President Herbert Hoover, May 1, 1930
"The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickled down. Put it uphill and let it go and it will reach the driest little spot.
But he didn't know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night anyhow. But it will at least have passed through some poor fellow’s hands.
They saved the big banks, but the little ones went up the flue."
Will Rogers, 5 December 1932
“The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil.”
John Kenneth Galbraith, The Great Crash of 1929
It was a risk on day, as the algos shook off any concerns and went into 'up mode.'
Big cap tech pushed to a new closing high.
But less noted in the enthusiastic commentary from the spokesmodels for Wall Street, the broader market continues to lag, badly.
The Russell 2000 still is not confirming this move. I direct your attention to the first chart below.
This greatly undermines the hypothesis that this 'stock rally' is signalling that The Recovery™ is here at long last.
More likely, this is La Bubble Partie Trois.
Smells like another new era, and an inflation in paper financial assets as the Fed and the pampered politicos spread the new monetary wealth— upwards to the favored few.
And some would give them yet even more freedom to print at will to solve our problems. And this would make them suddenly virtuous how?
They have created enormous sums of money, and it continues to be misspent on nonsense for the benefit of the sectional monopolies like Big Pharma, Big Healthcare, Big Tech, and The Banks.
There is unrest bubbling under the surface of all of the major Western economies, from the US, to the UK, to France, and even stoic Germany.
"The American economy increasingly serves only a narrow part of society, and America's national politics has failed to put the country back on track through honest, open, and transparent problem solving. Too many of America's elites-among the super-rich, the CEOs, and many of my colleagues in academia-have abandoned a commitment to social responsibility. They chase wealth and power, the rest of society be damned."
Jeffrey Sachs, The Price of Civilization, January 2012
Have a pleasant evening.