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Perhaps the only question we have after seeing the attached table, which shows that as of Q3, 2013 JPMorgan owned $65.4 billion, or just over 60% of the total notional ($108.2 billion) of all gold derivatives in the US, is whether the CFTC will pull the “our budget was too small” excuse to justify why it allowed Jamie Dimon to ignore any and all position limits and corner the gold market?
And purely as a reference point, the chart below compares the total value of gold held in JPM’s vault (registered and eligible) as of Friday’s closing price with its reported gold derivative notional holdings.
Finally, for the purists out there, we realize that gross is not net… until there is a breach in the derivative counterparty collateral chain, and gross becomes net.
There has been a great deal of absurd, and often malicious comment about disparity of income and wealth in American society and in the West generally. It is a legitimate question of whether the head of a company should earn 500 times as much as the most junior employee, and of why such wealth is concentrated in so few hands, although the wealthy do, as a group, pay their share and more of income taxes, contrary to a lot of political myth-making.
And there has been much comment, some of it very unfair, about individual financiers and industrialists. Nothing is easier in difficult economic times than to scapegoat the financially successful, especially if they live conspicuously well and are frequently publicized. There is no doubt that Jamie Dimon has had a successful career boot-strapping himself up through mergers and job-changes from bank to bank until he personifies the folkloric legacy of two of the greatest names in the history of Western finance as chief executive of J.P. Morgan Chase.
J. Pierpont Morgan was the founder of modern merchant and investment banking and exercised an influence over the financial communities of London and New York that probably exceeded any such status held by anyone since Julius Caesar’s wealthy friend Crassus, (who owned the Roman fire department, and went around igniting fires and extorting for the services of the firefighters). Mr. Morgan famously advised President Theodore Roosevelt to “have your man meet my man” and they would work out any problems.
Morgan’s influence steadied nerves in the Panic of 1906, when the Dow-Jones Industrial Average descended to eight, which is now at 16,000. He controlled the White Star Line, which owned the great ocean liner Titanic, but the disaster that befell that ship was never linked to Morgan.
Salmon P. Chase was the leader of the new Republican Party in Ohio, ran third to Abraham Lincoln and William H. Seward at the Republican presidential nominating convention in 1860, and served with distinction as secretary of the Treasury in Lincoln’s administration during the Civil War, until Lincoln elevated him to be chief justice of the United States.
Jamie Dimon is not as prominent as Morgan or Chase but has been the leading American lending banker for the last decade, and brought his bank through the 2008 crisis with comparative distinction. Yet there is something incongruous and something irritating about his ostentatious groupie’s adulation of President Obama, illustrated by a full, Dimon family three-day attendance at the first Obama inauguration, followed by a sequence of official policies Dimon and his fellow bankers disapproved, and by $20 billion in fines and legal charges assessed against J.P. Morgan Chase because of Dimon’s aggressive management, some of it to please the U.S. Treasury.
And there is also an annoying aspect to his quick salarial rebound from his own management errors and those of some of his senior officers which led to over six billion in losses in a series of trading fiascos. His directors held Dimon responsible for that debacle, and he took almost a 50 per cent pay-cut last year, but almost all of it was restored this year, to give him a pay packet of $20 million for the year. The orchestration of the performing directors and the inevitable and ubiquitous Warren Buffett warbling to shareholders and the financial press that Dimon would be a bargain at twice the price may be true, but it is so contrived and sanctimonious, it is still annoying.
It is not, however, sufficiently irritating to push a reasonable person into the camp of Mr. Dimon’s vocal critics, some of the institutional investors and unions, who carp and whine at a less bald pretext than a drop of the hat, and masquerade as shareholding democrats with the savings of others. They have been demanding that Dimon separate his position as CEO from being chairman, and abandon the latter post. This is a red herring.
Jamie Dimon got where he is by merit and there is nothing to be gained in inflicting such window-dressing restrictions to his position. If he retains the confidence of competent and responsible directors to run the bank, nibbling and chiselling at his position will not accomplish anything and minimal attention should be paid to the posturers and meddlers among institutional investors, who almost never have enough executive aptitude or judgment to run a two-car funeral.
As for the unions, they are a medieval retardation of the American economy and one of the more egregious of the Obama administration’s many failings is that it effectively handed the automobile industry which the United Auto Workers, admittedly with the full complicity of incompetent management, drove into insolvency, to the unions, over the financial corpse of the bondholders and shareholders. (I had been a shareholder of General Motors since I was eight years old and I did not even get a notice that my three shares were now worthless and had been cancelled.)
While I am recounting personal grievances, an account of our company that was in perfectly good order was abruptly cancelled and the loan called on Dimon’s instructions when he was head of Bank One in Chicago in 2001. It had nothing to do with the quality of the loan, only that he decided to discontinue that kind of loan (a form of swap); we had no difficulty replacing Bank One and the loan was paid in full on schedule the following year. Dimon’s abruptness could be taken as dynamic execution by some, but in a service industry, it was just hip-shooting of a gratuitously rude kind. He was a shoulders-and-elbows self-promoter for some time after he should have outgrown such affectations.
Having got that off my chest, I would defend Dimon against his critics now, but if he wants a pay-raise, he should not organize a political campaign and enlist an old hoofer like Buffett, who is now a self-proclaimed expert on more subjects than Mark Twain. We all make mistakes and in a big bank they can be costly; the ranks of those with buyer’s remorse over Obama are deep.
But there is a quality about Dimon that appears to be clinging to his earlier fluffed-up reputation as a miracle worker. He’s not an impresario or a politician; could he act more like a meat and potatoes banker? The country needs them. It doesn’t need prima donnas trying to do a star turn over a 74 per cent pay increase after presiding so recently over a $26 billion bloodbath for his shareholders.
“I was part of that strange race of people aptly described as spending their lives doing things they detest, to make money they don’t want, to buy things they don’t need, to impress people they don’t like.” ― Emile Gauvreau
If ever a chart provided unequivocal proof the economic recovery storyline is a fraud, the one below is the smoking gun. November and December retail sales account for 20% to 40% of annual retail sales for most retailers. The number of visits to retail stores has plummeted by 50% since 2010. Please note this was during a supposed economic recovery. Also note consumer spending accounts for 70% of GDP. Also note credit card debt outstanding is 7% lower than its level in 2010 and 16% below its peak in 2008. Retailers like J.C. Penney, Best Buy, Sears, Radio Shack and Barnes & Noble continue to report appalling sales and profit results, along with listings of store closings. Even the heavyweights like Wal-Mart and Target continue to report negative comp store sales. How can the government and mainstream media be reporting an economic recovery when the industry that accounts for 70% of GDP is in free fall? The answer is that 99% of America has not had an economic recovery. Only Bernanke’s 1% owner class have benefited from his QE/ZIRP induced stock market levitation.
