Dear William,

In the everything old is new again theme, a few links, based on that theme and recent newsish events that lack any clarity or significant value.  Economics Historian Gavin Kennedy  paper on the history of the meaning of Adam Smith's omniscient Invisible Hand in context. The Chicago Plan  for banking reform in the aftermath of the Great Depression. Commodity Futures Modernization Act of 2000  the final piece of legislation that cloaked any hope financial markets transparency. Talk by Paul Krugman called Keynes and the Moderns  due to the quantity and quality of titles recently available to me that are by or about Keynes I have become enamoured by him.  The parallels between then, the early 30's, and now are incrediblethe only thing missing are a few good men like Keynes, FDR, Pecora and others who were less enamoured with maintaining the primitive orthodoxy that has now as then failed us.  As Keynes had said then, "Half of the copybook...

A wonderful piece by Joe Nocera  on the passage in 1933 of the Glass-Steagal Act that split banking in two and helped maintain banking stability for the next 70 years.  When the history of this crisis is written the repeal of the bill in 2000 will rightfully be understood as the primary policy change to facilitate the collapse. By allowing banks to use deposits, federal insured by the government, to invest in various contrived forms of securities like credit default swaps.  Remarkably and despite the best efforts of organisations like the Roosevelt Institute in conjuntion with strong historical proof, a return to this cornerstone of finacial stability is not even under consideration.  With the net effect of allowing banks to bet on what ever their "genius" conjures up will provide for the greatest return and generally inflating the price at your expense.  Where else would their profits come from?

This week in commodities speculation fraud   as reported by Bloomberg.  Who was the culprit? Goldman Sachs NEVER.  According to reports by t he ICE committee that fined Goldman for the offense “considered the behavior of Goldman Sachs and its client to be a clear case of disorderly trading, in that the distorting price impact of the placement of such large orders in close proximity was not considered.”   Please note, this behavior which amounts to commodity price distortion, outside of actual cost hedging, always has the net effect of costing people and the economy more when we allow to persist. 

Bill Gross,the billionaire founder and co-chief investment officer of Pimco, is pissed. The Fed, in an attempt to get money off the bench and into the economy, has the nerve to maintain artificially low bond rates and it is costing Bill greater returns. Something must be done damn it, or he is going to have to invest his money somewhere else. The perception of US policy action in this supposed evil plot consists of the Federal Reserve purchasing massive amounts of bonds resulting in artificially low interest rates.  These low rates effectively serve as a tax on savers, providing potentially net negative yields over their term when factoring in the inflationary bogey man, and in turn, making Mr. Gross very angry. While Gross has an enviable track record at Pimco, (and I personally admire him, especially his investment outlook podcast with its fabled, moral based explanations) his interests as an investor, without heed for employment or wider economic concerns are misplaced when it ...

Bloomberg's Caroline Baum in a recent column titled  Economy's I-Told-You-So Naysayers Hold a Reunion  is clearly in need of some factual content review and correction.  The column is proof positive of the continued  failure in what passes for economic reporting that was complicit in the financial fraud pulled on economy and its citizens in 2008.   Baum begins her puppeted piece by regurgitating the same old failed assumptions, "Higher  interest rates , burdensome taxation, and intrusive rules and regulations all act to slow growth."   Not only were these reasons at their lowest historical levels or the least "burdensome" on economic activity in the run up to the recession.  They are still the primary culprits for continued sluggish growth as a result of commodity speculation, threats to government insolvency and continually poor regulation.  No mention of a few that actually do impact economic growth and are the primary causes for...