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Wall Street: With Endless Free Money and No Real Production, There’s No Limit to How Much You Can Make
The Federal Reserve’s
actions in combating the Financial Crisis have had dozens if not hundreds of
consequences. However, one of the most profound has largely gone unnoticed by
all commentators.
That
consequence of the Fed sending the clear message: incompetence pays.
Consider
that since the Financial Crisis first hit in mid-2007, the Federal Reserve has
pumped TRILLIONS of Dollars into Wall Street. The banks have done what they do
best with the money: funnel it into obscene salaries and bonuses.
Meanwhile, all
of these firms remain bankrupt (thanks to the suspension of accounting
principles no one cares), the underlying issues that nearly took down the
system remain in place, and savers and other sensible folks have been fleeced
due to US Dollar devaluation and future taxpayer obligations.
Remember,
Wall Street is nothing more than an exchange: a place where deals of hundreds
of varieties are made. In this sense it’s nothing more than a corporate-scale
version of Facebook or some other social network platform. That’s it.
Wall Street
doesn’t generate any real goods. It doesn’t produce drugs that cure illnesses.
It doesn’t design cars or vehicles needed to get around. It hasn’t invented
ANYTHING of real value in decades (unless you count make believe crap like
derivatives and CDOs as goods).
No, Wall
Street is a services industry. The service it’s supposed to provide is that of connecting
capital with worthy enterprises in one form or another. However, anyone who’s
lost money in Enron or the thousands of other firms that are publicly traded
despite being outright frauds knows that even this service is BS.
And given
that most folks have LOST money on stocks in the last 10 years (assuming stocks
ever increased their purchasing power to begin with), as well as the TRILLIONS
we’ve got to pay off in the future thanks to the Fed’s bailouts, I’d say it’s
time the US seriously reconsiders just what purpose Wall Street actually serves
in our economy.
Best
Regards,
Graham
Summers
PS. If
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Again, this
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We've seen that massive demonstrations in DC accomplish absolutely nothing, so how about changing the venue? I'm thinkin' that a 1/2 million angry, ignored, unemployed, disenfranchised, foreclosed-on victims descending on Wall Street might send a slightly clearer message to the arrogant bastards.
Man, what a sight that would be!
Wall Street used to produce something vital to a sustainable economy: price signals. But that went out the window in 1913, really slid downhill from 1975 and entered terminal stages in 2008. If money is arbitrary, prices are corrupted and ultimately lose all meaning. (Going, going, Gono!) Hyperinflation in the USD is just a question of time. The Bermonkey has no other choice.
"Remember, Wall Street is nothing more than an exchange: a place where deals of hundreds of varieties are made. In this sense it’s nothing more than a corporate-scale version of Facebook or some other social network platform."
I agree with this statement and thank you for being the only one to give an explanation as to how Facebook could possibly be VALUED at 50 Bn. Everything I have read from Goldman Quacks makes no sense....but this does....the Facebook model could be the ultimate (and legal) insider trading ponzi scheme. Has a new monster been born on Wall Street?
I can envision it now: Friend request to Blythe Masters....accepted.....Facebook page states Blythe is currently interested in "The Hunt Brothers." Oh my, the possiblities are endless...
I call it the "industriserv-inforporno" economy.
I wonder if Graham Summers ever drops in to see the comments on his articles?
You know the country is in trouble when the Gross Domestic Bullshit exceeds the the Gross Domestic Product.
All that money that was thrown into the ponzi game in order to protect a handful of wealthy individuals. They talk about cutting one hundred billion because of the deficits, what about the trillions to the banks. At the drop of a hat we give 750 billion here, 750 billion there, backstop funds to over a trillion here etc. etc.. But you try to get a 10 billion increase in some domestic program for people they act as if your breaking the bank.
All that money that was thrown into the ponzi game in order to protect a handful of wealthy individuals. They talk about cutting one hundred billion because of the deficits, what about the trillions to the banks. At the drop of a hat we give 750 billion here, 750 billion there, backstop funds to over a trillion here etc. etc.. But you try to get a 10 billion increase in some domestic program for people they act as if your breaking the bank.