The entire economic recovery storyline is a sham built upon easy money funneled by the Fed to the Too Big To Trust Wall Street banks so they can use their HFT supercomputers to drive the stock market higher, buy up the millions of homes they foreclosed upon to artificially drive up home prices, and generate profits through rigging commodity, currency, and bond markets, while reducing loan loss reserves because they are free to value their toxic assets at anything they please – compliments of the spineless nerds at the FASB. GDP has been artificially propped up by the Federal government through the magic of EBT cards, SSDI for the depressed and downtrodden, never ending extensions of unemployment benefits, billions in student loans to University of Phoenix prodigies, and subprime auto loans to deadbeats from the Government Motors financing arm – Ally Financial (85% owned by you the taxpayer). The country is being kept afloat on an ocean of debt and delusional belief in the power of central bankers to steer this ship through a sea of icebergs just below the surface.
The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The most amazingly delusional aspect to the chart above is retailers continued to add 44 million square feet in 2013 to the almost 15 billion existing square feet of retail space in the U.S. That is approximately 47 square feet of retail space for every person in America. Retail CEOs are not the brightest bulbs in the sale bin, as exhibited by the CEO of Target and his gross malfeasance in protecting his customers’ personal financial information. Of course, the 44 million square feet added in 2013 is down 85% from the annual increases from 2000 through 2008. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.
The impact of this retail death spiral will be vast and far reaching. A few factoids will help you understand the coming calamity:
- There are approximately 109,500 shopping centers in the United States ranging in size from the small convenience centers to the large super-regional malls.
- There are in excess of 1 million retail establishments in the United States occupying 15 billion square feet of space and generating over $4.4 trillion of annual sales. This includes 8,700 department stores, 160,000 clothing & accessory stores, and 8,600 game stores.
- U.S. shopping-center retail sales total more than $2.26 trillion, accounting for over half of all retail sales.
- The U.S. shopping-center industry directly employed over 12 million people in 2010 and indirectly generated another 5.6 million jobs in support industries. Collectively, the industry accounted for 12.7% of total U.S. employment.
- Total retail employment in 2012 totaled 14.9 million, lower than the 15.1 million employed in 2002.
- For every 100 individuals directly employed at a U.S. regional shopping center, an additional 20 to 30 jobs are supported in the community due to multiplier effects.
The collapse in foot traffic to the 109,500 shopping centers that crisscross our suburban sprawl paradise of plenty is irreversible. No amount of marketing propaganda, 50% off sales, or hot new iGadgets is going to spur a dramatic turnaround. Quarter after quarter there will be more announcements of store closings. Macys just announced the closing of 5 stores and firing of 2,500 retail workers. JC Penney just announced the closing of 33 stores and firing of 2,000 retail workers. Announcements are imminent from Sears, Radio Shack and a slew of other retailers who are beginning to see the writing on the wall. The vacancy rate will be rising in strip malls, power malls and regional malls, with the largest growing sector being ghost malls. Before long it will appear that SPACE AVAILABLE is the fastest growing retailer in America.
The reason this death spiral cannot be reversed is simply a matter of arithmetic and demographics. While arrogant hubristic retail CEOs of public big box mega-retailers added 2.7 billion retail square feet to our already over saturated market, real median household income flat lined. The advancement in retail spending was attributable solely to the $1.1 trillion increase (68%) in consumer debt and the trillion dollars of home equity extracted from castles in the sky, that later crashed down to earth. Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun. With real median household income 8% lower than it was in 2008, the collapse in retail traffic is a rational reaction by the impoverished 99%. Americans are using their credit cards to pay their real estate taxes, income taxes, and monthly utilities, since their income is lower, and their living expenses rise relentlessly, thanks to Bernanke and his Fed created inflation.
The media mouthpieces for the establishment gloss over the fact average gasoline prices in 2013 were the second highest in history. The highest average price was in 2012 and the 3rd highest average price was in 2011. These prices are 150% higher than prices in the early 2000′s. This might not matter to the likes of Jamie Dimon and Jon Corzine, but for a middle class family with two parents working and making 7.5% less than they made in 2000, it has a dramatic impact on discretionary income. The fact oil prices have risen from $25 per barrel in 2003 to $100 per barrel today has not only impacted gas prices, but utility costs, food costs, and the price of any product that needs to be transported to your local Wally World. The outrageous rise in tuition prices has been aided and abetted by the Federal government and their doling out of loans so diploma mills like the University of Phoenix can bilk clueless dupes into thinking they are on their way to an exciting new career, while leaving them jobless in their parents’ basement with a loan payment for life.
The laughable jobs recovery touted by Obama, his sycophantic minions, paid off economist shills, and the discredited corporate legacy media can be viewed appropriately in the following two charts, that reveal the false storyline being peddled to the techno-narcissistic iGadget distracted masses. There are 247 million working age Americans between the ages of 18 and 64. Only 145 million of these people are employed. Of these employed, 19 million are working part-time and 9 million are self- employed. Another 20 million are employed by the government, producing nothing and being sustained by the few remaining producers with their tax dollars. The labor participation rate is the lowest it has been since women entered the workforce in large numbers during the 1980′s. We are back to levels seen during the booming Carter years. Those peddling the drivel about retiring Baby Boomers causing the decline in the labor participation rate are either math challenged or willfully ignorant because they are being paid to be so. Once you turn 65 you are no longer counted in the work force. The percentage of those over 55 in the workforce has risen dramatically to an all-time high, as the Me Generation never saved for retirement or saw their retirement savings obliterated in the Wall Street created 2008 financial implosion.
To understand the absolute idiocy of retail CEOs across the land one must parse the employment data back to 2000. In the year 2000 the working age population of the U.S. was 213 million and 136.9 million of them were working, a record level of 64.4% of the population. There were 70 million working age Americans not in the labor force. Fourteen years later the number of working age Americans is 247 million and only 144.6 million are working. The working age population has risen by 16% and the number of employed has risen by only 5.6%. That’s quite a success story. Of course, even though median household income is 7.5% lower than it was in 2000, the government expects you to believe that 22 million Americans voluntarily left the labor force because they no longer needed a job. While the number of employed grew by 5.6% over fourteen years, the number of people who left the workforce grew by 31.1%. Over this same time frame the mega-retailers that dominate the landscape added almost 3 billion square feet of selling space, a 25% increase. A critical thinking individual might wonder how this could possibly end well for the retail genius CEOs in glistening corporate office towers from coast to coast.
