Thomas Frank: One Market Under God-- Extreme Capitalism

"There is a lack of critical assessment of the past. But you have to understand that the current ruling elite is actually the old ruling elite. So they are incapable of a self-critical approach to the past."

Ryszard Kapuscinski

But they maintain a firm grasp on information and power, for their own sake, and sidetrack and stifle any meaningful reform.

In October 2000 Thomas Frank published a prescient critical social analysis titled, One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy.

In the video below from 2015, Thomas Frank looks back over the past 15 years to when he wrote this insightful book, and ends with this observation.

"I want to end with the idea that the market is capable of resolving all of our social conflict, fairly and justly.  That is the great idea of the 1990's.  And we all know now what a crock that is.  I think what we need in order to restore some kind of sense of fairness is not the final triumph of markets over the body and soul of humanity, but something that confronts markets,  and that refuses to think of itself as a brand."

The book was not received well at the time in the waning days of the Clinton revolution and the birth of the era of the neo-cons in foreign policy and neo-liberals in economics.

This religion of the markets had yet to suffer the serial failures and decimation of the real economy which it would see over the next sixteen years.

This is an ideology, a mindset, and as Frank calls it a religion, of taking market capitalism to such an extreme that it dispenses with the notion of restraints by human or policy consideration.   It comes to consider the market as a god, with its orthodoxy crafted in think tanks, its temples in the exchanges and the banks, and its oracles on their media and the academy.

This extreme form of market capitalism, also called neo-liberalism in economics and neo-conservatism in foreign policy,  has worked its way into the mindset of the ruling elites of many of the developed nations,  and has taken a place in the public consciousness through steady repetition.  I has become the modern orthodoxy of the fortunate few, who have been initiated into its rites, and served and been blessed by their god.

It is the taking of an idea, of a way of looking at things, that may be substantially practical when used as a tool to help to achieve certain outcomes, and placing it in such an extreme and inappropriate place as an end in itself, as the very definition and arbiter of what is good and what is not, that it becomes a kind of anti-human force that is itself considered beyond all good and evil, like a natural law.

It is born of and brings with it an extreme tendency that kills thought, and stifles the ability to make distinctions between things. If not unfettered capitalism then what, communism? The adherents become blind by their devotion to their gods.

This is not something new.  It is a madness that has appeared again and again throughout history in the form of Mammon, the golden idol of the markets.  It is a way of looking at people and the world that is as old as Babylon, and as evil as sin.

Without Empathy or Remorse: The Psychopath Next Door, In the Office, In the Halls of Power

"What is good? All that enhances the feeling of power, the will to power, and the power itself in man. What is bad? All that proceeds from weakness. What is happiness? The feeling that power is increasing— that resistance has been overcome.

Not contentment, but more power; not peace at any price, but war; not virtue, but competence. The first principle of our humanism is that the weak and the failures shall perish. And they ought to be helped to perish."

Friedrich Nietzsche

There is a range in human behaviours. There may be a baseline, but not all are the same.

And this is why theories that assume that everyone has a basic world outlook that is the same like you, that all people have a natural desire to be friendly, helpful, and sharing falter out of either a good nature or from a good maximizing, selflessly reasoning behaviour, falter so badly when applied to the real world.

When a society fails to restrain the worst behaviours of those who prey on others through the abuse of power or money, their example brings out the worst in a much larger subset of the population. Bad behaviour breeds bad behaviour, and those who profit by it find ways to justify this through self-serving social and political theories.  People who have this weakness in their character are naturally attracted to high profile positions of power.  Psychopaths breed and nurture sociopaths, imitators who are able to extinguish their own empathy and remorse through ideology and excess.

What would you do to protect your children from people like this? Throughout history people have banded together in order to establish and maintain the rule of law against the tyranny of a few.

This is why romantic notions about markets and societies without law and transparent regulation are so harmful. They turn the power of the markets and the laws over to the least scrupulous and self-controlled in a society. This is why any social system without checks and balances, without transparency and restraints, will eventually deteriorate into a dysfunctional system of self-interest and looting.

People are not perfectly rational angels. It is hard to believe that one must say that to an adult audience, but ideology and conditioning can make people blind to their own faults. 'Men go mad in herds, but come back to their senses, one at a time.'

Society is generally based on consumption,  production, and cooperation.  A system that has become tainted by the sickness of the disordered mind and soul is based on debt, coercion and extraction, serving only money, power, and itself.

What then are we to do?

Do not spend your time trying to look into the minds and hearts of others at a distance, saying this one or that one is clearly disordered and evil, calling them out for it. Rather, look first into your own imperfectly human heart, and find the fear, selfishness, envy and greed within.

And with open eyes, having seen this inhuman behaviour for what it is, acknowledge it, bring it under your control, subdue it and extinguish it by having remorse for past wrongs, and a sincere desire to act up to your light, more fully and wholly human, in the future.

Put more simply in the words that echo down the long halls of history, see your sins, acknowledge them, repent and ask for forgiveness, ask for the strength to act up to your light, and then go and sin no more. For if the seeds of wickedness and inhuman behaviour are stilled within you, then the madness that roams the world like a roaring lion will not find a way to steal your humanity and your heart.

