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Thu, Feb. 26th, 2009, 01:21 pm
Are You Heartbroken For Them? I'm Heartbroken For Them

Stocks declined Wednesday as a late warning from President Obama about stricter oversight for Wall Street knocked major indexes off their highs for the day.

Stocks had pared losses earlier after comments by Fed Chairman Ben Bernanke assuaged concerns about nationalization of major banks but pulled back in the finally hour after Obama's remarks.

The Dow Jones Industrial Average lost 80.05, or 1.1 percent, to close at 7,270.89. The S&P 500 shed 1.1 percent to end at 764.89, and the Nasdaq dropped 1.1 percent to close at 1,425.43.

Obama said financial institutions that pose a serious risk to markets should be subject to serious government oversight, in remarks after a meeting with Treasury Secretary Geithner and others on financial regulation.

"Whenever there is a question about how large the government role will be ... the market doesn't like that," Peter Kenny, managing director at Knight Equity Markets, told Reuters. "As we came close to the bell we got the curveball: Our president came on TV," he said. [Emphasis mine.]
The market doesn't like that? Awww, doesums widdle Wall Stweet not want to be weguwated after FUCKING UP THE ENTIRE NATIONAL ECONOMY?
Too fucking bad. Bluntly, I think a lot of you, if not the lot of you, should be thrown in prison. Greedy bastards just can't stop thinking of profit, can you? If everything collapses, all your "profit" will be worth nothing. Not even tinder -- much of it's electronic.

So. Nationalize the banks, or not? At the very least, I say throw out the CEOs and the two levels of corporate structure beneath them.

Thu, Feb. 26th, 2009 06:36 pm (UTC)

Sometime, catch me offline so I can speak on this topic without leaving a permanent searchable record. (I've worked for Wall Street for the past fifteen years.) Let's just say that I think personal fiscal responsibility would be a very good thing, if strictly, literally, and retroactively applied to the upper levels of Wall Street management.

Thu, Feb. 26th, 2009 06:37 pm (UTC)

Bluntly, I think a lot of you, if not the lot of you, should be thrown in prison.

Because it's much nicer then breaking out the guillotines and putting their heads on pikes all along Wall St.

Fri, Feb. 27th, 2009 12:06 am (UTC)

Although there is a bitter and vindictive part of me that is deeply enjoying that image.

Thu, Feb. 26th, 2009 06:38 pm (UTC)

My gut - which seems to be under the influence of Dr. Krugman - says nationalize. My head spins when I try to think about it, though. I can tell you what's wrong with the banks, but I haven't a clue how to fix them.

I'll also note that apparently there is no banking crisis in Canada. It seems that they have effective regulations and things like rules about who gets mortgages. Once again, we look to our neighbors to the north for models we can study, if not outright copy.

Thu, Feb. 26th, 2009 06:40 pm (UTC)

After seeing how much they (and we) all lost due to lack of regulation, you'd think they would WANT regulation. Sigh.

Thu, Feb. 26th, 2009 06:48 pm (UTC)

Why would they? They got theirs, all safe and tucked away overseas. They could care less if the rest of us starve - there'll be customers elsewhere.
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Thu, Feb. 26th, 2009 06:47 pm (UTC)

Nationalize, no. But I think that the govt should have a seat on the Board of Directors as a minimum for all the money they gave the banks.

Fri, Feb. 27th, 2009 09:01 am (UTC)

The banks can have their boards back when they repay the money.

Thu, Feb. 26th, 2009 06:49 pm (UTC)

There are days, and more of them lately than usual, when I start thinking that maybe socialism isn't such a bad idea after all.

Socialism for everyone, I mean. We've had socialism in this country for years; it's just that in American capialist socialism, the losses get socialized and the gains get privatized. Time for that to change.

Fri, Feb. 27th, 2009 12:09 am (UTC)

Yeah. If the taxpayers are going to suck up the losses--and it looks like we have to in order to prevent another Depression, maybe we should be getting the money from the gains?

Just a thought...

Thu, Feb. 26th, 2009 07:21 pm (UTC)

Before they're removed, we need to take them to Switzerland, hold a gun to their heads to get their Swiss bank account numbers, turn them upside down and shake them until all the ill-gotten gains fall out of their pockets, and the first thing we need to do with the money is fix the health care system, then cut the price of a green card from around $600.00 down to something working people can afford. I mean whatever happened to "give us your tired, your poor, your huddled masses yearning to breathe free?" We're not a melting pot anymore, we're a money pit, and this is a fundamental change that departs from everything our country stands for and holds dear.

Thu, Feb. 26th, 2009 07:27 pm (UTC)

Most of their money's not in Switzerland, it's in Antigua and the Caymans and other Caribbean island banks they basically own.

Thu, Feb. 26th, 2009 07:31 pm (UTC)

The problem is that it's not just the professional swindlers tied up in the markey and the Dow.

My husband and I own stock (we're buying like crazy). Arkansas Teacher Retirement is mostly invested in the stock market, as are many other pension plans.

If it were just fat money cats losing money, I'd be all for the guillotines etc. But it's real people, usually retired, who depend on that for an income so they don't have to be Wal-Mart Greeters at 75.

Thu, Feb. 26th, 2009 11:24 pm (UTC)

Or 91. Though this case is the result of an out and out swindle, not just market oopsies. That's what's really aggravating; even when they catch these guys they can't give the victims their money back.

Thu, Feb. 26th, 2009 07:33 pm (UTC)

Bear in mind that "the market" is not just the people (and other entities) that work on Wall Street, it's everyone in the stock market (which includes everyone with a 401(k)).