This entire materialistic orgy of consumerism has been sustained solely with debt peddled by the Wall Street banking syndicate. The average American consumer met their Waterloo in 2008. Bernanke’s mission was to save bankers, billionaires and politicians. It was not to save the working middle class. You’ve been sacrificed at the altar of the .1%. The 0% interest rates were for Jamie Dimon and Lloyd Blankfein. Your credit card interest rate remained between 13% and 21%. So, while you struggle to pay bills with your declining real income, the Wall Street bankers are again generating record profits and paying themselves record bonuses. Profits are so good, they can afford to pay tens of billions in fines for their criminal acts, and still be left with billions to divvy up among their non-prosecuted criminal executives.
Bernanke and his financial elite owners have been able to rig the markets to give the appearance of normalcy, but they cannot rig the demographic time bomb that will cause the death and destruction of our illusory retail paradigm. Demographics cannot be manipulated or altered by the government or mass media. The best they can do is ignore or lie about the facts. The life cycle of a human being is utterly predictable, along with their habits across time. Those under 25 years old have very little income, therefore they have very little spending. Once a job is attained and income levels rise, spending rises along with the increased income. As the person enters old age their income declines and spending on stuff declines rapidly. The media may be ignoring the fact that annual expenditures drop by 40% for those over 65 years old from the peak spending years of 45 to 54, but it doesn’t change the fact. They also cannot change the fact that 10,000 Americans will turn 65 every day for the next sixteen years. They also can’t change the fact the average Baby Boomer has less than $50,000 saved for retirement and is up to their grey eye brows in debt.
With over 15% of all 25 to 34 year olds living in their parents’ basement and those under 25 saddled with billions in student loan debt, the traditional increase in income and spending is DOA for the millennial generation. The hardest hit demographic on the job front during the 2008 through 2014 ongoing recession has been the 45 to 54 year olds in their peak earning and spending years. Combine these demographic developments and you’ve got a perfect storm for over-built retailers and their egotistical CEOs.
The media continues to peddle the storyline of on-line sales saving the ancient bricks and mortar retailers. Again, the talking head pundits are willfully ignoring basic math. On-line sales account for 6% of total retail sales. If a dying behemoth like JC Penney announces a 20% decline in same store sales and a 20% increase in on-line sales, their total change is still negative 17.6%. And they are still left with 1,100 decaying stores, 100,000 employees, lease payments, debt payments, maintenance costs, utility costs, inventory costs, and pension costs. Their future is so bright they gotta wear a toe tag.
The decades of mal-investment in retail stores was enabled by Greenspan, Bernanke, and their Federal Reserve brethren. Their easy money policies enabled Americans to live far beyond their true means through credit card debt, auto debt, mortgage debt, and home equity debt. This false illusion of wealth and foolish spending led mega-retailers to ignore facts and spread like locusts across the suburban countryside. The debt fueled orgy has run out of steam. All that is left is the largest mountain of debt in human history, a gutted and debt laden former middle class, and thousands of empty stores in future decaying ghost malls haunting the highways and byways of suburbia.
The implications of this long and winding road to ruin are far reaching. Store closings so far have only been a ripple compared to the tsunami coming to right size the industry for a future of declining spending. Over the next five to ten years, tens of thousands of stores will be shuttered. Companies like JC Penney, Sears and Radio Shack will go bankrupt and become historical footnotes. Considering retail employment is lower today than it was in 2002 before the massive retail expansion, the future will see in excess of 1 million retail workers lose their jobs. Bernanke and the Feds have allowed real estate mall owners to roll over non-performing loans and pretend they are generating enough rental income to cover their loan obligations. As more stores go dark, this little game of extend and pretend will come to an end. Real estate developers will be going belly-up and the banking sector will be taking huge losses again. I’m sure the remaining taxpayers will gladly bailout Wall Street again. The facts are not debatable. They can be ignored by the politicians, Ivy League economists, media talking heads, and the willfully ignorant masses, but they do not cease to exist.
“Facts do not cease to exist because they are ignored.” – Aldous Huxley
Just under two months ago, when the $13 billion settlement for JP Morgan Chasewas coming down the chute, word leaked out that that the deal was no sure thing. Among other things, it was said that prosecutors investigating Chase’s role in the Bernie Madoff caper – Chase was Madoff’s banker – were insisting on a guilty plea to actual criminal charges, but that this was a deal-breaker for Chase.
Something had to give, and now, apparently, it has. Last week, it was reported that the state and Chase were preparing a separate $2 billion deal over the Madoff issues, a series of settlements that would also involve a deferred prosecution agreement.
The deferred-prosecution deal is a hair short of a guilty plea. The bank has to acknowledge the facts of the government’s case and pay penalties, but as has become common in the Too-Big-To-Fail arena, we once again have a situation in which all sides will agree that a serious crime has taken place, but no individual has to pay for that crime.
As University of Michigan law professor David Uhlmann noted in a Times editorial at the end of last week, the use of these deferred prosecution agreements has explodedsince the infamous Arthur Andersen case. In that affair, the company collapsed and28,000 jobs were lost after Arthur Andersen was convicted on a criminal charge related to its role in the Enron scandal. As Uhlmann wrote:
From 2004 through 2012, the Justice Department entered into 242 deferred prosecution and nonprosecution agreements with corporations; there had been just 26 in the preceding 12 years.
Since the AA mess, the state has been beyond hesitant to bring criminal charges against major employers for any reason. (The history of all of this is detailed in The Divide, a book I have coming out early next year.) The operating rationale here is concern for the “collateral consequences” of criminal prosecutions, i.e. the lost jobs that might result from bringing charges against a big company. This was apparently the thinking in the Madoff case as well. As the Times put it in its coverage of the rumored $2 billion settlement:
The government has been reluctant to bring criminal charges against large corporations, fearing that such an action could imperil a company and throw innocent employees out of work. Those fears trace to the indictment of Enron’s accounting firm, Arthur Andersen . . .
There’s only one thing to say about this “reluctance” to prosecute (and the “fear” and “concern” for lost jobs that allegedly drives it): It’s a joke.
Yes, you might very well lose some jobs if you go around indicting huge companies on criminal charges. You might even want to avoid doing so from time to time, if the company is worth saving.
But individuals? There’s absolutely no reason why the state can’t proceed against the actual people who are guilty of crimes.
If anything, the markets might react positively to that kind of news. It certainly did so in the Adelphia case, in which the government dragged cable company executives John, Timothy and Michael Rigas out of their beds and publicly frog-marched them in handcuffs on the streets of the Upper East Side at 6 a.m.
The NYSE had been on a four-day slump up until those arrests. After they hit the news, it surged to its second-biggest one-day gain in history. From the AP report on July 25, 2002:
Although stocks began the day by extending a four-day losing streak, the arrest of top Adelphia Communications Corporation executives for allegedly looting the cable TV company triggered a broad rally that intensified as the session wore on.
Of course, that was an isolated example, and the broad market rally that day didn’t save Adelphia, which had already gone bankrupt by the time of the Rigas arrests. But certainly it gave credence to the sensible argument that the markets generally would rather see the government punish criminals than not.
