Juggling Dynamite

When I was a kid, public gambling was something done mostly in Vegas and Atlantic City. Today it is available everywhere from local convenience stores, to state run casinos and unlimited on line gaming sites. Gambling can be highly addictive of course, and like most addictions, is often socially and financially devastating for participants and their families. (Next time you approach the cash in a convenience store or gas station, take note of the people around you who are scratching and playing different lottery tickets. It is not a pretty sight.) But in present times, the officially sanctioned message is that gambling is ‘fun’ and a way to ‘give back’ to the community. What a mess.

State lotteries claim to be good for education and the general wellbeing of citizens. But are they? Here is a direct video link.

There is a connection between today’s gambling obsession as social pastime and the gambling mentality that also dominates financial market participants. Computers have enabled self-destructive financial bets on a scale never before possible in human history. I believe these trends will eventually be recognized as highly counter-productive and destabilizing for civil society and necessarily curtailed again.

Nothing a 50% decline won’t fix in a hurray…

John Hussman is highly respected for his prodigious use of data and adherence to what it tells him about the state of the financial markets. His regular weekly market commentary is widely regarded as one of the best-researched, best-articulated publications available to money managers.

John’s public appearances are rare, so we’re especially grateful he made time to speak with us yesterday about the precarious state in which he sees global markets. Based on historical norms and averages, he calculates that the ZIRP and QE policies of the Fed and other world central banks have led to an overvaluation in the stock market where prices are 2 times higher than they should be.  Here is a direct video link.

A year ago this month the U.S. Department of Justice announced that the banking giant JP Morgan Chase would avoid criminal charges by agreeing to pay $13 billion to settle claims that it had routinely overstated the quality of mortgages it was selling to investors. But how did the bank avoid prosecution for committing fraud that helped cause the 2008 financial crisis? Today we speak to JP Morgan Chase whistleblower Alayne Fleischmann in her first televised interview discussing how she witnessed “massive criminal securities fraud” in the bank’s mortgage operations. She is profiled in Matt Taibbi’s new Rolling Stone investigation, “The $9 Billion Witness: Meet the woman JP Morgan Chase paid one of the largest fines in American history to keep from talking.”  Here is a direct video link.

Here is the link to the JP Madoff.com site that Ms. Fleischmann mentions as tracking the abuses and settlements of JP Morgan.