The Oligarchy always wins a trophy…
WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen is calling a meeting of top financial regulators this week to discuss market volatility driven by retail trading in shares of GameStop Corp , silver and other stocks favored on social media.
Yellen will convene the heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, the Treasury said on Tuesday.
Yellen sought and received permission from ethics lawyers before calling the meeting, according to a document seen by Reuters, along with clearance to engage on wide-ranging issues in the financial services industry.
Yellen's decision to seek the waiver followed a report here by Reuters that because of speaking fees she was paid by a key player in the GameStop saga, hedge fund Citadel LLC, she may need permission to deal with matters involving the firm.
By JM Hamilton (2-6-2021)
A couple of years back, among the more eye-opening events from my son’s five-year-old leagues was hockey lasted nine months; and in Tee-ball, everyone goes to bat and at season end, everybody wins a trophy.
Of course, America’s billionaire class and elite are a lot like that. No matter how many times they lose, they always win. No matter how many times they go bankrupt or give horrible counsel or forecasts, American elites always seem willing to turn the other cheek and bailout the plutocracy, ad nauseam. But ordinary Americans are never extended this courtesy, there is no second & third opportunities. Break the law, do not pass go; in fact, go directly to jail. Lose your job, because Wall Street trashed the global economy with swaps & derivatives… that’s too bad.
Which might explain why America is in a terminal state of decline and entropy. We celebrate & give tons of taxpayer money away to losers.
In 2008, when the US banking system crashed, there was a mad rush to bailout the banks and insurance companies. The economic pain inflicted was unbearable and your humble blogger would argue, America never fully recovered. Did any Wall Street CEOs go to jail? Not a one, and thanks to bailouts some of these individuals went on to become billionaires (thanks to the US taxpayer). In essence, C-suites & boardrooms won trophies for being losers; but worse, they won trophies for being connected and tapping into government sponsored socialism - for the 1% - worth trillions.
Same thing happened in 2020 with a preemptive bailout, but with significantly less media attention. Hyper-leveraged companies, engaged in financial engineering (that is, shareholder and private ownership enrichment & looting) were bailed out yet again, by the US taxpayer. Under the CARES Act, congress authorized the Federal Reserve to print up $4.4 trillion to bailout out Wall Street, prop up Zombie corporations, and give private equity royalty a free ride. They would all get another turn at bat with taxpayer cash raining down upon their heads, conveniently, with no questions asked and zero scrutiny.
Meanwhile, Congress – who voted their stock portfolios a bailout last March, under the very same CARES Act – bickers and feuds as to whether or not to give ordinary Americans a $2000 check, during the worst crisis since the Great Depression. Surprise, suddenly the deficit is a problem, but no one mentioned the deficit when Congress passed the March bailout. See how the system works? As for the connected and powerful, well nothing they do ever comes under scrutiny… billionaires & moral hazard are never mentioned in the same sentence within the mainstream media. When in fact, billionaires and multinational monopolies are moral hazard.
There is no lengthy debate. There is no discussion – or action - on antitrust enforcement, caps on leverage, reforms, or the growing number of zombie companies weighing down the US economy. Quick. Get out the fire hose of exorbitant privilege and spray America’s royals down with trillions in cash and pronto. But if we want to spend a dime on Mary & John Q. Public, well, that’s worthy of months of discussion, haggling, and throttling any aid or assistance.
America’s system is so rigged and fraught with corruption in favor of the one percent that – like Tee-ballers - they can’t lose, let us count some of the ways.
Campaign finance… US politicians are essentially on the payroll of major corporations in ways too numerous to count. See stock market, dark money, and the revolving door. And all it costs American politicians is their soul.
Captured regulatory bodies: These institutions aren’t there to protect the consumer or public. US regulatory bodies are there to protect - and run interference for - the very corporations they are, allegedly, supposed to oversee.
The US tax code: If you’re rich, who needs offshore havens.
America’s structurally defective government, which all too often makes a mockery of representative democracy. Here, see a gerrymandered senate, the electoral college, a thoroughly unaccountable Federal Reserve, and SCOTUS.
Wage slavery: Want to pay your employees starvation wages… the US government has multinationals and billionaire corporations covered. The government will backstop employees, who are a paid a nonliving wage, with food stamps and just enough minimal support, so that major corporations can tack the subsidy directly to their bottom lines.
Want to back the political party of fringe conspiracies, toxic racism, and insurrection & coup with campaign contributions? No worries. To date, there has been zero mention of holding Trump’s financiers and political backers accountable for the rebellion at the capitol on January 6th.
What really connected the ‘everyone wins a trophy’ analogy with the billionaire class was watching the recent blowup over the GameStop trades.
Since last March, the US stock market has been juiced to the gills with taxpayer money, courtesy of the Federal Reserve. The run up has been extreme, business & economic fundamentals entirely ignored, and zombie corporations and in particular, private equity, have been -preemptively- bailed out financially in ways too numerous to count. Wage & wealth inequality have skyrocketed. We used to call the stock market a casino, but I’ve come to believe it more closely resembles a money laundering operation. That is to say, the debt & stock markets launders/sanctifies taxpayer funded welfare for the privileged. Wall Street CEOs receive front page headlines for hitting can’t miss earnings targets and for what, watching the Federal Reserve dump trillions on Wall Street?
Of course, none of this is worthy of review by US regulators: The FED, Justice Department, the Comptroller’s office, FTC, SEC, the CFTC, etc. It’s all good.
And yet, the second mom & pop investors turn the tables on Hedge Funds – essentially, executing the very trades Wall Street has been playing for years – we have a full-blown crisis. A crisis that calls for a thorough review and discussion by all the major regulatory bodies and the newly minted Treasury Secretary. A Treasury Secretary who had to obtain legal permission just to review the situation, because she took $800,000 in speaking fees from Citadel LLC … the very hedge fund that is partnered up with the Robinhood trading app, used by the aforementioned mom & pop investors to defeat & democratize Wall Street.
Hey, who’s robbing who?
We could go on and on, but the Flames are playing the Oilers… potentially, a highly combustible event. Hockey, I’ve come to love it. It’s equal parts demolition derby, figure skating, and lightning on ice. And the athletes are both gifted & passionate.
Not everyone wins a trophy in the NHL. There are no billionaire snowflakes in hockey, at least not on the ice.
Copyright JM Hamilton Publishing 2021
