"I write to you from a disgraced profession. Economic theory, as widely taught since the 1980s, failed miserably to understand the forces behind the financial crisis. Concepts including 'rational expectations,' 'market discipline,' and the 'efficient markets hypothesis' led economists to argue that speculation would stabilize prices, that sellers would act to protect their reputations, that
caveat emptor could be relied on, and that widespread fraud therefore could not occur. Not all economists believed this – but most did.
Control frauds always fail in the end. But the failure of the firm does not mean the fraud fails: the perpetrators often walk away rich. At some point, this requires subverting, suborning or defeating the law. This is where crime and politics intersect. At its heart, therefore, the financial crisis was a breakdown in the rule of law in America.
In this situation, let me suggest, the country faces an existential threat. Either the legal system must do its work. Or the market system cannot be restored."
James K. Galbraith, May 16, 2010
"They [moneyed interests] are ruthlessly going forward to eliminate land, labour, entrepreneurial-managerial skills, and everything else the economists once told us were the chief elements of production. The only element of production they are concerned with is the one they can control: capital."
Carroll Quigley, The State of the Individual
“The fine thing about pacts with the devil is that when you sign them you are well aware of their conditions. Otherwise, why would you be recompensed with hell?”
Umberto Eco, The Name of the Rose
Stocks were mixed again, with the SP500 moving higher, and the tech heavy NDX continuing to move lower.
The Dollar fell slightly, giving back the 93 handle.
Gold and silver rebounded sharply from the recent overnight assault on the integrity of the precious metals futures markets.
The stock market is in an obvious bubble, to be followed once again by a crisis and collapse.
If it not so much if but when.
And no one could have seen it coming.
Have a pleasant evening.
