Wall Street vs. Main Street, and also economic robustness vs. fragility

First, a, 1,000-point drop, as in Monday's, on the Dow Jones isn't THAT big. Yeah, 4 percent.

But, I"m old enough to remember the 1987 plunge, and plunge it was. The 508-point drop on the biggest day, as a percentage of the Dow, was far larger. That drop, of 22.61 percent, was also far bigger than any single day's drop during the 2008 financial crisis, though not part of the same type of trend. See Wiki for more, including that Monday's drop didn't even make the top 20 for worst one-day declines. I suspect it doesn't even make the top 40. In fact, the whole set of drops from late last week through Mondy

Second, the market is overheated. This is the reverse of gold going through the roof shortly after Obama took office and anybody with a brain knows that.

Third, Wall Street is not Main Street. Unfortunately, all Republicans, including small-town Main Street ones, I think think that it is. So do a majority of national level Democrats.

This is doubly true when trading is all computer-driven.

Fourth, job quit rates hit a 17-year high last month. Wall Street got butt-hurt over possibly having to pay employees more money.

Fifth, I've said for more than a year now that I expect a recession, probably by the end of this year. And, it may not be bad, but it doesn't have to be bad to be bad.

Despite Republicans, and perhaps grudgingly, perhaps not, centrist as well as conservative economists touting the current economic robustness, it ain't.

Nine years after the big crash and we're just now getting the "upward pressure on wages" that Wall Street purportedly hates.

The current drop is indeed just a correction, not a bear market. But that doesn't mean the Dow will stay here. One thing that will result from the Fed moving interest rates up is that the Dow will naturally fall further as other investments gain attractiveness. Whether Dow doublers-down make the Dow's longer, larger readjustment into a recession cause celebre I don't know. If they do, it's their fault. To riff on Chris Tomlinson, traders and companies have gotten drunk on cheap money.

But, I think a recession is still headed here for other reasons. And, even if it's not bad, per two paragraphs above, we don't have a robust economy. Even a mild recession will hurt hard, given continued growth in income inequality that happened under Obama's watch.

Your dumb Facebook #meme of the week: "mysterious" #bankster deaths

Maybe at some point, I'll either unfriend more people on Facebook, or else directly confront more of their ideas, but for right now, I have the idea for a new, occasional, thematic blog post series.

This week, we address the idea that big bankers are supposed dying "mysteriously."

Supposedly, a whole 36 did so last year. And, we're up to 3 this year! So says ... Natural News!

And, hold your horses! Banks have $680M of life insurance on employees payable to the banks, not the families.

First, 36 deaths in a year in a business that employs as many people as banking? Not much more than stastistical error, whether mysterious or not. And, by that count, we should be up to 15 this year, not three.

Of course, when Natural News, or American Thinker (homepage, can't find exact link referenced) — an anti-medicine conspiracy site and a junior semi-wingnut conservative political site, respectively, are among your sources, you've got problems right there.

As for all that life insurance?

All sorts of companies across the US regularly take out life insurance on their employees as a corporate investment. For doorknob's sake, my small newspaper company has a policy on me. I don't know about Wall Street on Parade in general, but I suspect that it's into seeing conspiracies where none exist.

Worst of all, the person who posted all of this identifies himself as a rationalist, presumably meaning a skeptic.

You might want to start being more skeptical about yourself. (And, no, the links he posted didn't look like he was challenging their claims.)

Let's not just blame #MBA grads for our hypercapitalism

Forbes has a good column about problems with manufacturing companies, specifically high-tech ones, focusing on the bottom line, even to the extent they "part themselves out" more and more.

It primarily blames business schools and MBAs for this problem, but that's not the total story as I see it.

The problem is far more. It's the physics PhDs who became "quants." It's the computer programmers inventing new programs, and the hardware engineers inventing new computers, to trade microseconds faster based on those quants' ideas, in part. It's the portion of Occupy Wall Street who was tempted to work for those high-dollar jobs before later, after being laid off or never hired, discovering that Wall Street is evil.

Beyond that, I'd argue that the story doesn't go far enough, and goes in somewhat wrong directions. "Continuous innovation"? Sounds nice, but, in the hands of an Apple, becomes instead the groundwork for sped-up planned obsolescence, or, even more *alleged* planned-up obsolescence in the name of addictive hypercapitalism. Steve Jobs didn't have an MBA and neither does Michael Dell. In both cases, they're "leaderly" enough to run their companies in a less hypercapitalist fashion, should they so choose.

And, it's the consumers, driven by often-irrational human nature, who buy into this hypercapitalism, whether it's "Having" to own the latest iPhone, having to have the bigger house, etc., who help cause this, too.

We all need to learn to say "no" to hyperconsumerism more. And we have to be honest about just how embedded in American life it has become.

We need to be paying people more to develop ideas. And contra the Amazon/Apple/Google "infowars" battle, we need to be paying people to more freely share these ideas.

Even against Wall Street, ends do NOT justify means

That includes blatant Photoshopping of an alleged Occupy Wall Street photo, whether for commercialism, Adbusters-type self-aggrandizement or whatever.