I agree that there's lots of things that need to get changed and fixed on Wall Street, but I think that Kenny may simply have been making an observation about market behavior, not making a "the Boss doesn't like that, see?" sort of remark.

Thu, Feb. 26th, 2009 11:26 pm (UTC)

Also includes everybody with a pension which is invested by someone in the company who isn't them, and which they have no control over.

Thu, Feb. 26th, 2009 07:39 pm (UTC)

I think you mean "The market doesn't like that? Awww, doesums widdle Wall Stweet not want to be weguwated after FUCKING UP THE ENTIRE INTERNATIONAL ECONOMY?" They don't just need to be regulated, they need to be put on a very short leash and then have a boot put on their necks for a while (10 or 15 years might do it, or until they've all acculturated to the idea of someone standing there wagging their finger reprovingly).

The radio shill the other morning was burbling on about how the TSX had "rallied" because "nationalisation seemed to be off the table" and I damn near puked all over my pillow. I mean, I realise you guys have the worst trade deficit since ever, but could you please not export GOP talking points wholesale to the media in other countries?!

Thu, Feb. 26th, 2009 08:05 pm (UTC)


You beat me to it. I was going to say "global" but your way works just as well. :)

Thu, Feb. 26th, 2009 07:42 pm (UTC)

Your post makes me giggle. =D Poor widdle market-ums.

Thu, Feb. 26th, 2009 08:03 pm (UTC)

A lot of people are getting a free pass.

Personally, I think anyone who signed a liar's loan mortgage, both the borrower AND the lender, should now be facing felony fraud charges.

Yes, I mean both Dave the guy who drew up the papers and said "Just bump those numbers up a bit."

I also mean Bill and Joanna, the nice couple who went along with it. They knew they didn't make that much money when they signed the paperwork. That's fraud. Put that many zeroes on it and it's a felony.

Thu, Feb. 26th, 2009 08:21 pm (UTC)

When I refinanced the house in 03, I filled out papers for a fixed rate mortgage, paid the fees, took my copies and returned a week later to fill the final documents.

They switched the loan to an ARM, and told me I could take it or leave it (and abandon all the fees I paid).

I told them that if I left, the first call I would make would be to the state banking commisioner, and that I'd spell their names to be sure he got every detail right. They came back 5 minutes later with the "Misplaced" paperwork, and I got my fixed rate mortgage. But I had to threaten them not with legal action, but with government intervention, to get them to give me what I'd already paid for.

I seriously doubt I'm unique in this experience. I've little doubt that the big banks are pulling this on people left and right, counting on people not knowing who they can call for help. Thus, because of the previous experience with the crooked bankers, I don't believe that all of the ARMs out there are held by people who wanted them - they simply got the shaft by the greedy fatcats. And the Fatcats can f'ing eat them, as far as I'm concerned.

Thu, Feb. 26th, 2009 08:43 pm (UTC)

No fucking shit. These people are part of why I stopped listening to the news recently. I wind up screaming at the radio.

That and listening to all the whining about the stimulus package. Hi, I'm sorry, but your party is the one that FUCKED EVERYTHING UP IN THE FIRST PLACE. Kindly get the hell out of the way of the efforts to fix it.

Thu, Feb. 26th, 2009 09:15 pm (UTC)

Let me preface this by saying that the current financial mess, like any problem big enough to be worth talking about, is complicated; there isn't just one thing that caused it or one thing we can change to fix it. There are as many suggestions for what caused the mess as there are people talking about it, and every cause I've seen suggested probably contributed a little to the mess.

For the most part, we're missing the point if we think we should just blame the top executives. For the most part, those executives didn't start out as what we'd think of as solidly ethical, get to positions of power, and then suddenly become slime. They all started their careers years ago in a system that rewarded short-term thinking and didn't care about long term stupidity, and a lot of other people started their careers at the same time. The reason the ones at the top now got there is not that they were more evil, it's that they were better at playing the game as it exists. The more clever they were at coming up with bizarre schemes that would make them a bunch of money today and leave someone else holding the bag tomorrow, the better. The ones who would stop and say "hey, wait a minute, this isn't sustainable, we should do something sane" made less profits in the short term, and had to go get jobs as shoe salesmen.

To pick specifically on the dodgy mortgage brokers some others were picking on above: if you were working as a front-line broker for a sub prime company 5 years ago, and you made sure that the people that came to you wanting loans really understood that their payments were going to go up a whole lot after two years and convinced them not to buy that house if they wouldn't be able to afford it, and the guy in the next cube over just glossed over all those boring numbers with a smile, when performance review time came around, you got to start flipping burgers and the other guy got a bonus. Yeah, you probably are more ethical than the other guy, but if we blame him, and not the business climate that rewarded him and punished you, we won't be any closer to avoiding having the same thing again.

And as for what created the system where all we care about is short term paper profits, we don't just get to blame a few Wall Street execs. All of us who put our savings in diversified mutual funds and never did anything more than look at the account balance on our quarterly statement and smile bear some of the blame.

If you want to fix it long term, make it harder to do well in the long term by investing in companies that are screwing the future for profits today. Take the tax incentives away from parasitic paper shuffling like derivatives and short selling, and instead favor buying actual shares and holding them for years. Find a tweak to the system that makes it more attractive to invest in a small number of companies and then pay attention to what they're doing, rather than just diversifying over such a wide swath that you don't care if one company fucks up as long as the market rises.

But mainly, try to suss out what's wrong with the system and how to make it better, rather than looking for individuals to blame.