All that money that was thrown into the ponzi game in order to protect a handful of wealthy individuals. They talk about cutting one hundred billion because of the deficits, what about the trillions to the banks. At the drop of a hat we give 750 billion here, 750 billion there, backstop funds to over a trillion here etc. etc.. But you try to get a 10 billion increase in some domestic program for people they act as if your breaking the bank.
Wall street does nothing but consume, food, water, air and electricity. We need to shut all four down, the economic recovery would begin the day after the big party.
Please do not refer to Wall Street as an exchange. It is a loosely policed online casino. All other forms of online gambling are illegal in the USA. No online Texas hold em for you !! Wall Street used to be Amerika's favorite on line game of chance until the marks found out the boyz weren't playing a straight game.
and how to take out Catastrophe Insurance on the stock market (this “insurance” paid out triple digit gains in the Autumn of 2008).
This sounds interesting, though too good to be true... any comments relative to this "insurance"?
Read "The Big Short" by Michael Lewis. Start with this excerpt from Vanity Fair, it gives you the info you ask for.
http://www.vanityfair.com/business/features/2010/04/wall-street-excerpt-...
Many Thanks for that story Dio, awesome read :)
Read "The Big Short" by Michael Lewis. Start with this excerpt from Vanity Fair, it gives you the info you ask for.
http://www.vanityfair.com/business/features/2010/04/wall-street-excerpt-...
Thanks, read that a while ago, but I doubt Mr. Summers is talking about a CDS..? I will bite the bullet and sign up for the free news letter to satisfy my curiosity.
Importantly, Wall Street was a net exporter of fraud. Trillions of $ of fraud, high and low, in all markets, all the time, day and night. Now if we could somehow work that into the balance of trade equations we'd be phat.
"PUNY HUMANS!!! RESISTANCE IS FUTILE; YOUR OPTIONS WILL BE BACKDATED!"- HFT9000
Are you saying the pod bay doors are still locked?
The disconnect between real value from fiat currency grows by leaps and bounds every day. How else to you perpetuate infinite growth economics on a finite planet?
hedge accordingly.
I think George sums up the overall situation quite well:
http://www.youtube.com/watch?v=acLW1vFO-2Q&feature=related
Classic - a must see.
George railed against conservatives but what he really was pissed about was the "American Dream" phallacy - that red, white, and blue coc* the elites want to shove up the decent white collar/blue collar folks of the country.
RIP George.
This belongs in the Hall of Sock It To Ya.
... who was on the cover of Time magazine December 1986. I'm starting to wonder if Time is just a front for organized crime, cuz they sure do pick 'em.
Wall Street is more than Facebook.
If you have not already noticed...the US is/will be losing its exchanges to other more favorable tax domiciles....
Watch it unfold...
The exchanges are just software...and can/will be in the most tax favored...minimum red tape destinations....
Just a matter of time....
Monetarism...ain't it a bitch?
The tax question is just a b.s. one. Since only in monetarism would it be set up so this could happen.
Without monetarism, they wouldn't have much of a choice.
With monetarism, they can pick fucking zimbabwe if they want to, if zimbabwe wants to give them the lowest tax rate.
What a scam.
Glass-Steagall
American Credit System
Tariffs like we used for 200 years...successfully.
Or free trade which is what has reduced us to what we are since.
It isn't just a matter of time, it's a matter of legislation. End monetarism, you cut this shit out.
But you probably weren't talking *ideal*, and just talking *probable or certain* under this faux system. Which of course then, I would agree with you. As for ideal, being able to levy tariffs on companies that would like less taxes overseas can counterbalance it.
So why move, if there is no benefit?
That's the 64 quadrillion dollar free trade question. If you don't allow it, they can't do it.
So why are they going to do this? Because we allow them to. That is one of the million drawbacks to allowing corporations more freedom than anyone else, to the nth degree. Perfect example. Free trade at it's best. Oh it's so devine, for the game riggers.
Always remember...
If what they have done weren't incompetence...
It could only be criminal.
($50 bucks says Benny and Timmah probably practice those stupid 'sheepish looks' in front of mirrors!)
Heh. "True that". The system is set up to reward the top though. Hedge fund managers, for example, get huge exceptions on when revenue is recognized and taxed.
No such thing as "free money" either...
You hit the nail on the ZerOhead.