Q. Should somebody have gone to jail.
Bernanke: Yeah, yeah I think so. It would have been my preference to have more investigation of individual actions as obviously everything that went wrong, or was illegal, was done by some individial not by an abstract firm.
At the height of the financial crisis, the unprecedented decline in swap rates below Treasury yields was seen as an anomaly. The phenomenon is now widespread, as Bloomberg notes, what Fabozzi's bible of swap-pricing calls a "perversion" is now the rule all the way from 30Y to 2Y maturities. As one analyst notes, historical interpretations of this have been destroyed and if the flip to negative spreads persists, it would signal that its roots are in a combination of regulators’ efforts to head off another financial crisis, China selling pressure (and its impact on repo markets) and "broken" wholesale money-markets.
"When central bankers start talking like FX strategists, it can signal something important"...
With a complex and disaster-prone system of interdependence causing social strife and chaos, why not just simplify everything with a global currency and perhaps even global governance? The elites will squeeze the collapse for all it’s worth if they can, and a Fed rate hike may be exactly what they need to begin the final descent.
Analyst Who Said "Buy Lehman" 20 Days Before Its Collapse Is Now On The Financial Stability Oversight CouncilSubmitted by Tyler Durden on 09/15/2015 13:38 -0400
Seven years ago today, Lehman Brothers failed. But it is what took place just over two weeks prior that is of interest for the scope of this article.
This nation has become a land where character and integrity are secondary to profits for the few and self serving interests of the powerful. And as we are seeing already for the third time in this millennium’s infancy, stability and prosperity can be but short lived for even the highest paid CEO’s in such a world.
It’s all emotional bullshit because what one hardly ever reads about from these Trumpeteer Marionettes is an actual discussion about Trump on the issues. It’s more important to squeeze out yet another orgasmic fountain of joy because he threw out some Univision reporter; “Oh, look! Isn’t zee Donald just Wunderbar!!” Screw that. So, let’s look at what The Donald believes... by his own words.
Are there any conditions now that are actually better than those of 2008? Or are conditions now less resilient, more fragile and more dependent on unprecedented central bank interventions?
Characterizing the upward transfer of virtually all American wealth to a handful of oligarchs a “recovery,” represents a grotesque insult to the english language as well as common sense. The writing was on the wall from the very beginning. We knew as soon as TARP passed that we as society would regret the day we bailed out the bankers who destroyed the world economy. It didn’t take long.
‘My Bailout Is Bigger Than Yours’ – China Is Buying More Time To Buy More Gold Before Joining The SDR-basketSubmitted by Secular Investor on 08/09/2015 07:03 -0400
China: "I wish that I could be like the cool kids. 'Cause all the cool kids, they seem to fit in."
In a murky world of market fantasy, our first guideposts are the fundamentals themselves. Supply and demand can be misrepresented for a time through manipulated statistics, but the tangible effects of decline cannot be. Our secondary guideposts are the paths that internationalists and central banks bulldoze through the fiscal forest. To anyone with any sense, the endgame is clear: Total centralization is the goal, and economic fear is the tool they hope to use to get there. We have written on numerous solutions to this threat in past articles; but the first and most important action is for each of us to acknowledge, wholeheartedly, that the system we know is ending. It is over. What replaces that system will either be up to us or up to them. Only by admitting that there is an end to the fantasy, a painful end, will we then be able to help determine our future reality.
"Public statements, media reports and market data reveal that Beijing unleashed 5 trillion yuan in funds - equivalent to nearly 10 percent of China's GDP in 2014 and greater than the 4 trillion yuan it committed in response to the global financial crisis - to calm a savage share sell-off. Beijing has thus produced the equivalent of around 1 index point gain for every $1 billion committed," Reuters reports.
During the Vietnam War, surveying the shelled wreckage of Ben Tre, an American officer famously remarked, “It became necessary to destroy the town to save it.” His comment came to epitomize the sort of self-defeating “victory” that undoes what it aims to achieve. Last week, China destroyed its stock market in order to save it. Faced with a crash in share prices from a bubble of its own making, the Chinese government intervened ruthlessly, and recklessly, to turn those prices around. Its heavy-handed approach seemed to work, for the moment, but only by severely damaging far more important goals and ambitions.
Greece is saved!!! I mean BANKERS are saved!!! The market will celebrate the total capitulation of Greece to the EU bankers. Nothing has been resolved. The debt won’t be repaid. The can has been kicked again. Portugal, Spain, Italy, Ireland and even France are essentially insolvent. It’s all a ponzi scheme. The bankers win and the people lose. Hope is not a strategy. Hussman’s weekly tome shows how a crisis plays out. Bad shit happens and the powers that be react with bad solutions that keep their wealth and power protected. Their bad solutions lead to a worse crisis. More bad solutions. And so on, until complete collapse.
When Warren Buffet put $5 billion in Berkshire Hathaway funds into Goldman Sachs the week after Lehman failed, amidst total turmoil and panic, it appeared from the outside a high risk bet. Buffet had long tried to portray himself as a folksy engine of traditional stability, investing only in things he could understand, so jumping into a wholesale run of chained liabilities may have seemed more than slightly out of character. We have no particular issue with Buffet making those investments, only the pretense of intentional mysticism that surrounds them. The reason the criticism of crony-capitalism sticks is because this was not Buffet's first intervention to "save" a famed institution on Wall Street. If Buffet's convention is to stick with "things you know" then he has been right there through the whole of the full-scale wholesale/eurodollar revolution.