Its becoming quite clear to realists throughout the monetarist camp that overt accommodation as formal central bank policy has failed. Without possessing overt prescriptive policy resolutions to ‘clean up’ insolvent banks, the dominant political classes are left with moribund institutions, permanently weak balance sheets and political anxiety reminiscent of the 1930’s. Talk of secular stagnation remains a canard, for Keynesians and collectivists of all colors seek to ameliorate conditions they thought were under their control. Turns out the sphere of autonomy underwriting civil society can’t be shoved under a positivist procrustean bed. The question lingers, why can’t central bankers and their elk throughout the social sciences drop the harbinger of non-euclidean math and face political facts. 1989 happened. The collectivist’s lost.
What has this to do with Deutsche Bank?
Turns out, quite a lot.
Two points to ponder. Why did Deutsche Bank buy U.S. Federal Reserve toxic securitized assets and what justification served to ameliorate Merkel’s resolve that Syrian refugees in Germania would never see a reckoning.
What Merkel has done is trade one crisis for another. Now she’s got both and no possible resolution in sight. This is why statesmen demonstrate leadership. Deutsche Bank’s ability to revive moribund assets isn’t realistic, and governments no longer possess leverage to “paper-over” dysfunctional policy. What we’re witnessing with central banks across the globe is political suicide. We’re witnessing an entire proprietary class kill themselves in service to defunct political ideals. Germania indeed.
The lower bound policy bench marks set by central banks renders them unable to meet stringent capital standards. Entire portfolios aren’t performing and public animus is rising. We’re one incident away from an enveloping crisis that has no resolution: insolvency.
Here’s an idea: end the rent-seeking subsidies, drop the regulatory/financial repression in service to collectivist ideals. Allow working people to get to equity, capital formation. Drop the pretension in the superiority of a neoliberalism shot through with collectivist pay schemes that only service the dominant political class enforcing them.
Try the moral superiority of Capitalism.