspectives.  One of my professors was a pioneer in that field, and his work influenced me greatly. 

That of course presumes that the judgements are all of a certain quality and not merely whimsical opinions.  One of the great faults is to presume that all judgements are of comparable quality.  They are obviously not, despite the notion that each person is entitled to their opinion.

Having said all that, there is certainly something odd going on the gold market.  That is undeniable, and when some dismiss this as conspiracy, well, that is because they have nothing better to say, but it makes them appear to be wise.

I wish I could tell you what will happen with certainty but I cannot.  But I can keep myself informed on the progress of an unusual condition, relying on all the metrics and data at our disposal.  Yes it does vary in completeness, and not all of it is equally relevant.  And as I put it down I look at it from a distance, and see what it has that is sound, and what is not.

And this endeavor is complicated greatly by the undeniable fact that our markets are subject to fraud, and even key metrics have been shown to have been rigged.

Anyone who does not take this into account, who denies this now known fact, which many have asserted for some time based on circumstantial evidence, is not worth the time it takes to read them. 

They are just ostriches with their heads in the sand because it comforts them.  And the best we can do is not join them in this, and to check carefully for the sand in our own eyes, before looking for the sand in the eyes of others. 

Gold Daily and Silver Weekly Charts - Tomorrow Must Be COMEX Options Expiration

"Major Strasser: Are you one of those people who cannot imagine the Germans in their beloved Paris?

Rick: It's not particularly my beloved Paris.

Heinz: Can you imagine us in London?

Rick: When you get there, ask me.

Captain Renault: Hmmh! A diplomat!

Major Strasser: How about New York?

Rick: Well, there are certain sections of New York, Major, that I wouldn't advise you to invade."

Casablanca

Similarly, while there are certain market manipulations that in the short term may appear to be tempting, they may not be advisable given the potential for profound consequences that, while unintended, could prove to be significant.

There was intraday commentary on the slanting W chart formation on the gold chart here.

The action in the precious metals remains labored. The structure of the market is breathtaking.

Tomorrow is option expiration on the COMEX. The following week begins the August delivery period.

I will try to keep you informed as best as I can.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - I Came to Casablanca For the Waters

Light volume trading day with mostly sideways action despite the 'better than expected' new home sales number.

President Obama gave the introductory speech to his new economic vision. It sounded good but many of his visions have turned out to be mirages.

After the bell Facebook and Visa beat their numbers, and Las Vegas Sands missed.

Many of the nouveau tech and financial sector companies use 'conceptual accounting' provided by the misinformation industry.

Have a pleasant evening.

Gold Intraday and the Slanting W Chart Formation

As a reminder, tomorrow is an option expiration for precious metals on the COMEX.  As you may have gathered a pullback today was to be expected given the behaviour of momentum algos and skittish longs.  Tomorrow is another matter depending on how the call and put structure of the options is distributed.

If a large number of calls become converted to active August contracts, then a 'gutcheck' to test the new contract holders on Friday or Monday may be anticipated.  That does not mean that shorting or selling is a sure thing for the momentum speculators.

The delivery period for the August contract begins at the end of next week.  The inventory levels at the COMEX are dangerously thin if a robust delivery mechanism for physical bullion remains functioning.   The word of the gold supply situation has gotten out to the general trading news sources.

A failure of the exchange is almost unthinkable given its consequences and the effects on an already eroded confidence and reputation. 

As we have recently seen, lower prices may have gleaned bullion from the gold ETFs, but it triggered a wave of physical bullion, particularly from Asia, that has placed the exchange systems in London and New York at risk.

I have highlighted the key support levels which will test the slanting W formation on the chart.

What happens will confirm the formation, or not, and help to set a minimum price objective from that formation if it does.

US Healthcare Costs a Global Outlier and Monument to Crony Capitalism

I think the Big Pharma/Health and Big Finance sectors have similar cartel like structures where a few large companies dominate the field, exercising considering political power and the ability to obtain subsidies and protections from the system while fending off regulation and price restraints.

There are others of course, like the energy field from exploration to distribution, often known as Big Oil, but which now includes natural gas and electric energy production and distribution.

The recurring myths of the efficient market and 'free trade' are exacting a heavy toll on the general public and the real economy.  They provide ideological cover to a favored elite that is acting in the manner of a privileged and extractive aristocracy while beguiling many with the allure of easy money.

The concentration of ownership in the media has become an inhibiting and directing influence in public discourse that is hard to miss.

The current recovery fueled corporate perks and ZIRP for the financial sector, a fine example of 'trickle down' economics, will be remembered as one of the great policy errors of modern economic history. They pretend ignorance, they feign helplessness, and they know.  But they are getting paid not to act effectively, and even not to see, but to spin some fantasy.

They 'feel your pain.'  They just do not do anything substantial about it.  Even a second term president can still talk as though he is a recently arrived outsider, critiquing the actions of some predecessor and a corrupt system in which is he barely involved.

