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Saturday, July 14th, 2012
no longer reliable

Being away from screens for most of the week, I am trying to catch up on the news.  The phrase “no longer reliable” sums up not only the last five days, but the last five years, the period of time shown above.  Those words jumped out at me from a New York Times story this morning, which said that JPMorgan (JPM) announced “that its earnings for the first quarter were no longer reliable . . . .”

Add that to the list.

On what can we rely?  In whom can we trust?

The news never seems to get better.  Need a rate made up?  Need a mark on a position?  Need to doctor statements and fleece customers?  Need to skirt the rules to ring the register?  There’s someone that will do it for you (or to you).

The last five years have dramatically changed the perceptions of the financial industry.  Faith in the system has plummeted and everyone in charge wants to keep playing the familiar games, from the banks and brokers (same thing, these days) to corporate leaders to investment managers to regulators to politicians.

Ironically, those that seem least involved (corporate leaders and investment managers) have a tremendous amount at stake and are most able to force change in the financial system, but they are so entwined in the status quo that they can’t bring themselves to do so.  One wonders what it will take to wake them up.  (Chart:  Bloomberg terminal.  XLF is the Financial Select Sector SPDR Fund.)