Wall Street is just a den of thieves out to scam people – it is nothing but bubbles and Ponzi schemes.
By Daniel at 7 February, 2010, 2:09 am
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Most of the profits they make are either through trading on their own account or thru investments for individuals/institutions. Trading is zero sum game there is a loser for every winner- investor at home is the sucker. As regards institutional investments- it is the 2/20 game– whether you make money or not they will.
Wall Street is the super mafia – they directly pay the law makers to make no rules against them, unlike the minor mafia that simply pays the local enforcement to look the other way. We had this super giant meltdown – zero prosecutions. Trillions in bailouts and Wall Street is again on its old ways.
Wall Street led industry and consumers into the debt clog because they were making money off the transactions. All consumers and industries trusted Wall Street to manage the risk to the financial system of the debt structure so it would not destabilize the system [and they did not]. Intelligent people in Government and the Fed (notably Greenspan and those Congressmen who followed his logic and faith) believed deregulation was followed by increased responsibility by banking CEOs/CFOs for managing risk to maintain system stability. Their belief and faith was betrayed.
This faith the American people and their Representatives in Government had in the virtue of the leaders of the banks was not unfounded. Risk management is the forte of banking CFOs. They are certified through tests to insure they are experts at risk management — and they all know, like you know your ABC’s, that their are three ways to deal with risk: 1) Accept it and be responsible and libel personally for losses; 2) Mitigate it through extreme vigilance and rational management; or 3) Transfer the risk to somebody else.
The bank CEOs/CFOs knew that they were using #3 - transfer all their risk to the Public so that the results would be “heads I win, tails you lose”. They did not manage the risk to the whole financial system as they were expected to do and had promised to do under deregulatory agreements. On the contrary, they betrayed their trust and played the Government and the Public for patsies, for their own gain. Not only did they know their strategy was creating system instability and that others would be left holding the bag, but they continued until the end came — i.e. malice is indicated in the legal sense, and full culpability. They knew they were solely responsible because they were given sole responsibility through deregulatory procedures.
The banking CEOs/CFOs have proven beyond a shadow of a doubt that they are not trustworthy. It is no longer a matter of our deciding to place or misplace our trust. It is a matter of survival for the rest of us that we stop them from playing this fraudulent game. As John Wayne said, “Life’s tough; even tougher if you’re stupid.”
Now, after the whole of American society placed their trust in them and they betrayed us we hear from such characters as CEO Blankfein of Goldman that banks are “not fiduciaries, they are principles” (they are not obligated to operate in the public trust). Why did he not say that when banks were deregulated and the fate of the whole money system was placed in their hands? The reason is simple: they could not dupe Government and the Public unless full trust was placed in them. This was a con game par excellence, and the CEOs/CFOs were the con artists.
The issue is way beyond the question of trust at this point. The only question left is whether they will be brought to justice. The Cuomo indictment against Lewis and Price is the current important legal case: are the bank executives even responsible (libel for due diligence) to their stockholders/owners. That is probably an open and shut case. The larger question of whether they were responsible for due diligence in safeguarding the stability of the whole financial system will come after the Cuomo case is decided — and that should be open and shut also.
Don’t ever trust Wall Street – their interests and investor interests totally the opposite.
- ROBERT WOLFF
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