I’ve had an unusually busy day and am only now finishing up my morning reading, 10:00 at night.
Um, the markets have ‘reverted’ back to ‘bargain’ mode after yesterday’s massive sell-off.
Dunno what the US markets will have in store for us by tomorrow’s open but the Asian markets are currently bleeding from the eye-sockets (again) and that usually carries over.
Naturally, we are left to ask what does it all mean? Equity prices have no foundation in reality (yet the corporate owned media insists on equating market performance with economic well-being, regardless of how irrational such comparisons appear to be.
Taking this a step further we find this disturbing debate about the end of quantative easing and the ramifications it holds for the ‘real’ economy.
I believe Mr. Grant scores a major point when he opines that our current capital markets are suffering from a deficit of capitalism!
Or as other pundits have exclaimed, socialism for the rich and (fuck you, pay me) capitalism for the rest of us!
As you know, I think both 'expansionary austerity' and 'stimulative easing' are missing the point and ineffective, because the economic, financial, and global trade system is broken, corrupted, and badly in need of reform and structuring.
What the Fed is doing is keeping the zombie banks upright at the expense of the long suffering middle class and savers. The monied interests are gorging themselves on malinvestment, public policy failures, and a well financed campaign of economic propaganda such as that which led to the tragic lapses of regulation and the overturn of Glass-Steagall.
The effective tax rates of the super wealthy are less than 15 percent, because they draw a major portion of their annual increase in wealth from capital gains and dividends, and unrecognized entitlements. as well as a wide menu of tax avoiding schemes.
And while they moan about the nominal headline tax rates, paid only by the 'little people' even if they do not know they are little, corporations and the truly wealthy have not enjoyed just low effective tax rates in the post WW II era. And yet it is still not enough.
In light of the severe unemployment problems plaguing a large portion of families, austerity seems like a cruel joke, a coup de grâce delivered by the bankers to the income producing classes who depend on labor in the creation and delivery of real products, and not artificial arbitrage and gaming the system.
But on the other hand, stimulus seems just another excuse for the special interests to put on the feedbag once again to the detriment of the many of the next generation. There is no comparison between the Obama Administration and the New Deal in terms of real change and productive innovation.
There has been a very strong recovery in corporate profits in the non-financial sector, and the financiers barely missed a beat in distributing a healthy chunk of GDP to themselves in bonuses, while the ashes of the financial crises which they caused still glowing. And their behaviour in the mortgage and derivatives markets has been despicable. I am appalled that people put up with this sort of thing, much less defend it out of some mistaken belief in neoliberal 'free markets.'
The Automatic Earth is all over the pending Greek default, which highlights the fact that nothing has been done to correct the issues that caused the financial crisis in the first place.
I and others have asked repeatedly the question that is on everybody’s lips, “How much longer can we keep this up?” and the answer, good citizen, is not much longer.
Hard to say which is worse, knowing the system is FUBAR or waiting for it to collapse in a heap?
It’s only a matter of time.
I’m gonna cut this bad boy short cuz I don’t do myself any favors when I draw vivid images of the not too distant future.
Which is to point out that my normally grim outlook hasn’t improved.
Thanks for letting me inside your head,
Gegner
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