Testifying before the Senate Banking Committee today, the treasury secretary told Senator Warren that a 21st Century Glass-Steagall would not break up big banks.
In fact, Steve Mnuchin explained, a break up would reduce liquidity in financial markets.
Illiquidity in financial markets is the defining characteristic of a financial crisis — like in 08-09. This means that treasury does not think integration of commercial and investment banking caused the financial crisis that became the Great Recession.
Mnuchin told Warren that Glass-Steagall was intended to be more aligned with conflict of interest than the risk of credit crises. The statement is pure nonsense and supports the hypothesis that the Trump agenda is the status quo dressed up like populism.
This means that a realignment did not really occur. The populist rhetoric is actually a deliberate fraud!
Treasury’s description of a proper, regulatory regime aligns perfectly with Wall Street’s intentions, revealed when describing the useful value (the currency) of providing liquidity.
Commercial and investment banking is consolidated to use your assets against you, using derivative devices.
This is where the fraud becomes a material fraud with real, measurable consequences (typically described by the perpetrators as being unintended). There is a measurable, criminal intent; but because it is in the realm of political gaming, it is not a crime. We are just playing games with each other, gaming the probability of the fully assumed risk of loss.
Turning your assets into an economic detriment (“the swap”) so that you lose by default (using derivative markets — “swaps markets” — to manage “dark pools of risk” that even the gods do not understand, and so it is the expression of random, unintended events) is a conflict of interest. The natural result, perfectly aligned with the measurable intent, is a credit-default crisis, resulting in consolidation of your net worth (the “credit-default swap”).
It is time to start measuring the motive that actually aligns with the technical means of expressing it!
(See articles, by griffithlighton, on the intending risk dimension and random-attribution error, published on the World Wide Web. See also articles on the Swaps Regulatory Improvement Act.)
The logical fallacy of Mnuchin’s technical description indicates intending the perpetration of a material fraud. When the bad thing happens (driven by events that induce “unforeseen triggers”) it is technically described as having the random attribution of “the big risk” — operating with data so big that only the gods of fate can actually determine it with an efficient causal identity.