Anyway, it’s hard to not notice the fact that crude Ponzi schemers like Madoff (150 years)and Allen Stanford (110 years) drew enormous penalties – essentially life terms for both – while no one from any major firm has drawn any penalty at all for abetting those frauds.
That’s an enormous discrepancy, life versus nothing. But it makes an awful kind of sense. Madoff and Stanford were safe prosecutorial targets. There was no political fallout to worry about for sending up two guys who mostly bilked other rich people out of money. Also, there were no “collateral consequences” in the form of major job losses that had to be considered, just a couple of obnoxious families that would lose their jets and their ski vacations.
But most importantly, Madoff and Stanford were simple scam artists who could have come from any generation. There was nothing systemic about their crimes. It was possible to throw them in jail without exposing widespread corruption in our financial system.
That’s what’s so disturbing about this latest Justice Department cave. It underscores the increasingly obvious fact that the federal government is not interested in getting to the bottom of our financial corruption problem. They seem more to be treating bank malfeasance as a PR issue for the American financial markets that has to be managed away, instead of a corruption problem to be thoroughly investigated and fixed.
In a way, the administration seems to have the same motivation as Chase itself – as CEOJamie Dimon put it last week, “We have to get some of these things behind us so we can do our job.”
Madoff’s con was comically crude: He never executed a single trade for a client, and instead just dumped all of their money into a single checking account. To say, as Madoff himself did, that his bank “had to know” what he was up to seems a major understatement.
Remember, independent investigator Harry Markopolos figured the whole thing outyears before the Ponzi collapsed without the benefit of complete access to Madoff’s financial information. Markopolos really needed just one insight to penetrate the Madoff mystery.
“You can’t dominate all markets,” Markopolos said, years ago. “You have to have some losses.”
That this basic truth eluded both the SEC (which somehow failed to notice the world’s largest hedge fund never making a single trade) and Madoff’s own banker for years on end points to horrific systemic problems. A prosecutor who actually cared would floor it in court against everyone who made that fraud possible until he or she got to the bottom of how these things can happen.
Our response was different. We gave 150 years to the main guy, and now it seems we’re quietly taking a check to walk away from the rest of it. It’s not going to be a surprise when it happens again.
The bankers have written the most integral rule that would reform their business practices and President Obama is showing his support.
Obama has released a written statement supporting the new Volcker Rule that will make “sure big banks can’t make risky bets with their customer’s deposits.”
Obama said: “Our financial system will be safer and the American people are more secure because we fought to include this protection in the law.”
Speaking about the crash of 2008, Obama admonished the banks for “fueling a punishing recession on Main Street that ultimately cost millions of jobs and hurt families across the country.”
As part of the economic repair of our country, the president said that financial “rules that reward sound financial practices allow honest innovation and strengthen the financial system’s ability to support job creation and durable economic growth.”
Obama said that the Volcker Rule will make “it illegal for firms to use government-insured money to make speculative bets that threaten the entire financial system, and demand a new era of accountability from CEOs who must sign off on their firm’s practices.”
This new rule will ensure that ‘our financial system will be safer.”
Experts say that the new Volcker Rule glosses over the fact that it was “trading mishaps” that were the “root cause of the financial crisis.”
Because of this, “the rule doesn’t go far enough . . . prohibition [will] draw a line, making it clear that banks’ business is about lending not investing.”
The Volcker Rule, within the Dodd-Frank law, is now being used by the president as a public relations ploy to give Americans a semblance ofgovernment oversight and the reining in of “risk taking after the financial crisis.”
The new Volcker Rule was created by the banks and is “the rule that the banks wanted.”
The 2011 draft of the Volcker Rule was leaked by the American Banker Association (ABA).
Rob Tooney, associate general counsel at the Financial Securities Industry and Financial Markets Association (FSIFMA) said : “Our concern is that whatever the final rule is that it doesn’t harm the markets’ overall liquidity. The short answer is we don’t know yet.”
The new rule was reported “far more restrictive than previously expected” and now that the banks have taken over the writing of the document, they feel more comfortable in supporting its passage.
Ben Bernanke, chairman of the Federal Reserve Bank (FRB) said at a central bank meeting this week: “Getting to this vote has taken longer than we would have liked, but five agencies have had to work together to grapple with a large number of difficult issues and respond to extensive public comments.”
In 2010, Alan Blinder, economist of Princeton stated of the burgeoning Dodd-Frank law in an op-ed piece : “It is devilishly difficult to draw bright lines between proprietary trading and trading, hedging, and market-making on behalf of clients.”
Paul Volcker said he was “disappointed with how the rule was turning out” and that he “didn’t expect the proposal to be diluted so much, said a person with knowledge of his views. He’s content with language that bans banks from trading with their own capital, the person said.”
The Dodd-Frank Law was signed that same year.
Volcker contended that the rule should have “clear concise definitions, firmly worded prohibitions, and specificity in describing the permissible activities will be of prime importance for the regulators as they implement and enforce this law.”
In 2011, Senator Carl Levin co-sponsored the Volcker Rule and spoke toCongress about the importance of the regulation: “The Volcker Rule is essential to protect taxpayers from banks’ excessive financial risk-taking, conflicts of interest, and from the resulting billion-dollar bailouts. I look forward to reviewing the proposed rule and hope the regulators reject efforts to weaken the law.”
In early 2012, Jamie Dimon, chief executive of JP Morgan Chase & Co, brazenly told media : “If you want to be trading, you have to have a lawyer and a psychiatrist sitting next to you determining what was your intent every time you did something.”
In another interview, Dimon said of Volcker: “Paul Volcker, by his own admission, has said he doesn’t understand capital markets. Honestly, he has proven that to me.”
Lawrence Fink, chief executive of BlackRock commented : “We are not in support of it. We sent the letter as a firm. It’s very hard for me to understand how to navigate the Volcker Rule. What is proprietary trading? What is flow trading? It’s going to be very definitional.”
Volcker responded to critics, saying: “A lot of the criticism is over the complexity of the thing and, essentially it’s down to a lot of details. But the basic rule, of course, is incorporated in the law. And I think when you get all finished with this Sturm und Drang in the Congress now, I think you’re going to have a reasonable interpretation of a law and an interpretation that can be reasonably followed by the banks and enforced by the regulators.”
This past summer, Jacob Lew, secretary of the US Treasury, warned of a year’s end deadline on the Volcker Rule.
Lew said: “I want to mention that the Volcker Rule is particularly important, and I will continue to push for swift completion of a rule that keeps faith with the intent of the statute and the president’s vision.”