It does not include calling the people you call out over noting your fakery "trolls," "vampires" and worse.

It does not include this:

My take is the world is on its deathbed and I would lie cheat, steal, murder and or give my life to save my daughter a place and a healthy future on this planet these banksters are destroying for imaginary profits and what are we going to do?

I know Adbusters is an "official sponsor" of Occupy Wall Street. So is Anonymous.

Well, half of Adbusters people aren't really left-liberal, not nearly as much as they are disgruntled graphic artists mad that top ad agencies haven't hired them. Anonymous? Protest for protest's sake as well as for an actual cause's sake.

The reality? Chris Hedges is right about what happened to speculators 300 and more years ago. But, he omits that there were no democracies then, and that monarchies of various degrees of authoritarianism executed speculators for offending against the state, not against the state's citizens.

And, Chris, your dystopian black-and-white call isn't entirely true, either. You, I and others can "fight back" in other ways. Buy less. Use less. Buy more wisely.

And, the idea that most citizens of the most infrastructure-intensive nation in history, even if they care that much, are willing to take that radical of action? Unlikely. Or to risk a collapse, if the current U.S. state is actually overthrown, of trying to put it back together.

NYT columnist Charles Blow is thinking somewhat similarly, noting the larger issues involved are not a zero-sum game. But, they are serious, and they need focus:

(T)he Tea Party has a specific political agenda. This protest does not. The Tea Party did a great job of channeling anger into electoral outcomes and shifting electoral sentiment....

What political outcome does this protest seek? It would be a waste for them to push back only against corporate enemies and put forward no political heroes. That may further dampen already flagging enthusiasm on the left.

Part of the problem is, as it is self-described, is that it is youth-driven. Youthful energy is good. But it doesn't always have the focus that Blow knows is needed.  And, sometimes, it's just wild "protest to protest" energy.

Nick Kristof agrees with his colleague Blow, and even goes to suggest some specific attainable political goals for the protest. He also, with a bit of on-the-ground anecdote, goes beyond Blow in showing how ridiculously inchoate some of the protest started out as being.

Dear Obama: You can't out-Wall Street the GOP

That is Salon's bottom-line takeaway from word that (former) Obama BFFF Jamie Dimon has been seen palling around with Mitt Romney.

But, it's true. Bill Clinton halfway pulled it off because Gingrich was an idiot and Bob Dole was clueless, plus the Slickster's style was a factor. Now, if Perry gets the GOP nod, Dimon may, if not coming back to Obama, sit on the sidelines. But, if it's Mittens? Dimon is right. Wall Street is all GOP then.

Obama gets tough on the banksters ... deke ... I meant "corrupt"

The part of the headline before the ellipsis points was the header for Glenn Greenwald's column.

Of course, in reality, it's not even close to true.

Rather, as Yves Smith says at Naked Capitalism (h/t Greenwald) ... the Obama Administration is "corrupt" on the whole rotten in American mortgage mess.

No other word for it. The ongoing saga of Team Obama vs. New York AG Eric Schneidermann, trying to hold banksters' feet to the fire as much as Eliot Spitzer did if not more, is intensifying.

As Smith points out, when somebody inside Team Obama says "Wall Street is our Main Street," you know how corrupt the administration is.

There's nothing "new" here as to revelations about banksters' fraudulence. There's no GOP Congress obstructing Obama from doing the right thing.

Rather, his administration is corrupt. And the man himself is halway bankrupt morally.

There's nothing CLOSE to new on Obama's actions. This is the same Obama who willingly let the Democratic National Procurer, Vernon Jordan, parade him in front of a bunch of Wall Streeters way back in 2003 to vet him as suitable neolib presidential material.

So, per my poll in the right hand column, add this together with his warmongering, and how can you not say he's a neoconservative? Not a neolib, a neocon.

Boo-hoo for Wall Street

Big firms may cut a bunch of jobs due to fears over possible new regulations from the Consumer Finance Protection Agency or elsewhere.

Notice that the likes of Lloyd Blankfein, Jamie Dimon, et al, aren't talking about cutting their bonuses.

It seems to me that this is:
1. A warning shot across Obama's bow;
2. More general scare mongeriong.

Tear down the stock market, former SEIU official said

Former SEIU official Stephen Lerner wants to pull a Samson on Wall Street. Per the link, the union apparently canned him over his first raising this as a serious idea.

To be honest, the monkey-wrenching itself, I'm not sure how much that would upset me, or make me worry. The idea that the government wouldn't act swiftly, and with more power, at least at the end, than the monkey-wrenchers, is the issue.

Securitize Wall Street salaries?

William D. Cohan has an idea to restrain greed in the financial sector — securitize top executive salaries:

I propose that each large Wall Street firm create a new security that represents — and is secured by — the entire net worth of its 100 top executives. This security would be subordinated to all other creditors as well as to all preferred and common shareholders; in other words, if a firm goes bankrupt, this security is the first to be wiped out.

Boy, wouldn't that shrivel some gonads at big banking houses?

I'm all for it!

Let's make this one better, though.

