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The Fed and its Confidence Game

Investopedia describes the Fed’s mandate as “to promote sustainable growth, high levels of employment, stability of prices to help preserve the purchasing power of the dollar and moderate long-term interest rates.”

After 100 years, it would seem the Fed has the perspective that all of its mandated goals are best served by working towards a single goal: promote confidence. Perhaps at any cost.  Truth, if it is in conflict with confidence, takes a back seat.  Sometimes, it seems, truth is thrown out of the car altogether.  Given the Fed’s exclusive focus on confidence, one facet of which has been its explicit boosting of the stock market (an assertion which has moved beyond conspiracy theory and into the mainstream understanding), how much of what they say is truthworthy?

Does the hope they sell (as confidence) outweigh the truth they suppress?

Is hope devoid of truth less useful?

Is truth that begets hopelessness less useful?

Of the two, assuming mutual exclusivity, which is more important to you?

Is your answer as an individual citizen different than your answer as an individual investor? Which response is more trustworthy?

Reading on the Ponzi: 9/13/13

September 12, 2013 Leave a comment

From The Big Picture, a WSJ info-graphic detailing the SEC’s astonishing lack of prosecutorial vigor.

The Guardian relates a recent account of the U.S. government intervening to have a dissenting blog post from a Johns Hopkins professor taken off-line.  What free speech?

Chris Kimble looks at AAPL’s long term chart wonders whether more downside could be on the way.

A great graphic at Zero Hedge asking, “guess what stabilizing event took place in 1913?”

What does the transition from “protection” to “repression” look like?

The major danger of programs like the NSA’s intrusive surveillance is that it presents those in positions of power and/or authority with the opportunity to abuse their access.  There is always some risk of authority over-stepping its bounds, but by legalizing infringements in particular cases, the “norm” or “anchor” is re-positioned in the public mind.  Since 2001, we as westerners (certainly as Americans) have grown accustomed to invasions of our privacy and come to think of it as par-for-the-course.  What was unthinkable in 1955 (assassinating a U.S. citizen by executive order without trial, for example), has become another ho-hum necessity in the “war on terror.”  But who is terrorized?  Ultimately, i suspect it will be whoever opposing the political establishment.

Enter Glenn Greenwald, the Guardian journalist who revealed Edward Snowden’s evidence to the public and has led the journalistic investigation of the NSA’s surveillance infringements.  The GCHQ, England’s equivalent of the NSA, detained the partner of Glenn Greenwald on Sunday morning and held him for questioning for 9 hours (the maximum allowed without leveling a formal charge).  Greenwald sounded defiant in response to the “intimidation attempt.”  Sadly, this escalation of state abuse is predictable.  What starts as protection “for the people” can all-too-easily result in general repression of political dissent.  And that appears to have been the case on Sunday.  Simon Jenkins commented that the “war on terror” is now “now corrupting every area of democratic government.”  Alan Rudbridger has also written an excellent editorial about the very real danger that state repression poses to journalism.  I am heartened that, despite the fact that there remains stiff resistance to change from the political establishment, at least it feels like winds of change may be rustling a bit.  I love Greenwald’s defiance.  Here’s hoping more people catch on.   Below is a mini-documentary Laura Poitras put together in 2012 featuring William Binney, one of the early NSA whiste-blowers whose calls went unheeded.

Reading on the Ponzi: 8/5/13

Today’s reading is more focused on the Ponzi of Politics than that of finance.

Reuters broke a story today revealing that the DEA was funneling info from NSA databases to help launch their own criminal investigations.

Glenn Greenwald at the Guardian reports that the NSA has repeatedly blocked members of the House of Representatives from gaining access to information, disputing the claim that there is “House oversight” of the NSA program.

The Guardian asks the question I have about the much-publicized U.S. Embassy closings: what the chances this isn’t a prop to drum up support for NSA surveillance?

From the world of finance, John Maudlin asks “Can it get any better than this?”  In other words, how long can the bubble last??

