TGIF ... and a some thoughts

Yup, and I'm tired. It's been a long week.

Below is a slight modification of an old post from mid 2008 when the Panic of 2008 was getting really bad. I updated it by changing "populist libertarian" to Fraternal Libertarian. For reference, at the time written, the price of oil was about $140 per barrel and the financial market panic was getting much worse - soon to implode completely.

***Old post begins***

Tuesday, June 24, 2008

Speculation is not a Dirty Word

For all my rants against beefers (aka big, evil funds) and oil market speculators, I want to make it explicit that speculation is neither a dirty word nor a dirty business. Everyone should be free to speculate to the extent of his or her desire. That's what freedom means and clearly, being a fraternal libertarian, you expect that from me.

But ...But that means as a person ... not a giant pool of big money. Human freedom is to be exalted, but not groups of big money pools. Those need to be regulated and / or prohibited from trashing crucial financial markets, and overwhelming natural hedgers by their sheer size and thus manipulating prices higher in the same manner as the old "corners" on markets.

And the rich pour money into these pools in the search for "excess returns" and "stable returns". Do they invest in a new oil field ? Or a new mine ? Or in new discoveries ? No. They pour money into financial products and beefers who act as their Vikings to loot more plunder in trading pools. The rich should just find a good broker to pick some stocks and private investments in new mines, oil, or ventures. This layer of beefers needs to be heavily regulated.

Fraternal Libertarianism is a two word concept. The "fraternal" part means that the big pools of money, the ruling classes, must be limited in their ability to raid the common man.

***Old post ends***

Back to now

Later in the fall of 2008, the financial Vikings did destroy the markets. They cause a worldwide panic much like the original Vikings did just after 800 AD. Then everyone had to hide in castles and towers or in the woods to avoid their depredations. Later in 2008, many persons and institutions moved all their money to T-bills and hid, shriveled up and terrified of the raids.

Now the markets have recovered just to pre-October 2008 panic levels. The economy is back to a sort of normalcy, with a huge loss in economic wealth and human capital in the millions of unemployed and underemployed. And it truly did not have to get that bad. The beefer Vikings caused the Panic. If the financial reform bill does not address them, then it will be a failure.

Regulate hedge funds, Wall Street trading operations, credit default swaps. Banks should be banks, not securities trading operations. Any "bank" not making loans should be forced to cease being a bank and lose the right to take deposits.

Money has to circulate in the small towns and cities across ALL of America. Big banks should not suck it all out to play in securities trading in NYC, etc. Regulate all the big money pools much more: make them serve the common man more, and not be used to fund speculation.

Word of the Day

"Genuflect" - verb, intransitive [$10]
Genuflect means to bend the knee.
Sentence: It's time to make the money masters genuflect to the common man; for too long they have acted like lords over all people. Make them submit to stronger regulations that benefit the common man.