Let's let average Joes and Janes slice and dice these securitized salaries, then sell them all over the place. Wouldn't you like to sell part of a securitized salary of Goldman Sachs CEO Lloyd Blankfein to a Chinese sovereign wealth fund?

If Wall Street is a casino, it's incestuous

It's a casino that's rigged, with algorithmic trading on computer the Securities and Exchange Commission still doesn't understand, with the incestuousness of paying ratings agencies for their ratings of sheiss. And, more and worse, as Salon's Andrew Leonard makes clear.

The incestuous part? EU member states know this, too, especially the incestuousness between ratings agencies and the investment banks like Goldman Sucks who sold drossy schlock as alleged 24-K gold.

(So, Lloyd Blankfein, was Moody's helping you do "God's work"?)

Oh, a few Democrats (from the party that outpaced the GOP 2-1 in 2008 election cycle campaign receipts from Wall Street, per Open Secrets) have blathered about reforming this incestuous relationship, but the financial reform bill from Chris Dodd (D-Conn. Man) never did address this.

Compare the EU, which is implementing a new regulatory system for ratings agencies, which goes into effect near the end of this year.

In fact, the concern has been so bad in the Eurozone, politicians are saying, why don't we have a European-based ratings agency?

There have been repeated calls from European policymakers in recent years for a home-grown agency to compete in the U.S. dominated sector but with little progress. Users of ratings, such as investment banks, said policymakers are aiming at the wrong target.

"They should be focusing on getting stability back to the market and a European ratings agency is not going to do that," said Mark Austen, acting chief executive of the Association for Financial Markets in Europe.

The new EU rules being phased in from September will include requiring them to undergo direct supervision if they want to issue ratings in the 27-nation bloc, and two have at least two "independent" members of their boards of directors.

Scott Brown, the GOP and the Dow's drop

Thought for the day: If the Dow is down 550 points in the last three days, isn't this all the fault of Scott Brown's election in Massachusetts? Why aren't Dems pushing this point?

Wall Street looks at legal challenge to bank tax

The possible claim? It would be unconstitutional because it's industry-specific. BS. This is not at one business, unlike the bill of attainder against Acorn. We had a windfall profits tax on oil for decades, for example.

Mencken, Americans and Wall Street

Americans who invest right now in Wall Street, and their investment beliefs, prove H.L. Mencken's adage about American stupidity and betting on it as right as rain. Wonder how many tea partiers still sink major money into the Street?

The latest Obama-Sachs Wall Street ‘socialism’

That “financial regulation reform bill” that’s supposedly starting to work its way through Congress? It ain’t such a thing at all. It would allow Tim Geithner or future Treasury Secretaries to make Hank Paulson look like a TARP piker.

Why? The new bill, which Rep. Brad Sherman called “TARP on steroids” would allow TARP-type bailouts with no Congressional approval and no maximum dollar amount.

As somebody else said, President Barack Obama is a socialist indeed — a Wall Street socialist.

‘Wall Street’ isn’t just on Wall Street anymore – be wary

Almost two-thirds of trading of New York Stock Exchange-listed stocks is done outside of the NYSE. The hiddenness of these “dark pools,” the Securities and Exchange Commission struggling to get up to speed on them, and questions about what, if any, tightening of oversight they will see under President Barack Obama’s proposed financial regulation reform, should scare you. It does me.

The latest Wall Street slickness

Even as the government talks about changes in calculating poverty that would show many more poor seniors, Wall Street is preying on them in new ways.

And, this all as G20 nations still can’t agree on regulating top financiers’ pay.

Artificial intelligence to be afraid of

What if the newest in computerized stock trading leads us into financial trouble too fast for humans to intervene? Do we really want machines playing this level of games with human money — and human work?

‘Responsible stakeholder’ vs. ‘responsible stock issuer’?

The New York Times is right, surely; gone forever are the days in which China would be a “responsible,” i.e. quiescent “stakeholder” in the U.S. economy. Now, the shoe is on the other foot:

The demands that the Chinese let their currency appreciate, clean up their banks or get rid of the subsidies for state-owned enterprises have been toned down.

You do not talk to your biggest creditor that way — especially when you have a record-sized loan application pending.

The rest of the story makes me wonder how much of TARP, etc., is even for domestic consumption. Did Henry Paulson and Tim Geithner bail out their old employer, Goldman Sachs, not so much for Wall Street as for Beijing?

TARP – Wall Street vs. China

The New York Times story on how China is no longer willing to be a “responsible,” i.e. quiescent “stakeholder” in the U.S. economy got me to wondering.

How much of TARP, etc., is even for domestic consumption? Did Henry Paulson and Tim Geithner bail out their old employer, Goldman Sachs, not so much for Wall Street as for Beijing?

But, the Chinese, like the Saudis 15-20 years ago, at the end of the Reagan-Bush deficits run, are stuck.

Wall Street recovery = gas price speculation

Yep, the bailed-out recovery of folks like bipartisan fleece-meister and Obama financial best buddy Goldman Sachs is why gas prices are rising in the face of an inventory glut.

Oh, and speaking of all that, where is the commodity speculation regulation legislation that was being talked about last year already?