Judging from recent reports that JP Morgan Chase & Co. (JPM) Chief Executive Jamie Dimon and Citigroup Inc. (C) board member Robert W. Rubin will forgo bonuses this year, it appears that at least some U.S. executives are starting to change their habits, as we’ve long suggested they should.
The typhoon of commentary that’s blown around the world a step behind the financial tsunami that’s wrecking everything, two little words have been curiously absent: “fraud” and “swindle.” But aren’t they really at the core of what has happened? Wall Street took the whole world “for a ride” and now a handful of Wall Street’s erstwhile princelings have shifted ceremoniously into U.S. Government service to “fix” the problem with a “toolbox” containing a notional two trillion dollars.
Central bankers are busy perusing their inflationary policies. Worldwide money supplies are increasing at about 20 percent a year. But deflation seems to be winning the battle against inflation. Gold is down to $818 an ounce. Oil is in the doldrums. It’s at just under $114 a barrel. Why are prices dropping? Because the global economy is contracting, says Bill Bonner…
It took a sub-prime/credit/derivatives debacle to make it happen, but it’s finally starting to dawn on some people that you can’t build a whole economy on the practice of moving money around.
The sub-prime catastrophe has spread far beyond the United States. Certain foreign banks have already been swept up into this sub-prime mess. And it’s hardly beyond the realm of plausibility that more foreign banks could fail.
Things continue to slip, slide, and shift strangely Out There.