Really kind of astounding, no?
Patrick, Patch, Faulk, Bud, I have all been signaling that a cataclysmic flaw in the system is going to cause a full scale vapor lock of the system, and yet Wall Street's apologists have for years been claiming that there is no there there.
And yet here we are, as the first rumors of some of the largest Wall Street institutions being in truly bad trouble start to surface, and every day brings new news of alarming events in the credit and mortgage markets, and the Wall Street apologists continue to spin their jabbering nonsense in the hopes that someone will be fooled. I wonder how that's working?
Go back to some of the earliest blogs on this site, and note the concern that the large, anonymous pools of money called hedge funds, completely unregulated and unchecked by any constraints, pose a systemic risk to the financial system, due to their tremendous leverage, the larcenous nature of some of the most high profile operators, and good old human nature. Wonder aloud as blog after blog articulates the domino effect of highly leveraged players all running for the exits in an asset class at the same time. Contemplate the argument that the inter-penetration of the prime brokers and their hedge fund clients creates a natural scenario of racketeering-like cartel behavior, where risk is not distributed, but rather concentrated at dangerous levels with just a few of the Wall Street behemoths.
Then read this interview with Gary Aguirre, whose observations as an SEC insider are pretty much identical.
Folks, this is pretty simple. Crooks tend to love the cover of darkness, and the US financial markets act as a comforting, Stygian pool for them to splash about in. The lack of transparency, and complete disregard for investor protection that the markets' regulator displays, virtually assures a catastrophe in the making.
I believe we are now seeing the end stage, as the out-sized bets and contemptuous disregard for risk management come home to roost. I saw a rumor floating around today about a money market fund halting redemptions - think about that. What is the effect on the dollar, whose value is predicated on the notion that our financial markets and economy are stable and responsible, when money markets can't redeem their investors' cash due to liquidity concerns?
Boom. That's what.
Even as the inevitable crisis unfolds, wonks like 'lilGW continue down increasingly bizarre paths, now blaming the advocates of market reform for the SEC's elimination of the uptick rule, one of the few remaining protections from the 1934 Act, designed to curb abusive bear raids by requiring a price test and only allowing a sale on an uptick. The logic is, as we were attempting to cut out one type of cancer, the crooked SEC stripped investors of another protection, thus by not stopping that violation of the public trust, we were to blame. I wonder why the mind-numbingly dim poorly-dyed wonder doesn't also blame us for the resurgence of the Taliban, FEMA's inability to tie its own shoes, and teen pregnancy? Makes about as much sense. That this fecal remnant still commands any interest at all (I occasionally receive his inarticulate gibbering quoted in an email by some well-intentioned soul) is about as surprising as the idea that anyone would pay for as ineffective and incoherent a spokesperson to represent their spin. I mean, even the singing tractor-workers in Soviet era propaganda had a humorous quality - but the jaundiced hackwork of our hero's plodding, if palsied hand, falls flat when compared. The heavy equipment singers have the light touch of angels compared with the clumsy mutterings of our favorite rant-meister.
Anyhow, I'm glad to see that the wig is slipping as obviously as it now is. I repeat my observation - anyone still in the market is asking for their money to be stolen by the criminal syndicates working the system. Plain and simple. You can't do much but buy commodities and hunker down to try to cushion the inevitable collapse of the greenback, but you have to invite the thieves into your house to allow them to steal your savings. Be smart, people. You can see this one coming from a mile away.