Catching Fire, civil war, Crisis, Decline, Edward Snowden, Empire, Federal Reserve, Fourth Turning, George Washington, Grapes of Wrath, Hunger Games, Huxley, inequality, Jamie Dimon, Jon Corzine, Katniss Everdeen, Lady Gaga, Lord of the Rings, Millennials, mood, Neil Postman, NSA, oligarchs, Orwell’s 1984,Poverty, President Snow, Rome, ruling class, Samuel Adams, Steinbeck, Strauss & Howe, Suzanne Collins,Tolkien, TV, Wall Street, wealth
“Human history seems logical in afterthought but a mystery in forethought. In every prior Fourth Turning, the catalyst was foreseeable but the climax was not.” – The Fourth Turning – Strauss & Howe – 1997
We are five years into the Crisis that will not resolve itself until sometime in the 2020’s. No one can predict the specific events that will fundamentally change history over the next decade, but the catalysts of debt, civic decay and global disorder were evident sixteen years ago when Strauss and Howe wrote their prophetic generational history. The volcanic eruption occurred in 2008 when the worldwide financial system blew and the molten lava continues to spew forth and flow along the Federal Reserve created channels, protecting the corrupt establishment while incinerating senior citizens, the working middle class and Millennials. Deep within the volcano the pressure is building again as the mood of the country darkens. It will blow again and the economic, social, political and military distress will catalyze into a catastrophic emergency that will tear the fabric of the country asunder. The existing social order will be swept away and replaced by a new paradigm which could be better or far worse.
“Imagine some national (and probably global) volcanic eruption, initially flowing along channels of distress that were created during the Unraveling era and further widened by the catalyst. Trying to foresee where the eruption will go once it bursts free of the channels is like trying to predict the exact fault line of an earthquake. All you know in advance is something about the molten ingredients of the climax, which could include the following:
- Economic distress, with public debt in default, entitlement trust funds in bankruptcy, mounting poverty and unemployment, trade wars, collapsing financial markets, and hyperinflation (or deflation).
- Social distress, with violence fueled by class, race, nativism, or religion and abetted by armed gangs, underground militias, and mercenaries hired by walled communities.
- Political distress, with institutional collapse, open tax revolts, one-party hegemony, major constitutional change, secessionism, authoritarianism, and altered national borders.
- Military distress, with war against terrorists or foreign regimes equipped with weapons of mass destruction.”
The Fourth Turning – Strauss & Howe – 1997
Linear thinkers are incapable or unwilling to understand that history is cyclical, primarily driven by national mood changes and the interaction of generations entering different stages in their 80 year life cycle. We’ve seen this story before, but those who lived through the last Fourth Turning have mostly died out, and our techno-narcissistic populace has absolutely no interest in understanding history beyond last night’s episode of Duck Dynasty. The mood of the country during a Turning is often captured in literature and/or film produced during that period.
The last Fourth Turning encompassed the period from the Great Crash in 1929 through the Great Depression and World War II, ending in 1946 with a new world order. Four novels written during this Crisis captured the dystopian nature of the time, reflecting the fear, pain, anger, brutality, and courageousness of the common man during that perilous period. Huxley’s Brave New World (1932),Steinbeck’s Grapes of Wrath (1939), Orwell’s 1984 (written during WWII), andTolkien’s Lord of the Rings Trilogy (written from 1937 through 1949) are masterpieces of literature which captured the aura of the times in which they were penned. Only one of the novels was brought to film during the Crisis, with John Ford’s brilliant Grapes of Wrath screen adaptation capturing the suffering and desperation of common folk during the Great Depression.
Most of what passes for literature and film these days is nothing more than glorified commercials or corporate created twaddle designed for narcissistic, mindless, teenage girls. Many will dismiss Suzanne Collins’ Hunger Gamestrilogy and the film adaptations as nothing more than run of the mill teenager nonsense. They are making a huge mistake. Decades from now, if we make the right choices during this Fourth Turning, The Hunger Games will be viewed as the novels and films that captured the darkening, rebellious mood of the Crisis. It is not a coincidence the first novel was published in September 2008. The worldwide financial meltdown initiated by the Wall Street financial elite and their paid for cronies in the nation’s capital, occurred in September 2008 and marked the commencement of this Fourth Turning. Collins has brilliantly created a dystopian nightmare that combines the shallowness and superficiality of our reality TV culture with our never ending wars of choice and rise of our surveillance state, while blending the decadence and debauchery of the declining Roman Empire. She also unwittingly places her characters in their proper generational roles during a Fourth Turning Crisis.
Collins was a military brat who was fortunate enough to have a father that taught her the truth about historical events, not the propaganda taught in our public schools today.
“He was career Air Force, a military specialist, a historian, and a doctor of political science. When I was a kid, he was gone for a year in Viet Nam. It was very important to him that we understood about certain aspects of life. So, it wasn’t enough to visit a battlefield, we needed to know why the battle occurred, how it played out, and the consequences. Fortunately, he had a gift for presenting history as a fascinating story. He also seemed to have a good sense of exactly how much a child could handle, which is quite a bit.”
She learned lessons about war, poverty, oppression, and the brutality and corruption of the ruling classes. Her knowledge of history, the visual images of reality shows and the Iraq War displayed on TV created the idea for her Hunger Games trilogy.
“I was channel surfing between reality TV programming and actual war coverage when Katniss’ story came to me. One night I’m sitting there flipping around and on one channel there’s a group of young people competing for, I don’t know, money maybe? And on the next, there’s a group of young people fighting an actual war. And I was tired, and the lines began to blur in this very unsettling way, and I thought of this story.”
The central storyline of The Hunger Games is there are twelve districts subservient to the Capitol in the totalitarian nation of Panem. The country consists of the affluent Capitol, located in the Rocky Mountains, and twelve desperately poor districts ruled by the Capitol. The Capitol is lavishly opulent and technologically advanced, but the twelve districts are in varying states of poverty. As punishment for a past rebellion against the Capitol wherein twelve of the districts were defeated and the thirteenth purportedly destroyed, one boy and one girl from each of the twelve districts, between the ages of twelve and eighteen, are selected by lottery to compete in the “Hunger Games” on an annual basis.
The Games are a televised spectacle, with the participants, called “tributes”, being forced to fight to the death in a treacherous outdoor arena. It’s a combination of American Idol, Survivor, and Middle Eastern warfare. The victorious tribute and his or her home district are then remunerated with extra food and supplies. The objective of the Hunger Games is to provide superficial reality TV entertainment for the vacuous small-minded masses in the Capitol and serve as a constant reminder to the Districts of the Capitol’s supremacy and supposed omnipotence. The Capitol ruling with an iron fist over its 13 Districts is clearly founded upon the British Empire running roughshod over the 13 American colonies and harvesting resources and taxes to maintain their wealth, power and control. Collins utilizes her knowledge of ancient Greek and Roman history and merging it with our degraded shallow TV culture to meld a dystopian nightmare of brutality, child murder, voyeuristic sadism, and a fragile, rotting empire.
