Thursday, June 25, 2020

Wow! Moral Hazard (and Cronyism) To the Extreme!

Well, folks, suffice to say that the powers-that-be are not only committed to preserving the bubble, but to inflating it even further in the process.

Now, don't get me wrong, I love a stock market rally just as much as the next fella; our core portfolio went from red to green on the newsflash below. But, frankly, this is moral hazard (egregiously dangerous and irresponsible, not to mention crony [hugely benefits Jerome Powell's old neighborhood [private equity]) to the absolute extreme: 
"The Dow Jones Industrial Average traded just above the flatline, erasing a 236-point drop from earlier in the day. The S&P 500 was down marginally while the Nasdaq Composite traded just 0.2% lower.

In their changes, U.S. banking regulators made it easier for larger banks to invest in riskier funds such as venture capital funds. Regulators also relieved banks from having to build up cash safeguards against certain derivatives trades.

Bank stocks rallied across the board on the news. JPMorgan Chase, Bank of America and Citigroup were all up more than 2%. Wells Fargo gained 3.6%. Goldman Sachs was up 3.1% and Morgan Stanley advanced 2.6%. The SPDR S&P Bank ETF (KBE) jumped to trade more than 2% higher."

Not in my wildest dreams! Considering the 2008 banking crisis...



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