All Hail Our New Lord and Master, the Stock Market

The all-powerful Federal Reserve is a mere minion of the stock market, a kitten absurdly claiming in public to be a tiger. If the market threatens to drop, the Fed quickly prostrates itself and does the bidding of its Lord and Master: “No rate hikes, minions!”

By cowering in terror of a stock market tantrum, the Fed has surrendered everything: its vaunted (and completely phony) independence; its duty (yes, go ahead and laugh) to the nation and the real economy–everything.

The Fed is nothing but an abject slave of the market. It masks its servitude with Newspeak, but the reality it has only two choices: burn the market down with a series of rate hikes or surrender completely to the market, relinquishing any pretense of power or control.

The Fed is not alone; the entire financial-political system is now beholden to the stock market.

Want to impose real restrictions on the financial sector? Forget it, Congress–the market will rebel. And if the market sags–you’ll cave in like all the market’s servile minions because a significant chunk of your campaign contributions come from those profiteering off the market.

Corporate America–don’t dare miss your quarterly earnings number or you will suffer the wrath of a market that destroys all who don’t obey its demands for short-term profits at the expense of long-term profitability. Were the management of a public company bold enough to sacrifice short-term profits for long-term growth, they wouldn’t survive the market’s destruction of their stock price.

The stock market now dictates fiscal and monetary policy within the Empire because the American economy has been fully financialized. Profits flow not from innovation in products and services but from the financialization of every income stream.

While definitions of financialization vary, mine is:

Financialization is the mass commodification of debt and debt-based financial instruments collaterized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage.

Another way to describe the same dynamics is: financialization results when leverage and information asymmetry replace innovation and productive investment as the source of wealth creation.

When the profits from financializing collateral and leveraging those bets to the hilt far exceed generating wealth by creating products and services, the economy is soon hollowed out as the perverse incentives of financialization start driving every business and political decision and strategy.

Even Darth Vader now takes orders from the stock market:

We’re all minions now of the stock market. All hail our Lord and Master, the stock market.

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  • Oct 29, 2015 Sharp Slowdown Seen in US Economy as Inventories Pile Up

    Economic expansion in the US slowed dramatically in Q3 as most businesses opted to store raw materials instead of increasing manufacturing output due to the weak factory gate inflation and sluggish demand.

  • Diogenes Shrugged

    People have to put their “money” somewhere, and people with a lot of money and power appear to have tied-up a lot more in the stock market and real estate than in precious metals and rare Pokemon cards. Super-rich people aren’t the only ones able to see that no matter where you’ve parked your “money,” it won’t be worth much later on when you go to sell if nobody else has enough “money” to buy whatever you parked it in. So, with Ponzi schemes reaching maturity and populations of greater fools declining, the powerful are exposed as increasingly resorting to the only remaining wealth-preserving strategy: criminality. Via all conceivable manner of fraud and theft, they artificially provide what APPEARS to be a burgeoning market for their stocks and real estate, buoying prices and enabling them to still feel “super-rich.” Once that plan runs its course (i.e. once these parasites exhaust their hosts) they plan to murder us in myriad creative ways. Actually, they jumped the gun and commenced with that final solution many, many years ago. Feel free to complain to your congressman about all of this, but do remember: even the cow that moos the loudest still gets funneled into the meat packing plant. Heaven forbid that the cattle ever find a gun.

  • colinjames71

    Except they’re not nearly as cute and adorable as THOSE Minions. Possibly less coherent, definitely more inept, and just as bungling.