The bank lobbyists have the champagne out – the Brown-Kaufman amendment, which would have capped the size and leverage of our largest banks – was defeated in the Senate last night, 33-61. Simon Johnson
Mr. Johnson describes the pro-TBTF (Too Big To Fail) "victory" in a Pyrrhic sense and suggests their opponents, like Wellington, have fallen back to Waterloo.
It's an apt metaphor. Yet, I think the situation may be more dire than that (as, I suspect, does he, after all, we commentators only have so much time to mine for metaphors).
Just prior to the French Revolution of 1830, Talleyrand attended a ball, at which, he was reported to remark, "We are dancing on a volcano."
Moving back in time a few millennia, the flourishing Minoan civilization, inhabitants of which, ironically, liked to leap over bulls, actually were dancing on a volcano, on the island of what is now called Santorini. I don't know if the bull leaping was a mental reflection of their life on the volcano-beast but that beast did erupt (sometime around 1600 BC) and gore their civilization.
There are two aspects to the current volcano- popular unrest, such as was evident in Greece this week (discomforting, related note: one in 5 American men between 25-44 is unemployed) , and the increasingly volatile financial markets themselves. TBTF lobbyists, like the Minoan bull-jumpers, are engaged in risky business, risking both populist anger, and an eruption of the financial volcano (might rising market implied volatility be seen in a tectonic light?).
Those of us watching the spectacle, in delight, admiration, trepidation or horror, (depending on perspective) from afar may soon find, like the Minoans, worse things- deeper, more profound things- to fear, than the bulls.
Some might wonder if it would have been better to dance on the volcano as it erupted instead of, like the Minoan survivors of the eruption and resultant tsunami, trying to pick up the pieces afterward.
We'll see, soon enough.
Or not. After all, this is just a metaphor, my attempt, in a sense, to dance on the volcano, which may, in the event, not even exist (but my gold investment- my bet on the volcano- is an attempt to stay well clear of "Santorini")
Here endeth the mind-bending Minoan metaphor. Next week (hopefully) I'll get back to more con-Crete (couldn't resist) analysis.