QUOTES OF THE DAY

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Posted on 16th April 2014 by Administrator in Economy |Politics |Social Issues

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“Let’s keep this straight.  Almost by definition, sociopaths and narcissists really don’t give a fuck what happens as long as they are getting what they want now.  And you wonder why things are as they are?”

Jesse

“Plunderers of the world, when nothing remains on the lands to which they have laid waste by wanton thievery, they search out across the seas. The wealth of another region excites their greed; and if it is weak, their lust for power.

Nothing from the rising to the setting of the sun is enough for them. Among all others only they are compelled to attack the poor as well as the rich. Robbery, rape, and slaughter they falsely call empire; and where they create a desolate wasteland, they call it peace.”

Tacitus, Agricola

Pay and Deregulation in the US Financial Industry

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Posted on 13th April 2014 by Administrator in Economy |Politics |Social Issues

Guest Post by Jesse

“It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud.   The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident.”

Charles H. Ferguson

“Thus did a handful of rapacious citizens come to control all that was worth controlling in America. Thus was the savage and stupid and entirely inappropriate and unnecessary and humorless American class system created. Honest, industrious, peaceful citizens were classed as bloodsuckers, if they asked to be paid a living wage.

And they saw that praise was reserved henceforth for those who devised means of getting paid enormously for committing crimes against which no laws had been passed. Thus the American dream turned belly up, turned green, bobbed to the scummy surface of cupidity unlimited, filled with gas, went bang in the noonday sun.”

Kurt Vonnegut, God Bless You, Mr. Rosewater

“Call me dark, but what I see here is a toxic relationship between deregulation, underpriced risk, and exorbitant, inefficient pay scales that contribute to the growth of inequality, not to mention the shampoo economy (bubble, bust, repeat).”

Jared Bernstein, A Striking Picture of Pay and Deregulation in Finance

A country foolishly deregulates the safeguards created by their forefathers, trusts to the natural goodness of those most hungry for wealth and power, and increases the incentives for enormous wealth by creating loopholes and cutting tax rates, and de-penalizing even the most shocking kinds of white collar crimes.  They recreate the mistakes of history with a wanton disregard for the consequences.

And still they wonder why.  Why do we persecute the poor, and idolize those who would rule us all, without pity or even normal cautions against crises ?  And they say, for God and freedom.

Financial corruption has twisted and perverted public policy, distorted the economy, and polluted the corridors of political and economic power with a flood of easy money.

h/t Jared Bernstein

Related:
A Brilliant Warning On Robert Rubin’s Proposal to Deregulate Banks, circa 1995
Andrew Jackson Day Remembered

ARE YOU A PSYCHOPATH?

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Posted on 8th April 2014 by Administrator in Economy |Politics |Social Issues

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I don’t think I’m a Psychopath, but I certainly recognize dozens in Washington DC and in NYC on Wall Street. There are also hundreds in and around Hollywood California. Not too many in the rural areas in the middle of our fine country. Name someone who fits this description.

Guest Post by Jesse

The Hare Psychopathy Checklist

This is from sources on the web, and is based on Robert Hare’s psychopathy checklist.

1. Look for glib and superficial charm. A psychopath will also put on what professionals refer to as a ‘mask of sanity’ that is likable and pleasant.   It is a thin veneer.

2. Look for a grandiose self perception. Psychopaths will often believe they are smarter or more powerful than they actually are.

3. Watch for a constant need for stimulation. Stillness, quiet and reflection are not things embraced by psychopaths. They need constant entertainment and activity.

4. Determine if there is pathological lying. A psychopath will tell all sorts of lies; little white lies as well as huge stories intended to mislead. Psychopaths are gifted or dull, high functioning or low performing like other people. An untalented psychopath may harm a few; a highly talented psychopath may lay waste to nations. The difference between the psychopath and others lies in their organic lack of conscience and empathy for others. The sociopath is trained to lack empathy and conscience. The psychopath is a natural.

5. Evaluate the level of manipulation. All psychopaths are identified as cunning and able to get people to do things they might not normally do. They can use guilt, force and other methods to manipulate.

6. Look for any feelings of guilt. An absence of any guilt or remorse is a sign of psychopathy.  They will often blame the victim.

