Friday, May 11, 2012

Bonny-Part, We Need You Now

When rabbits are set to guard the carrots and dogs the freshly sliced steak, be sure that something is badly out of joint. There is the Volker Rule: banks must not engage in trading with the deposits in their banks. It was proposed in 2010 but is still not law. It’s passage is projected to September, but I wouldn’t hold my breath. Furthermore, its sway only touches federally-insured deposits. It does not prohibit trading in derivatives, does not outlaw hedge funds, and do other sensible things that would restore sanity to the finance sector. The time approaches when we need a Napoleon again—meaning that these things are resolved by someone who commands real force. Meanwhile we’re entertained by continuing news of chaos form that sector—today a kind of meltdown at JP Morgan Chase, traceable to those old toxic assets, once again, and to the insane gambling fever that goes by such hallowed named as investment and liquidity, and such. Liquidity? The Fed is supposed to provide that. We don’t need the help of gamblers. Investment? The stock markets are bad enough. I don’t like men on horseback, even little men with tri-cornered hats. But my wishes are horses, and Napoleon is riding one of them.

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