18 April 2010

Operator! Operator! I've Been Disconnected

There's been a theme running through the press, both news and pundit, the last while. That theme: disconnection.

The longest running has been stories that Wall Street has become disconnected from Main Street, as if this were a Bad Thing. It isn't, it's a Good Thing. Consider this, both the Great Depression and the Great Recession happened because Main Street waded into Wall Street (or perhaps the other way 'round, either way, they danced together) when it shouldn't have. There is no structural reason for Wall Street to be connected to Main Street. They should be separate, since the stock market is just a gambling den among rich guys, and some poor guys who mostly end up poorer. Buying stocks is NOT investing in company XYZ; it is a bet with some other guy who bets it's smarter to unload the stock in XYZ. Your money goes to him, not company XYZ. People need to understand that buying stocks and bonds in the market is NOT aiding the corporations whose names are on the instruments.

John Paulson, of his self named hedge fund, wasn't named in the Goldman Sachs motion. Why might that be? How could he be disconnected from the matter? After all, the instrument was tailored for his short by him. You heard it here first: SEC will nail him with the criminal charge.

Finally, what of Goldman Sachs, and the rest of the Banksters? They are being roasted for being disconnected from Main Street, yet the Dow and NASDAQ have recovered/risen nicely for a bit more than a year. And the Right Wingnuts fear (since they don't actually produce anything in the economy) of inflation hasn't appeared. How is this possible? Well, inflation is rampant in the stock market, all that bailout and much of the stimulus money, chasing after the (pretty much) fixed amount of stock. If one has kept track of the Banksters' reports, one sees that they're profits are disconnected from their pledge, and the Gummint's assertion, that the bailout and stimulus would be used to support lending to jump start the economy. They haven't done that. They've traded with the money. The self-same money which has boosted the market indexes.

So, GS will do its evilest best to crash the market by curtailing its trading, along with the other Banksters, to punish the SEC and Obama for having the temerity to hold them to the law. Nuke 'em all and start over.

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