This is not funny “ha-ha.” From Charles Hugh Smith at oftwominds.com:
We can also predict that the next round of instability will be more severe than the previous bout of instability.
Everyone is in favor of “doing whatever it takes” to “restore financial stability” when the house of cards starts swaying, but funny things happen on the way to “Restoring Financial Stability.” Whatever “emergency measures” are rushed into service to “stabilize” an inherently unstable system resolve the immediate problem but opens unseen doors to new sources of instability that eventually trigger another round of systemic instability that must be addressed with more “emergency measures.”
These unintended consequences proliferate as policy extremes are pushed to new extremes, and “emergency measures” become permanent sources of the very instability they were supposed to eliminate.
As @concodanomics recently observed on Twitter: “A major flaw of finance is that it nearly always mutates the very instruments meant to protect investors into crisis-inducing time bombs.”
Another major flaw in finance is the self-serving pressure applied by politically influential players to “enable innovation,” a.k.a. new opportunities for skims and scams. The usual covers for these “innovations” are 1) deregulation (“growth” will result if we let “markets” self-regulate) and 2) technology (generating guaranteed profits by front-running the herd is now technically possible, so let’s make it legal).
Broadening the pool of punters who can be skimmed and scammed is also a favored form of financial “growth” and “innovation.” “Democratizing markets” was the warm and fuzzy cover story for enabling everyone with a mobile phone to dabble in risk-on gambles with margin accounts (cash borrowed against a portfolio of stocks).
STRAIGHT LINE LOGIC 