Reading on the Financial Markets: 7/15/13

I have for quite a while been meaning to articulate how I view the U.S. as experiencing not just a financial ponzi, but also a political ponzi (corporate/bureaucratic duopoly), and an ethical ponzi (short-sighted materialism).  But alas, I am too lazy or otherwise occupied to do so.  So I will just keep slipping some of my favorite non-financial ponzi reading into these lists.

Paul Craig Roberts wrote a fiery diatribe on The Burning Platform suggesting that, ultimately, revolution against our well-financed political class is unlikely to succeed by peaceful means alone.

An interesting read from Noahpion on the nature of belief, as applied to economics.

A list within a list.  Here’s a good compilation of articles on government spying from Washingtonsblog.

Charles Hugh Smith discusses an increasing divergence between an overworked private sector and an increasing group of chronically unemployed.  As startling as anything is this chart, as debt-driven growth looks increasingly tapped out:

Reading on the Financial Markets: 6/12/13

On PragCap, Surley Trader suggests the world markets are closely watching (and copying) the Nikkei.  “Yen = Nikkei = expected inflation”, as he puts it.  I couldn’t agree more.

Of much greater interest to me is the Edward Snowden story.  Though it doesn’t tie directly to financial markets, I do see an associative correlation in the idea of central planning.  We see it in the markets and we see it on the societal level – the desire for authority to control that which they can’t.  It’s an urge as old as mankind.

As part of the same over-arching story, Matt Taibbi aptly addresses the Bradley Manning trial, pointing out that “If you can be punished for making public a crime, then the government doing the punishing is itself criminal.”

Charles Hugh Smith’s thoughts on the Surveillance State, as it is.

Here’s the Guardian’s account of how the story of Edward Snowden’s Big Reveal unfolded, along with a video interview.  One of the most influential books on my thinking is the Gulag Archipelago, which I read in my early 20’s.  Snowden’s comments at 7.30-ish are exactly in line with how Stalin oppressed Soviets, and it is the scenario that I believe is so worrisome.

An Election Day Reminder of Where We Gets our Opinions, err “News”

Daily Reading on the Financial Markets: 7/27/12

From Washington’s Blog, it’s not just bankers that should be in jail, but the corrupt element of our government bureaucracy as well.

From GovSlaves, a reminder that the ever-expanding NSA is taking their role as “Big Brother” quite seriously.

This is great.  I’m a little ashamed to not be out doing it myself right now.  Alex Schaefer proposes a peaceful form of civil disobedience: chalking at the TBTF Financial institutions:

Daily Reading on the Financial Markets: 6/14/12

As the market looks green this morning (for now), what could be the cause?  What is the cause for every green day?  QE speculation, of course.  From Bloomberg.

Zero Hedge charts the staggering, growing differential between nominal S&P price and the absolute value of stocks traded over the last few years, as retail has fled.

From The Big Picture, a harrowing tale of corporate interests playing the role of Big Brother.

From TED (who has since refused to publish other speakers on the topic, like Nick Hanauer, due to the risk of appearing partisan in the wake of the Occupy movement), Richard Wilkinson on the dangers – to both the rich and poor – of significant income inequality within a society:

Daily Reading on the Financial Markets: 6/4/12

John Aziz of Azizonomics looks at the ever-expanding ponzi of debt, that has had benefits for both creditors and debtors, and sees its end in sight.

At Minyanville, Peter Tchir makes the case that a Greek exit of the Euro would make Lehman look like child’s play, and thus, “they” will never let it happen.

The Technical Take notes that bullish investor sentiment isn’t indicating capitulation yet.

From Jesse’s Cafe Americain, Chris Hedges on the worst of capitalism, and the “slow motion coup” enacted by corporations in modern American politics.

Jason Haver at Minyanville says only Fed intervention (the only hope left for Bulls) can prevent a protracted Bear slide.

On behalf of “savers” everywhere, a basic reminder from Learn Liberty on why the Fed should keep its hands off Interest Rates and let the market decide:

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