7. Consider the level of emotional response a person has. Psychopaths demonstrate shallow emotional reactions to deaths, injuries, trauma or other events that would otherwise cause a deeper response. Other people are satisfaction suppliers, nothing more.

8. Look for a lack of empathy. Psychopaths are callous and have no way of relating to others in non-exploitative ways. They may find a temporary kinship with other psychopaths and sociopaths that is strictly utilitarian and goal-oriented.

9. Psychopaths are often parasitic. They live off other people, emotionally, physically, and financially. Their modus operandi is domination and control.  They will claim to be maligned or misunderstood to gain your sympathy.

10. Look for obsessive risk taking and lack of self-control. The Hare Checklist includes three behavior indicators; poor behavior control, sexual promiscuity, and behavioral problems.

11. Psychopaths have unrealistic goals or none at all for the long term. Either there are no goals at all, or they are unattainable and based on the exaggerated sense of one’s own accomplishments and abilities.

12. Psychopaths will often be shockingly impulsive or irresponsible. Their shamelessness knows no bounds. You will ask, what were they thinking? And the answer was, they weren’t because they did not care.

13. A psychopath will not genuinely accept personal responsibility. A psychopath will never admit to being wrong or owning up to mistakes and errors in judgment, except as part of a manipulative ploy.   They will despise and denigrate their victims once they are done with them.  If they have any regret it is that their source of satisfaction supply has ended and they must seek another.

14. Psychopaths lack long term personal relationships. If there have been many short term marriages, broken friendships, purely transactional relationships, the chances the person is a psychopath increase. Watch especially how they treat other people in weaker positions and even animals.

15. Psychopaths are often versatile in their criminality. Psychopaths are able to get away with a lot, and while they might sometimes get caught, the ability to be flexible and adaptable when committing crimes is indicative.

If you should find yourself in a business or personal relationship with a psychopath, the best advice is seek counseling if you need, obtain assistance if you must, and run if you can. You are a diffused and multi-faceted person with many interests. A psychopath is powerfully focused on obtaining what he wishes from others, without many prohibitions or distractions. Avoidance is the best policy. Long term confinement is their best treatment.

I do not think the repetitive sociopathic behaviours and psychopathic tendencies of the Roman imperial leadership to be accidental. The mad emperors kept recurring because they were the creatures of what that culture had become, and they stood as emblems at its apex.

Men are social animals, and can go mad in groups, as well as alone. Psychopathy can be the black hole at the center of a whole galaxy of madness and sociopathy under the right conditions, and the results can be flamboyantly destructive, as we most recently saw in several places during the 20th century.  The psychopaths can thrive anywhere that deception is an advantage, but their prime hunting ground is a system in crisis, a controllable chaos lacking a well defined rule of law.

Moral Blindness Syndrome (MBS) – When Money and Confidence Dies It Will Be Televised

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Posted on 2nd April 2014 by Administrator in Economy |Politics |Social Issues

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Guest Post by Jesse

“It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud.

The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident.”

Charles H. Ferguson

It is interesting to see the reaction that Michael Lewis has made with his new book, Flash Boys.

The furor is in large part over a quotable quote that is attributed to the book’s major protagonist, ‘the stock market is rigged.’

I am not going to get into the deficiencies of the book’s moral argument, and the spin that is being put on this problem. It has finally become ‘a problem’ because the cheating that was going on started to visibly hurt the wrong people: the rich and well connected.

To that extent, it is quite similar to the market manipulation that was known as ‘the London Whale’ in which trading companies complained that JPM was dislocating the market, and screwing with their profit stream, with the company’s antics.

I did that yesterday, 60 Minutes Sanitizes Its Report – What Banks, What Exchanges?

What is fascinating now is watching the reaction that people are exhibiting to the book and its assertion of market manipulation, with quite easily understood evidence in support of it I might add.

Yesterday there was an argument on one financial television show that literally stopped the Madame Tussauds wax museum-like trading on the floor of the NYSE. The reaction of the apologist for the status quo of systemic skimming, or front running as you prefer, was apoplectic with his reaction to this scheme being unmasked. It called to mind Victor Hugo’s observation that ‘frightened hypocrisy hastens to defend itself.’