“A significant influence would have to be the Greek myth of Theseus and the Minotaur. The myth tells how in punishment for past deeds, Athens periodically had to send seven youths and seven maidens to Crete, where they were thrown in the Labyrinth and devoured by the monstrous Minotaur. Even as a kid, I could appreciate how ruthless this was. Crete was sending a very clear message: “Mess with us and we’ll do something worse than kill you. We’ll kill your children.” And the thing is, it was allowed; the parents sat by powerless to stop it. Theseus, who was the son of the king, volunteered to go. I guess in her own way, Katniss is a futuristic Theseus.
In keeping with the classical roots, I send my tributes into an updated version of the Roman gladiator games, which entails a ruthless government forcing people to fight to the death as popular entertainment. The world of Panem, particularly the Capitol, is loaded with Roman references. Panem itself comes from the expression “Panem et Circenses” which translates into ‘Bread and Circuses’.” – Suzanne Collins
Any similarities between propaganda posters in Panem and propaganda in America are purely coincidental, I’m sure.
“At least once every human should have to run for his life, to teach him that milk does not come from supermarkets, that safety does not come from policemen, that ‘news’ is not something that happens to other people. He might learn how his ancestors lived and that he himself is no different–in the crunch his life depends on his agility, alertness, and personal resourcefulness.” – Robert Heinlein
The Reaping of Wealth
“War, terrible war. Widows, orphans, a motherless child. This was the uprising that rocked our land. Thirteen districts rebelled against the country that fed them, loved them, protected them. Brother turned on brother until nothing remained. And then came the peace, hard fought, sorely won. A people rose up from the ashes and a new era was born. But freedom has a cost. When the traitors were defeated, we swore as a nation we would never know this treason again. And so it was decreed, that each year, the various districts of Panem would offer up in tribute, one young man and woman, to fight to the death in a pageant of honor, courage and sacrifice. The lone victor, bathed in riches, would serve as a reminder of our generosity and our forgiveness. This is how we remember our past. This is how we safeguard our future.” – President Snow – Hunger Games
A major theme in the novels is the tremendous wealth inequality between the Capitol and most of the districts. District 12, the home of Katniss Everdeen the protagonist, is the most desperately poor. District 12 is located in the Appalachian region of the former USA. They are tasked with providing the Capitol resources obtained from dangerous mines. The population lives a bleak existence in poverty and squalor, with starvation always looming like an apparition of death. The districts are essentially slave plantations to be pillaged for whatever the dictatorial Capitol demands. The districts exist to harvest resources, such as fish, coal, lumber, crops, and gems, all sent to fulfill their quotas. Many districts, such as 12 and 11, don’t have enough coal to power their own district or enough food to feed their citizens. Districts 1, 2 and 4 are closer and more allied with the Capitol, resulting in them receiving more support, better food, consumer goods, and military protection. The wealth inequality between the ruling class and the working class in the districts is the primary cause of discontent and increasing rebelliousness.
The parallels with our corporate fascist surveillance state are unmistakable. The wealth and power in our country is concentrated in the hands of ruling elite who primarily reside in the nation’s capital of Washington D.C. and the financial capital of New York City. The top 1% control 42% of the nation’s financial wealth, while the bottom 80% control less than 5% of the financial wealth.
Table 1: Income, net worth, and financial worth in the U.S. by percentile, in 2010 dollars
Wealth or income class
Mean household income
Mean household net worth
Mean household financial (non-home) wealth
|Top 1 percent||
|Top 20 percent||
|Bottom 40 percent||
From Wolff (2012); only mean figures are available, not medians. Note that income and wealth are separate measures; so, for example, the top 1% of income-earners is not exactly the same group of people as the top 1% of wealth-holders, although there is considerable overlap.
The concentration of wealth in the hands of the few if achieved through superior work ethic and/or intellectual advantage would not cause discontent among the masses. Henry Ford, Steve Jobs and Bill Gates were admired for creating businesses and employing people. They earned their wealth. Today, it has become clear to all critical thinking people that a small cabal of super-rich men constituting an invisible ruling class have captured our financial and political system. They are the .1% who run the Wall Street banks, control the Federal Reserve, buy off the politicians of both parties, and pay lobbyists to write the laws and tax regulations. They use their ill-gotten wealth to maintain the status quo and further pillage the wealth of the working class through financial market manipulation, man-made inflation and outright theft. As 47 million Americans depend upon food stamps and other welfare programs to get by and real unemployment exceeds 20%, the wealth inequality in the nation has reached levels only seen in 1929, prior to the Great Crash outset of the last Fourth Turning. The mounting anger and discontent among the former working middle class is palatable. Those at the top of the food chain have rigged the system and get richer by the day. They bribe the lower classes with welfare benefits, taken from the working middle class, in an effort to stave off riots in the streets.
Rentier capitalism, the economic practice of parasitic monopolization of access to physical, financial, and intellectual property, has replaced free market capitalism, with the rentier class generating billions of illicit financialization profits while contributing nothing to society. We’ve become a modern day Panem, an imperialistic state thriving on the slave labor of other countries and inflicting our bastardized form of democracy at the point of Tomahawk missiles. In order to survive, Katniss defiantly and illegally hunts outside the District 12 fence perimeter and the famished citizens openly defy the law with their black market trading at the Hob. Desperate times lead to desperate measures.
When people despair, laws designed to maintain the status quo are deemed inconsequential by the peasants. You can see this happening in our society today. Welfare fraud among the lower classes is rampant. Bartering and working under the table for cash to avoid the crushing tax burden is growing. The rise of bitcoin as an alternative currency and the growing popularity of having possession of physical gold and silver is a reaction to the banker/politician fiat currency debt scheme to impoverish the masses. When the people see the bankers (Jamie Dimon) and former politicians (Jon Corzine) breaking laws with impunity, they feel no obligation to obey laws designed to keep them under the thumb of the ruling class. The fallacy of all men being created equal, with the American dream achievable for everyone, is still propagated by the government media propaganda mouthpieces. You’d have to be asleep to believe it.
In reality the ultra-rich have captured the system and have stacked the deck in their favor. This theme is captured in the Hunger Games during the reaping process, which is supposed to be random, with rich and poor equally likely to get chosen. In reality, the poor are much more likely than the rich to be reaped as tributes. In exchange for extra rations of food and oil necessary to keep from starving or freezing to death, called tesserae, those children eligible for theHunger Games can enter their names into the reaping additional times. Most children of poor families have to take tesserae to survive, so the children of poor families have more entries in the reaping than children of wealthy families who need no tesserae. The odds are never in their favor. The current version of the Hunger Games for our youth is loading them up with government peddled student loan debt, with no jobs available when they graduate, leaving them enslaved in unpayable debt.
