SECTION THREE, PART THREE

Sliding Doors: The More it Changes, .....: After a funeral and a wedding this week, it is possible to review both the beginning and the ending of things. Almost a metaphor for the Fed minutes indicating that they are giving serious consideration to "tapering". Again, using social media comments as a guide, and specifically, the Bloomberg news comments, as the litmus test, there seems to be a particularly vociferous view about what the population has been saddled with as a result of Quantitative Easing programmes, and the impact of its unwinding. Equally, the perception that the banks have been unduly supported, and not seen as giving sufficient community regard for being saved by taxpayers, and not playing their social dues for that, seem to scar the debate. The reward patterns certainly appeared skewed against the general public, both in terms of the speed of the transmission mechanisms by which the liquidity events have been noticed by the general worker, and the retiree with interest bearing securities as their main form of financial support, have been particularly damaged by the Fed's insistence that it is equity holders, and mortgage borrowers, who deserve special support. In terms of dictating which groups deserve preference, the Fed has unwittingly elevated arbitrary monetary impacts into the main role for monetary policy tools, and allowing those to operate for an extended period of time. To translate "arbitrary" into a real economy diagnostic, which says that unwinding preferencing policies only after the macro-economic measure of unemployment gets to certain levels must assume that the Fed. has accurately modelled the real economy effects of its created behaviours. Given that QE has always been defined as unconventional policy, means that the modelling could not have taken place. Again, one reason why the Fed should attract opprobrium from the general public. That the bond markets are beginning to more fulsomely gyrate to the uncertainty of the unwinding is about time. But what is left? A bitterly engaged population who perceive a world of winners and losers, and their particularly prism coloured by where they sit on that spectrum...no longer quiescent to the belief that central authorities, and regulators are honest negotiants in the management of an economic system. Five years has been too long to be seen as unequally supporting high finance. JPMorgans energy trading fiasco, and this weeks Goldmans options mispricing event only go to stoke the flames of discord, by re-informing that lawfulness has its own form of being arbitrarily defined. THIS IS NOT GOOD ENOUGH. It is time for the population to become engaged more directly by ensuring that their elected representatives recognise that there has not been enough punishment meted yet to the transgressors for 2007-2009 bad behaviours, and the savings buoys which were doled out so generously. Either justice appropriately, or out of a gun barrel, has been a historical precedent on too many occasions. Civilisation recognises either as valid, if the authorities become part of the problem, not part of the solution.