This morning on another financial network, more directly beholden by Wall Street interests, Michael Lewis was interviewed, and it was the turn of the anchorpersons themselves to roll out the indignation on behalf of the industry that cuts their paychecks, and variously attack and parse the offending statement, ‘the market is rigged.’   They had a go at it, and then changed the subject.

But the same anchorperson who compared Wall Street traders to children, who cannot help themselves except to try and break mom’s rules, took a different tack this morning.  Today we heard that Wall Street traders have no moral imperative, no operative sense of right and wrong.   That is, their only task is to make money in whatever way that is possible, even if it means cheating, lying, and even creating false opportunities to defraud other people.

A good trader suppresses any sense of morality and law, except as an obstacle to be overcome.  When they cheat and steal it is the fault of the regulators, because they are not smart enough and fast enough to stop them.   And these are the same people that we claim should therefore be self-regulating.

But the most shocking thing was that Michael Lewis agreed.

“I don’t regard high-frequency traders as villains.   It is like blaming the lion for eating the antelope. They are wired that way. I think the system is screwed up to exploit opportunities, exploit glitches in the system. They’re not wired to say that this is moral or immoral; they aren’t wired to say is this good for the world. They don’t think that way.”

Ah the noble lions. Or perhaps more appropriately jackals, based on how they feed in the dark on the weak.  Remember this the next time someone asks a financier for their recommendations on public policy and first principle social issues.

The irony of course is that this description is that of functional sociopaths at best, psychopaths at worst.  They are ‘wired’ to seek self-gratification without regard to moral considerations, conscience, or consequences.

Rather than just saying the market is rigged, the anchors and  Michael Lewis agree that the market is now founded on sociopathic behaviour, whose primary directive is to game the system and defraud the other market participants in the most clever ways that they can.  Not by producing anything, not by contributing anything real to society, but by being very successful conmen. And all the parties nodded their heads in agreement.

Psychopathy is a medical condition, whereas sociopathy is a learned behavior that is often environmentally born.  And it is therefore contagious.  Psychopaths just have a natural advantage
if they have no conscience or empathy to suppress.   Willful moral blindness for selfish ends is an acquired skill, and the domain of the sociopath.

What a hell of a way to set up a critical social system, to seek out and incent sociopathic behavior.

Whenever you hear this sort of rationalizing about the profit imperative alone, it is often said about Wall Street traders and their special status in finance. But take the same scenarios, the same moral principles, and apply them to some other professions. What if this principle was the basis of the medical profession, or the food industry, or retail stores?

Yes, doctors will always find some way around the regulations in order to falsely charge and do harm to their patients, mostly without killing them outright to their credit, as long as they can make money at it which is their primary objective. And that is the system we have set up, and there are few consequences against it.

Gas stations will always find some way to cheat their customers by short changing them and faking repairs, because their purpose is to make money any way that they can, and it is our fault for not stopping them.  If we catch them, they receive a token fine as a cost of doing business.

They will say that we need to teach the public to be better judges of mechanical repair issues.  It is not the mechanics fault. It is just how they are and what they do.   And you can apply that rationalizatin to any number of professions, from plumbers to electricians to zoo keepers to Congressmen.

The moral blindness of those caught up in this culture of deceit is appalling.  The notions they hold would never be tolerated in any other undertaking. But financial crime pays, and the tricks and abuses they perpetrate are less obvious in their effects than a dead child or a woman made blind through quackery.  But they do have effects, and they are killing us.

The purpose of the stock market is to encourage investment and the efficient allocation of capital in productive activities.   But tiers of complexity are added to hide and deceive investors, by cadres of admittedly very smart people who not only perform no useful function, but who in any other industry would be shunned.

This moral blindness is tolerated because there is very big money involved, and the potential for very negative career consequences.  As they say, it is the bribe or the bullet.   It is easy to excuse because it involves ‘white collar’ crimes that engage wide swaths of the most influential voices in our society.

They retreat into blaming the victims, silencing the critics, repressing even peaceful protests, praising their own exceptionalism, and coercing the outliers, others, and dissidents.   The system is the lie, and so the lie must be protected for the sake of the system.