The rich who do become tributes from the more prosperous districts have an additional advantage, because they are often trained to take part in the Games and volunteer to do so. They are bigger, stronger, well fed and groomed to win. The poor tributes face certain death. The fact is you can only push people so far before they fight back. The arrogance and hubris of the rich governing class leads them to disregard the misery of the lowly peasants, while they intensify their pillaging and burning of the countryside. Eventually a spark ignites a revolutionary spirit and unleashes a torrent of violence and retribution. History is ripe with instances of the downtrodden masses rising up and throwing off the yoke of authoritarian despots. Fourth Turnings are when the existing social order is swept away in an avalanche of violence and bloodshed.
Bread, Circuses & Reality TV
“What must it be like, I wonder, to live in a world where food appears at the press of a button? How would I spend the hours I now commit to combing the woods for sustenance if it were so easy to come by? What do they do all day, these people in the Capitol, besides decorating their bodies and waiting around for a new shipment of tributes to roll in and die for their entertainment?” – Katniss Everdeen – Hunger Games
The name of the nation – Panem, derives from the Latin phrase panem et circenses, which translates into ‘bread and circuses’. The idiom is meant to describe entertainment used to distract public attention from the corruption and vices of the governing class. By the government providing basic food and ample entertainment, the citizens voluntarily sacrifice liberties and rights for safety, security, and sustenance. The debauched occupants of the Capitol are the wealthiest and most decadent of all Panem, and the city’s affluence is fueled by the compulsory labor of the districts. The degenerates of the Capitol are known for their “creative” outfits, outrageous hair and ridiculous sense of fashion, even to the extent of dying the color of their own skin, or having whiskers implanted. Food and amusement are major drivers of the Hunger Games plot. The impoverished citizens, particularly in Districts 12 and 11 are on the verge of starvation, while the Capitol has food in abundance and throws lavish parties with extravagant and copious quantities of cuisine.
The superficial decadent upper class in the Capitol embraced overindulgence to such an extreme they purposely drank a concoction which would force them to throw up, so they could consume more. The analogy to the Roman vomitoriums during the depraved final days of their declining empire is distinct. Today in America, 47 million lower class Americans are reliant upon food stamps to be fed, while the majority are left to ingest processed poison packaged as food by mega-corporations and relentlessly marketed on television to a dumbed down populace. The ultra-rich dine on caviar and champagne in their penthouse suites, mansions in the Hamptons, or make reservations at restaurants not available to the 99.9%.
Appearances are extremely important in the post-apocalyptic pretentious world of the Hunger Games. Style and ostentatious fashion are everything to the affluent citizens of the plutocratic Capitol. It is natural to tattoo and dye their bodies’ in bright colors, as well as undergo plastic surgery to improve their looks. Some people of the Capitol have gems implanted in their skin, as well as talons. Capitol residents regularly wear wigs in a multitude of shocking colors. The degradation of our society can be seen in the worship of Hollywood created stars and pop singers freaks like Lady Gaga. The filthy rich deform their bodies with plastic surgery to change their natural appearance. By mutilating their bodies with surgery and tattoos, the media glorified fashionistas set the tone for a cultural decay. The lower classes can’t afford expensive plastic surgery, so they cover themselves in hideous tattoos in a pathetic attempt at individuality, when they are just conforming like lemmings to what they are told is trendy. The vain and narcissistic are too ignorant to realize their worship of celebrity and purchase of the latest fashions in clothes and jewelry are the sheep-like behavior of conformists.
The voyeuristic exploitation of children is taken to an extreme in The Hunger Games with their terror, suffering and slaughter televised for the enjoyment of a blood thirsty public. Murder as mass entertainment in a reality TV game show format illustrates a truly depraved culture. The American TV culture turns news, tragedy, childhood and war into morbid reality TV entertainment. The news, as reported by the corporate legacy media, is nothing more than propaganda generated by the establishment to support their continued control over the financial and governmental levers. It is designed to distract, misinform and obscure the truth. What the news cameras show is not reality and facades are more consequential than the truth – a Wag the Dog world. Virtually half of prime time TV is a staged voyeuristic display of moronic triviality, requiring no thought and providing a form of passive sedation for low IQ imbeciles. The sexual exploitation of children in shows such as Toddlers & Tiaras and Honey Boo Boo is considered normal in a thoroughly abnormal society. Television is nothing but show business and we are amusing ourselves to death, as revealed by Neil Postman.
“When a population becomes distracted by trivia, when cultural life is redefined as a perpetual round of entertainments, when serious public conversation becomes a form of baby-talk, when, in short, a people become an audience, and their public business a vaudeville act, then a nation finds itself at risk; culture-death is a clear possibility.” – Neil Postman – Amusing Ourselves to Death
The Hunger Games are televised and discussed incessantly in Panem’s media, just as the pointless Iraq War and faux War on Terror are ceaselessly analyzed, evaluated and hyped by talking heads with bleached teeth, like the smarmy Caesar Flickerman in the Hunger Games movie. The Roman gladiatorial games and the televised “Shock & Awe” of obliterating the city of Baghdad with thousands of cruise missiles are both forms of barbaric entertainment, with the poor sacrificed on the altar of entertainment. The ruling class have successfully dehumanized our culture and turned real people into commodities to be manipulated, used and even killed for profit. Their value becomes determined by how much entertainment they provide, and as such they lose their identities as people. Reality television is a form of objectification. The world has become a stage for our Contollers, their stage managers on Madison Avenue and the mainstream media.
“Television is our culture’s principal mode of knowing about itself. Therefore — and this is the critical point — how television stages the world becomes the model for how the world is properly to be staged. It is not merely that on the television screen entertainment is the metaphor for all discourse. It is that off the screen the same metaphor prevails.” ― Neil Postman – Amusing Ourselves to Death
We’ve spent the last five decades learning to love our oppression, adoring our technology, glorying in our distaste for reading books, and wilfully embracing our ignorance. Huxley’s vision of a population, passively sleep walking through lives of self- absorption, triviality, drug induced gratification, materialism and irrelevance has come to pass. Only in the last two decades has Orwell’s darker vision of oppression, fear, surveillance, hate and intimidation begun to be implemented by the ruling class. We’ve become a people controlled by pleasure and pain, utilized in varying degrees by those in power. Stay tuned for our modern day Hunger Games after this commercial for your very own Duck Dynasty Chia Pet.
In Part 2 of this article – May the Odds Ever Be in Your Favor – Hope & Defiance, I’ll address how Edward Snowden is our mockingjay who has ignited a fire that will lead to revolution and the next phase of this Fourth Turning.
