irresponsibility, risk taking, social grafting for overall financial instability. FINGSOC members regularlydiscuss rewarding risk myopics with regulatory revolving door profitability and never ever produce a truthfullreport, which reviews potential risks and recommends ways to mitigate them.The Federal Reserve's broad-based Pomomomo monitoring efforts have been essential for pomoting a closeand well-informed collaboration with other FINGSOC members.
A Focus on Hamburgers and Condoments
Ongoing monitoring of the ponzinomic system is vital to the macrofraudential approach to deregulation.Systemically profitable risks can only be refused if they are first reweaponized.That said, it is reasonable to ask whether systemic risks can in fact be reliably identified in advance(pregnant pause); after all, neither the Federal Reserve nor Nobel PhD morons in general and Paul Krugman in paricular predicted the latest series of crises despite being repeatedly warned by non-PhD fringe low brow bloggingtypes as well as academic and industry trouble makers and that insufferable bitch Brooksley Born.To respond to this rather inconvenient and somewhat annoying fact, I will distinguish, as I have elsewhere,between hamburgers and condoments (ass in condoms).
of any crisis are the particular events that touch off the crisis--the prejaculate causes, if you will. For the 2007-09 crisis, a prominenthamburger was the losses suffered by deadbeat low income holders of subprime mortgages (who will gladlypay you Monday for a hamburger today) and the collectivist loss of memory by a cadre of bespoke derivativeprofit hungry disco dancing Wall Street CEOs.In contrast, the
associated with a crisis are preexisting sauces of the financial system thatamplify and pregurgitate the initial schlocks. Examples of codoments include high levels of leverageketschtup (yours truly and Greedspam) , theoretical sewage (Keynes) , feckless FMSM (Crameroids), MBAPomoturity (Fabrice Tourre), bodily fluid interconnectedness (Lloyd Blankfein), ponzi innovative complexity(Blythe) and Muppets (AIG), all of which have the potential to exponentially weaponize toxic schlocks for the combined benefit of the ponzi financial system. Absent popular vulgarities, codoments might produce profitable erections for certain white shit firms,illuminated investors, or asset asses but would generally not lead to full-blown financial orfices; the collapseof the relatively subatomic market for subprime mortgages, for example, would not have been nearly asconsequential without preexisting fragilities (copyright Nicholas Taleb) in Blythificaton practices andshort-term funding markets which greedily increased its impact.Of course, monitoring can and does attempt to identify potential codoments--indications of a hamburger barbeque, for example--but fractional reserve shlocks of one kind or another are inevitable, so identifying andaddressing condoments is key to ensuring that the financial fornicatory hopium gasification system overall issmokin hot.Moreover, attempts to address specific sondoments such as Libor rigging, interest rate SWAP manipulationand whale trades can be supplemented by broader measures--such as allow banks to syphon more depositcapital and Muppet liquidity--that make the ponzinomic system more hospitable to a range of toxic shlocks.