Stocks fell sharply in morning trade despite little real news. Sometimes it is the seemingly innocuous events such as the Democrats Massachusetts election loss that is the catalyst for large shifts in perception and by implication the markets.
In economic news the Conference Boards Index of Leading Economic indicators gained 1.1% in December. The Philadelphia Fed Manufacturing Index slipped 7.3 points to 15.2 in January. Initial claims for unemployment jumped 36,000 to 484,000 during the latest week.
About that catalyst, populist anger is high and rising in America compliments of the current fiasco and bankster bailouts. It was seen during Obama’s election and again in Massachusetts and I imagine will be demonstrated in spades come November, because your average American is sick of the status quo. Which brings me to the latest round of tough talk out of Washington concerning the banksters as there has been precious little concrete action to date.
The proposal by the Obama White House to apply not just a financial responsibility tax on the too big to fail institutions but also to restrict the lines of business they can pursue separating commercial banking from investment banking and further tightening the rules on market share. As the continued revelations about the NY Fed’s role in covering up the AIG derivatives payments scandal or to quote James D. Cox, Duke University professor of corporate and securities law.
“This has been terribly mishandled. There’s this pattern that emerges that the New York Fed, for a variety of reasons including not causing nervousness about who was an AIG counterparty, covered up its rather heavy-handed approach to the bailout.”
Following 4 rounds of AIG regulatory fillings that include more than 1,000 redactions.
Which continues to demonstrate that the financial sector desperately needs to be reined in through both regulation and the curtailment of their lobbyists influence. That said to date the lobbyists have demonstrated unequivocally who calls the shots and it isn’t our elected representatives.
Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact. 