In these northern climes, this turning into the year’s final quarter feels written in the blood, or at least into the legacy code of culture. The leaves skitter across the streets in an early twilight, chill winds daunt man and dog, the landscape buttons itself up for the long sleep, and human activity moves indoors — including the arduous festivities around the spooky solstice. We take the comfort that we can in all that. But a strange torpor of event attends this year’s turning. In the year’s final happenings, nothing seems to happen, and what little does happen seems not to matter. The world sits with frayed nerves and hears a distant noise, which is the cosmic screw of history turning.
The nation gets over everything without resolving anything — fiscal cliffs, debt ceilings, health care implosions, domestic spying outrages, taper talk jukes, banking turpitudes, the Syria bluster, the Iran nuke deal fake-out. It’s dangerous to live as though there was no such thing as consequence. Societies have a way of reaching a consensus about something without ever stating it outright. The American public has silently agreed to sit on its hands though one more Christmas and after that things shake loose.
What happens, for instance, in the limbo months of ObamaCare ahead, when people either won’t sign in for health insurance, or can’t because of the stupidity of the website design, and the failure of its work-arounds, and the number rises of people falling seriously ill without insurance, and the ludicrously extortionate hospital bills start rolling in and the machinery of bankruptcy and re-po turns the screws on tens of thousands of families — while the insurance company executives spend their 2013 bonus money on Beemers and McMansion additions? There must be some threshold for criticality there, some breaking point that prompts a swindled population to break out its fabled arsenals. Say, somewhere in America a child tragically dies after being hit by a car and three unsuccessful surgeries to try to fix the damage, and thirty days after the funeral, the uninsured dad gets a bill for $416,000? I doubt a society can withstand many insults like that.
Above all, this big nation has failed to reckon the central quandary of our time: the fatal hypertrophy of finance. This ghastly engine of rackets and swindles is the enlarged heart of a dying body politic, and all we know how to do is feed it more monetary Cheez Doodles. This has been going on far longer than the doctors and the witch doctors thought possible, and there is a foolish hope among the credulous that the larger organism of the economy must therefore be immortal. But the reality-based minority stoically awaits the final congestive infarction.
Everything points to 2014 as the moment the pretending stops and things get real. Nobody believes anymore that the Federal Reserve can replace an economy of authentic transactions with promissory notes. There is only one final thing that can happen with the Fed, and that is losing all control over rising interest rates. Janet Yellen is being set up as one of the epic chumps of history, and proof of her academic fecklessness is the mere fact that she accepted the post as Fed chair. She will preside over a fabulous disappearance of wealth in America. The blame for it will be epic, too, but it will not represent any genuine understanding of what happened.
Much is being made of the loneliness of Barack Obama these days. He also occupies a rather tragic niche in history — or the arc of his story at least points that way these days. Right now, it is very hard to tell whether he has been a hostage or a fool. He could have moved to break up the big banks in January of 2009, and any time since then he could have sent a memo to the Department of Justice instructing the prosecutions of financial crime to begin in earnest (or replaced the Attorney General). Didn’t happen. Was he being blackmailed by the likes of Jamie Dimon and Lloyd Blankfein, or did he just not know what was at stake?
The history of Barack Obama will be one long record of omissions to act, not just overt failures. He is the Bartleby the Scrivener of our politics. He “prefers not to….” Hence, the powerful lure of the charismatic figure who is sure to act. Adolf Hitler was very clear about his proposed program in the early 1920s, a decade before he came to power. He spelled it out unmistakably in his speeches and his political testament, Mein Kampf: do away with pain-in-the-ass democracy and destroy the Jews. He couldn’t have put it more plainly. The residual admiration for Hitler among the extreme right-wingers of today derives mainly from the simple fact that the man actually did what he said he would do. You can’t overstate the potential hunger for that sort of thing. The current climate of US politics being Weimar-on-steroids, I’m sure that an American corn-pone Hitler would have huge appeal for a beaten-down citizenry.
The means for such a coup of the zeitgeist are rather frightful now: drone aircraft, computer surveillance, militarized police, a puppet press. It makes thoughtful folks queasy. My bet, though, is that a fascist takeover of the US would end up being as inept and ineffectual as ObamaCare. It is one of the great hidden blessings of our time, actually, that anything organized on the massive scale is doomed to failure. But it is likewise the great mission of our time to prepare to get local and smaller, something we’re not really ready for and certainly not interested in. The intertwining of these dynamics will be the story in the year to come.
A letter sent to a ZH reader yesterday by JPMorgan Chase, specifically its Business Banking division, reveals something disturbing. For whatever reason, JPM has decided that after November 17, 2013, it will halt the use of international wire transfers (saying it would “cancel any international wire transfers, including recurring ones”), but more importantly, limits the cash activity in associated business accounts to only $50,000 per statement cycle. “Cash activity is the combined total of cash deposits made at branches, night drops and ATMs and cash withdrawals made at branches and ATMs.”
Why? “These changes will help us more effectively manage the risks involved with these types of transactions.” So… JPM is now engaged in the risk-management of ATM withdrawals?
Reading between the lines, this sounds perilously close to capital controls to us.
While we have no way of knowing just how pervasive this novel proactive at Chase bank is and what extent of customers is affected, what is also left unsaid is what the Business Customer is supposed to do with the excess cash: we assume investing it all in stocks, and JPM especially, is permitted? But more importantly, how long before the $50,000 limit becomes $20,000, then $10,000, then $5,000 and so on, until Business Customers are advised that the bank will conduct an excess cash flow sweep every month and invest the proceeds in a mutual fund of the customer’s choosing?
Full redacted letter below:
- Toward Free Exchange Rather Than Capital Controls (economicsone.com)
- Easing troubles in the long run (thehindu.com)
- Capital controls to be lifted by January: Anastasiades (cyprus-mail.com)
- Capital controls to be lifted in the first months of 2014, Cyprus FinMin says (famagusta-gazette.com)
- Capital controls to be lifted except cross-border transfers (UPDATED) (cyprus-mail.com)
- Cyprus Capital Controls Could ‘End in Months’ (blogs.wsj.com)
- 5 Years Later: Winners & Losers of the Financial Crisis (fool.com)
- RBI chief says policy not to resort to capital controls – Reuters India (in.reuters.com)
Let Freedom Reign This July 4th By Withdrawing All Assets From the Global Banking Slavery System | Zero Hedge
- 11 Revolutionary ways to celebrate your independence from the system on this July 4th (truth11.com)
- Freeman DeFacto “Fighting For a Lost Clause: The Case for the Sovereign Individual” – Revised (littlemargaretnan.wordpress.com)
- I am now a ‘Slave’ to Computer Money (digits) and our Central Bank! (kingdomecon.wordpress.com)
- Meet the Elites Inside the $4 Trillion Global Powerhouse Bank of JP Morgan Chase (alternet.org)