Juggling Dynamite

The glaring obvious fix to reckless risk taking and “Too big to fail” financial firms is to cut the line of credit between investment banks and the public purse. Risk takers need to own and manage their own vulnerability like adults. When we are responsible for our own gains and loses survival requires that we manage our risk effectively. Everyone who understands the system and is honest about how to fix the problems, knows that banking conglomerates have to be broken up.  Politicians who don’t support the idea should be rejected.  This issue is foundational to everything else and should be a defining issue in 2016 elections.

On Tuesday, in a speech at the Brookings Institution, former Goldman banker, now president of the Federal Reserve Bank of Minneapolis, Neel Kashkari shocked the cozy club of banksters and their lobbyists with an admission of truth:  “I believe the biggest banks are still too big to fail and continue to pose a significant, ongoing risk to our economy…The question is whether we as a country have the courage to actually take action now.”  See:  Fed’s Neel Kashkari says “banks still too big to fail.”

This morning on Bloomberg, he explained his comments further.  Here is a direct video link.

Here is a direct video link.

Another obvious solution, painfully slow in the dawning! See,  Roofs of big box stores key in shift to 100% renewable energy:

The U.S. has the technical potential to produce more than 100 times as much electricity from solar photovoltaic and concentrating solar power installations as the nation consumes each year. Given our abundant solar resources, America must take advantage of untapped opportunities to install solar technologies—like using rooftops of large superstores and “big box” retail stores as hosts for clean electricity generation.

Some refreshing candor out of the guest in this clip.  Even as the Bloomberg-tainers keep trying to pump sexy and sophisticated ‘plays’, Carnutt doesn’t relent: central bank intervention has broken financial markets, to protect savings one needs to ‘de-risk’ ie., sell risky assets and products…and more central bank tricks from here will further compound problems and risk, not help.

Dean Curnutt, chief executive officer at Macro Risk Advisors, discusses volatility created by central banks and strategies for taking volatility out of your portfolio.  Here is a direct video link.

And as my partner Cory Venable reminded yesterday, although the media circus focuses on oil, it’s actually all industrial commodities that are screaming ‘global slowdown’.

Meanwhile after blowing out to record levels into 2015, margin levels (levered bets in red shown below in inverse scale) have finally rolled over in the past year leaving a glaring chasm under the precariously inflated S&P 500 (in blue). Before this cycle completes, these two lines will change places–as they did in 2000-02 and 2007-09. Imagine that.