These are not leaders.  They are like modern CEO's, professional organizers and managers, who talk a great game about their accomplishments but, when the truth comes out, posture that they stand outside the very system for which they have long held the ultimate responsibility.  

But even worse are those who make little pretense to justice and goodness and moral principle, preferring to appeal to the darkest impulses, the fears and hatreds of a society.  Their actions betray their words.

The lack of serious reform, in large part because of the partnership between Big Money and Washington's new political class, and the dormancy of the progressive impulse, will eventually stress the fabric of society to the limit.  And then change will come.

Read the entire story here.

Gold Daily and Silver Weekly Charts - Thursday Is COMEX Option Expiration

Gold finally broke through its 50 Day Moving Average today and ran a little higher on that momentum.

It is now in what could prove to be heavy resistance between 1340 and 1360.

Silver is not really moving with gold for now. I think gold is being driven by more of a short squeeze that is particular to its own supply issues, as well as a monetary situation that does not affect silver yet as strongly.

As a reminder, Thursday the 25th is precious metals option expiration on the COMEX.

Trading options on the COMEX is trading paper derivatives of paper derivatives of rehypothecated paper assets.   It is such an absurd game that only 'systems players' would stay with it.

SP 500 and NDX Futures Daily Charts

Stocks drifted in lazy trading today with little economic news to drive them either way.

AAPL reports tonight so that will likely move the markets, especially the tech sector.

Palast: Did Fabulous Fabrice Really Cause the Financial Crisis

Here is a reminder from Greg Palast, who is one of those rarest of creatures, the investigative journalist, about what caused the last financial crisis, and the source of the criminogenic environment that is likely to be a major contributing factor to the next.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

"...In August 2007, hot-shot hedge fund manager John Paulson walked into Goldman Sachs with a brilliant plan to cash in on the US housing crisis.

He paid Goldman to announce that Paulson would invest a big hunk of his fund's wealth, $200 million, in securities tied to the US mortgage market’s recovery. A few lucky investors would be allowed to give Goldman their billions to bet with Paulson that Americans would not default on their home mortgages.

It was a con. Secretly, Paulson would bet against the mortgage market, hoping it would collapse – making sure it would collapse. All he needed was Goldman to line up the suckers to put up billions to be his "partners".

It was Goldman’s and Paulson's financial version of Mel Brooks' The Producers, in which a couple of corrupt theatre producers schemed to suck investors into a deliberate flop...

What did the Feds do to Paulson? He received... a special tax break.

Am I defending the Fabulous Fabrice, the French-fried scapegoat? After all, he was just along for the ride. But he was deeply thrilled to carry water for the Bad Boys. And the charges against him are merely "civil", meaning he won't get jail time even if found guilty.

And what about Goldman, whose top brass knew of the entire game? The Securities and Exchange Commission did fine Goldman for its duplicity – a sum equal to 5 percent of the cash Goldman got from the US Treasury in bail-out funds.

After Goldman’s con became public, its CEO, Lloyd Blankfein was hailed as a visionary for offloading mortgage-backed securities before the shit hit the finance fan. Blankfein hailed himself for, he said, "doing God's work". God did well. Blankfein’s bonus in 2007 brought his pay package to $69 million for the year, a Wall Street record.

Rather than prison or penury, Blankfein was appointed advisor to Harvard University’s business and law schools.

So here’s the lesson all Harvard students are taught: If you can't do the time, don't do the crime... unless your booty exceeds a billion."

Read the entire piece by Greg Palast here.

Make no mistake. The world is watching-- with increasing revulsion.

"I believe we have a crisis of values that is extremely deep, because the regulations and the legal structures need reform. But I meet a lot of these people on Wall Street on a regular basis right now. I'm going to put it very bluntly. I regard the moral environment as pathological. And I'm talking about the human interactions that I have. I've not seen anything like this, not felt it so palpably.

These people are out to make billions of dollars, and [think] nothing should stop them from that. They have no responsibility to pay taxes, they have no responsibility to their clients, they have no responsibility to people [or] counterparties in transactions.

They are tough, greedy, aggressive, and feel absolutely out of control, in a quite literal sense. And they have gamed the system to a remarkable extent and they have a docile president, a docile White House and a docile regulatory system that absolutely can't find its voice. It's terrified of these companies.

If you look at the campaign contributions, which I happened to do yesterday for another purpose, the financial markets are the number one campaign contributors in the U.S. system now. We have a corrupt politics to the core, I'm afraid to say... both parties are up to their necks in this.

...But what it's led to is this sense of impunity that is really stunning and you feel it on the individual level right now. And it's very very unhealthy.   I have waited for four years,  five years now,  to see one figure on Wall Street speak in a moral language.

And I've have not seen it once. And that is shocking to me. And if they won't, I've waited for a judge, for our president, for somebody, and it hasn't happened. And by the way it's not going to happen any time soon, it seems."

Jeffrey Sachs