I have maintained all along that Obama's failure to reform Wall Street will ultimately be not just his downfall but this nation's downfall. Whatever accomplishments he and his supporters think that he has achieved, will be long forgotten when the Idiocracy is rudely awakened from its narcoleptic food coma in the midst of a renewed much deadlier meltdown. Then will come the dawning realization that aside from four new seasons of American Idol, nothing has changed since 2008...
In follow-up to my recent post about safe investing, I was just made aware that this battle to regulate and make safe "money market funds" or as the Economist ironically calls them "cash like products", has been going on since 2009, with only superficial progress at best. Most recently, the head of the SEC has been leading the battle, but she has been out flanked by industry special interest groups and industry stooges planted within the SEC. To reiterate from my prior post, when investors in their willful self-delusion say they are "going to cash", they mean going to a money market fund.
Imagine, four years after the worst financial crisis in U.S. history - still no Volcker Rule to limit banks from speculating with customer money AND still no basic controls to ensure that Money Market Funds, which are false presumed safe by every average investor on earth (even though they failed in 2008 and had to be rescued) - are still not protected.
The icing on the cake - apparently Congress outlawed the Treasury from ever guaranteeing money market funds again, as they did in 2008 (scroll to the end of the article). I mean, why not burn all bridges ahead of time?
My attempt to understand the Idiocracy's survival strategy coming out of 2008
First, bail out Wall Street with no repercussions, giving them extreme moral hazard to continue to propagate their massively leveraged risk taking. Give them even more free money via quantitative easing to further maximize leverage. Keep all of the same laws and rules in place to ensure there are no additional regulations or checks and balances on the financial markets of any kind. Borrow an additional $5 trillion in national debt. Outsource several million additional jobs. Re-elect the same industry stooge policy-makers who turned a blind eye to all of the risks for the past four years. And levitate the entire shit show by printing money. Am I getting that about right? Is there anything else we can do to amplify risks? If not, then per my initial statement above, the Idiocracy has figured out what it should do to survive, and is now doing the exact opposite. Therefore, we are left to presume that economic annihilation is just fashionably late, but should show up any time now.
And while I still maintain that we can "opt out" of this latent fiasco to some degree at this juncture, I can't deny that the collateral damage from the mass extinction of the Idiocracy is going to affect everyone on this planet with the exception of maybe Antarctica and Cuba. The irony of Cuba being the least at risk country by the meltdown of global ponzi capitalism, can't be overlooked.
