Saturday, June 30, 2012

I beileve ...

We believed when we were told that there were weapons of mass destruction in Iraq and that there were massive troop buildups on the Saudi border.  There weren't.  More than 200,000 died.

We believed the government knew what it was doing when it legalized the derivatives marketplace.  They didn't.  More than 1,000,000 starved following the world market crash in '08.

We believed the president when he told us that the Gulf of Tonkin incident was an attack on the U.S. Navy vessel.  It wasn't.  It never happened.  He knew it.  More than 3,000,000 died.

We've believed that supporting Pakistan will make sense in the long run, that bailing out AIG is a good way forward, that balancing the budget is unnecessary, that ....

The above statement circulating on the web is an interesting expression of the deep dissatisfaction many now feel toward national and international leaders.  Do they share our goals any longer?   Are they constrained by ethical considerations?  Or do they, as it so often appears, serve the rich and influential few at the deadly expense of the majority?

Note: Despite government involvement after the catastrophic market crash of 07' - 08', JP Morgan Chase this year managed to lose around 9 billion in a single transaction in the credit derivatives market.  That's investor's money they lost.  Their risk model (betting strategy), like all gambling tactics, couldn't cover all the possible failure points.  Beyond that, they're under investigation for manipulating the power/energy market and for pressuring their customers into their own under-performing and expensive mutual funds.  These are some of the folks our government supports, bails out, and backs.  With more than $2,000,000,000,000 (trillion) in financial assets, JP Morgan Chase is larger than the economies of all but 10 or so of the world's countries (GDP, GDP-PPP).

Have things changed since '08 so that we might breathe a little easier?  No.  And has the government reasonably and adequately addressed the issues involved?  No.  It's no longer just investors who are harmed by such practices.  The size of the market for which JP Morgan Chase, Merrill Lynch, and others hold the reins is such that the world reels when they make a mistake.

 The world of banking, it’s becoming clear, operates according to different norms from those of the rest of the business world.