I wonder if there is a need to have news people, and economists, and politicians to take some basic courses in ethical behavior. They are certainly doing a wonderful job of suppressing their moral sensibilities when it comes to financial fraud, even if the laws do not overtly define and indict these abuses as ‘crimes.’

And when someone points out the hypocrisy and fraud, they first ignore them, and then panic and attack. How dare they undermine the confidence of the system!   For they have become creatures of the system, and that is a big part of the problem in the credibility trap.

They do not get it. They are suffering from a severe case of moral blindness as described by Upton Sinclair when he said, ‘It is hard to get a man to see something when his paycheck depends on his not seeing it.’

And the example they give as public figures, from Wall Street to the Beltway, is rotting the future of our country, down to the bone.

The cure for this is relatively straightforward if you understand the problem as one of pervasive corruption. We are in a state of serious moral hazard, in which crime pays.  It really is no different from other situations where whole towns and areas can be undermined by gangsters and graft.

You start with the law, and put some heft behind it.  You stop giving the powerful and the well-connected a pass on fraud, or just wristslap fines.   You put the right people in regulatory positions, and enough of them, and back them especially when they go up against the major syndicates. You put the message out, and then make it stick. How did Roosevelt clean up the financial industry after the 1920′s?

It won’t be easy, because so many have been caught in the credibility trap.  We need to find our best, who have a strong moral sense and public spirit, and then give them whatever support and encouragement that they need. If we are not doing that, and we are not, then we need to find out why and fix it. That will take leadership. And since greed and fear have so many in their grip, our short term problem is that we do not have any.

“Capitalism is at risk of failing today not because we are running out of innovations, or because markets are failing to inspire private actions, but because we’ve lost sight of the operational failings of unfettered gluttony.

We are neglecting a torrent of market failures in infrastructure, finance, and the environment. We are turning our backs on a grotesque worsening of income inequality and willfully continuing to slash social benefits.

We are destroying the Earth as if we are indeed the last generation.”

Jeffrey Sachs, Self-interest, without morals, leads to capitalism’s self-destruction

The world sees this, even if they people of the US and UK themselves don’t. The world is watching, and there will be consequences. Money and confidence will die first on the periphery, and then the deluge may come.

Robert Hare: What a Psychopathic Corporation Might Be Like

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Posted on 1st April 2014 by Administrator in Economy |Politics |Social Issues

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Guest Post by Jesse

Dr. Robert Hare is describing what a psychopathic corporate culture might be like, not what all corporations are.

Corporations can have personalities if you will, based on the character of their leadership, and the traits and tendencies which they tend to seek out and reward.

Governments may have the same character traits, whether they choose to call it culture, or tone, or philosophy. Certain behaviours are rewarded, and others are suppressed and discouraged.  Quite often a few like-minded and powerful personalities may set the character of the organization, and choose subordinates who are either servile or of a simple mind.

Otherwise corporations are not people, and do not deserve the rights of people because it grants to the corporation mangers a power that makes most other individuals unequal under the law.  It is an extension of power and rights by proxy, greatly leveraged.

If an individual has a voice, the individual managers of a major corporation can obtain a much greater voice, one applied by the power and money of a large organization.  These are the modern übermenschen that we are unwittingly raising like titans over the world of real people.

And when they are singularly amoral, or focused for anti-social purposes, or criminal activities, the resultant damage of which they are capable can be devastating, not only to individuals, but even to towns, cities, and small nations.

A CRITICAL JUNCTURE IN WORLD ECONOMIC HISTORY

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Posted on 27th March 2014 by Administrator in Economy |Politics |Social Issues

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Guest post by Jesse

 

 

Currency Wars: The Plot Thickens

“International discord over Ukraine does not bode well for the settlement of differences over the IMF’s future. Though the G7 is excluding Russia from its number, in retaliation for its action in Crimea, this does not amount to isolating Russia. There has been no suggestion that Russia be excluded from the G20.