And that time is coming, always and again.

Gold Daily and Silver Weekly Charts - Not Too Obvious - The Devil's Tower

Today's intraday gold chart looks like the Devil's Tower mountain in Close Encounters of the Third Kind.

So up they went into the NY trade, and down they came after Europe and Asia went to bed.

There was quite a bit of delivery action yesterday in gold, if delivering claim tickets for bullion of a less than transparent pedigree counts. And as usual there was little to no action with the physical bullion in the warehouses.

Silver had no deliveries reported, but enough movement in the warehouses to warrant a look.

There was intraday commentary on the warnings that Pam Martens had given to the Fed and the Administration in 1998 about the repeal of Glass-Steagall and the proliferation of dangerously leveraged derivatives bets. And guess what, we are right back there again, with many of the same faces saying the same things in different ways.

I hope today's affirmation of the supremacy of leveraged financial paper bolstered your confidence in the wisdom of our ruling elite.

But not one thing has changed on the charts.  They are still coiling, and as Pam Martens observes, I think there is trouble behind the scenery with one or more of the Banks.

We had the results of the queen's full body neck to legs cat scan today, and it was 'perfect.' After such a tough year so far it is nice to get some unexpected good news. And so we celebrated with a brief but rather indulgent visit, by our standards, to a favorite bakery called Natale's.

We might even brave the heat and humidity to visit another favorite, Cacao Market by MarieBelle, in Williamsburg Brooklyn.  They say that its layout drew its inspiration from the shop in the movie Chocolat.

 I am not so much of a candy person, but the queen has an affinity for chocolate, especially dark chocolate truffles.  And theirs are exceptional says she, having had the opportunity to sample some of the best across Europe over the years.  So who am I to question her expertise in all things chocolate?  lol

It's the little things that make life worth living, especially His tender mercies, coming slowly over the horizon like welcoming lights in the darkness, reassuring us, and marking our way safely home.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Stocks Close Unchanged, Feeling Confident?

The Street shook off some fairly lousy economic results from this morning, and managed to turn the losses to largely unchanged to a little green by the afternoon, when Asia and Europe had gone home to bed.

Stocks are still struggling here, trying to find a rationale for moving even higher than they are now.

It's not clear that they will find that, but with the Fed et al providing plenty of liquidity and outright purchases in come cases, and with the regulators turning a blind eye to the 'cup of courage' that the algos are dishing out to the banner headline indices on an almost daily basis, there is no telling where the equity markets may go.

In the end it will turn out badly, as it has done so twice now since the turn of the century. But that is a concern for another day, and for other people to clean up once the bonuses are banked, mostly offshore.

Have a pleasant weekend.

Pam Martens' Warning to the Fed and the Clintons in 1998 - And She Warns Them Again Now

It is the same players that we saw enabling reckless behaviour in 1998: Citigroup, the Fed, and the Clinton-led Wall Street Democrats.

And here we are again, almost eighteen years later, watching the same short term, selfish behaviour by the big money banks putting the entire economy of productive individuals at risk again.

"There’s something big and scary going on behind the scenes but, as usual, the public isn’t reading about it on the front pages of the newspapers...

Dodd-Frank was supposed to push the derivatives out of the commercial banks which hold the insured deposits to prevent another taxpayer bailout, the so-called “push out” rule. But in December of 2014, Citigroup was able to sneak legislation into the must-pass spending bill to keep the government running that overturned the push-out rule...

Using its insured bank’s balance sheet as ballast, Citigroup’s bank holding company now ranks as the largest holder of all derivatives in the U.S. According to the Comptroller of the Currency, the very bank that blew itself up in 2008 and received the largest taxpayer bailout in history, now holds $55 trillion in notional amount of derivatives.

But far more alarming is the type of derivatives Citigroup appears hell bent on gaining market share in trading. Last week we reported that Citigroup is plowing into credit default swaps, the very derivatives that blew up the big insurance company, AIG, in 2008 and forced a government bailout of AIG to the tune of $185 billion...

On March 8 of this year [2016], the Office of Financial Research, which was created under the Dodd-Frank legislation to monitor the buildup of systemic financial risks, released a study on Credit Default Swaps. Its findings were deeply troubling...”

You may read the entire article at Wall Street On Parade.

Gold Daily and Silver Weekly Charts - Late Day Selloff - Risk On But Stronger Dollar

Apparently the Street is looking for a good Retail Sales number tomorrow because it will include Amazon's 'Prime Day' promotion.

Gold and silver were hit by some selling later in the day on apparent dollar strength and a risk on attitude in the equities.

PPI and retail sales results tomorrow.

The Reserve Bank of NZ cut its key rate by 25 bp to 2%.

Singapore has cut the high end of its 2016 GDP forecast.

The Reserve Bank of Australia may be cutting its key rate to 1% over the next 12 months, and will be considering 'unconventional stimulus' to counteract a lagging economy.

Print on.

Have a pleasant evening.