The USA and its allies have suspected that several other G20 members would not stand for it. This suspicion was confirmed yesterday when the BRICS foreign ministers, assembled at the international conference in The Hague, issued a statement condemning ‘the escalation of hostile language, sanctions and counter-sanctions’. They affirmed that the custodianship of the G20 belongs to all member-states equally and no one member-state can unilaterally determine its nature and character. In short, their statement read like a manifesto for a pluralist world in which no one nation, bloc or set of values would predominate…

It now seems unlikely that the USA will complete (or, indeed, begin) legislative action on the IMF reform by the 10 April deadline the BRICS have set. The odds are moving in favour of a showdown at the G20 finance ministers’ and central bank governors’ meeting due in Washington on that date…

Beijing leaders have long dreamt of displacing, or at least dethroning, the US dollar from its reserve currency role. US dominance of the IMF is one of several effective bars to the achievement of such a goal. The kind of action Russia is advocating, the BRICS wresting control of the IMF in despite of US veto power, might have some appeal.

That would mark the end of the unified global monetary system that has developed since the IMF was founded in 1945, to be replaced by a bloc of fiat currencies in the developed countries and a system in the emerging sector where currencies were linked to drawing rights in some new international fund, possibly with some material backing. (gold, silver, and possibly commodities – Jesse)

It seems unlikely that convertibility between these monetary systems could be maintained for long. Consequently, the 10 April meeting is shaping up as a potentially critical juncture in world economic history.”

Paul Mylchreest, A Critical Juncture

Paul Mylchreest published this essay over at ZeroHedge this evening, and it is worth a read, as Paul is connecting some fairly important dots for us. I doubt that many traders will really understand the implications of what he is saying, without even having read the comments. Good traders often take a highly focused, very detailed, but narrow and short term view of things, and this is both their strength and their weakness. It deserves a broader stage, but it is unlikely to get it when the major media remains willfully blind.

I had not thought of a dual system previously, in which the Anglo-Americans and their allied states decide to go in one direction, maintaining their hegemony around the dollar and the euro, and the rest of the world going in another. It would be inherently unstable, and throw the global credit and forex markets into a somewhat chaotic state. But then again, who could have predicted the folly of a loosely associated set of nations adopting a single currency without the rigor of monetary transfers and fiscal union with which to balance the system.

This is not likely to be a singular event, but part of an evolutionary change in the makeup of the international monetary system that has been developing for years. At some point things will begin moving more quickly, and change may come in an avalanche of events that will leave most analysts gaping in disbelief.

When do you think the American Revolution began, on 4 July 1776? Such great turns in human events happen over long periods of time. But, in retrospect, there are always critical junctures in the process of change, with hard positions taken, and opportunities for peaceful evolution lost.

“All successful revolutions are the kicking in of a rotten door.”

John Kenneth Galbraith

And since the grand failure of the Soviet state, nothing has grown more corrupt and self-serving than the ring of corporations and crony capitalists that have become the post Bretton Woods banking cartel. It has begun to consume itself, and to kill its own. The economic hitmen have finally come home.

But predicting ‘when’ is difficult in matters such as this. What starts the avalanche, what sound triggers the slide, which snowflake proves to be too much? When is enough wealth and power— enough?

Certainly the events in the Ukraine are difficult to understand without a broader geo-political and economic context, except in the most facile and jingoist of caricatures of different perspectives. They are barbarians, and hate us for our freedom, the wonders of our financial engineering, and the beauty of our culture. We are the liberators. We bring loans and economic progress. We come in peace. Look on our works, ye mighty, and despair.

“Although U.S. Navy and Marine forces generally operate on a regular cycle of deployments to European waters, they rely on a network of permanent bases in the region, especially in the Mediterranean. These should be retained, and consideration given to establishing a more robust presence in the Black Sea. As NATO expands and the pattern of U.S. military operations in Europe continues to shift to the south and east, U.S. naval presence in the Black Sea is sure to increase.” Project For the New American Century, 2000

We are not the makers of history. We are not gods. We are not even the sovereigns of our own passions and delusions and fears.

We who forget history are its victims.

The Emperor is not naked. The Emperor is barking mad.

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Posted on 20th March 2014 by Administrator in Economy |Politics |Social Issues

Via Jesse’s Cafe Americain

 

 

 

 

QUOTE OF THE DAY

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Posted on 14th March 2014 by Administrator in Economy |Politics |Social Issues

“He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods. Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his.”