The Wall Street protesters and their barely discernible message that seems to want to hold bankers accountable for the 2008 financial collapse is attracting lots of press attention, but inside the big firms, senior executives have barely noticed.
The reason: They have a lot bigger problems to worry about.
Executives at most of the big banks have benefited from the fact that the protesters must not know how the read a map because the demonstrations are taking place in Wall Street financial district that hasn't been the home of the biggest firms and banks for years.
Most of the major firms have moved to midtown, or in the case of the evil empire, Goldman Sachs to the far west side of the financial district, thus nowhere near the protesting epicenter of Zuccotti Park. Even the New York Stock Exchange, just blocks away from where these "revolutionaries" are gathered, is no longer the place to protest greedy traders because there just aren't that many traders there anymore.
In fact, you can find more television reporters at the NYSE than traders these days -- which may be why there has been so much coverage of this "movement," which based on the absurd statements coming from some of its participants has no real meaning other than to give a bunch of slackers something to do with their lives.
OK, so while the big firms and their employees have been largely spared the indignity of being screamed at by people who haven't shaved, showered or brushed their teeth in days, they haven't been spared the wrath of the markets, which are making a definitive statement of Wall Street's future -- and it ain't good.
As someone who covered the 2007-2008 financial crisis, I can tell you the stocks of the big banks are trading like they did during the banking collapse. Does that mean that any one of the remaining five big banks -- Citigroup, Bank of America, Goldman Sachs, Morgan Stanley and JP Morgan -- is about to implode a la Lehman Brothers, sparking a broader collapse and a re-do of the government bailouts?
I don't think so -- and neither do some of the smartest people I know who study these things. To be sure, the big banks and firms face daunting issues: Massive regulatory costs, and the ripple effect of the European banking crisis chief among them. But even the weakest of these firms like Bank of America and Morgan Stanley have more capital and less risky assets on their books than they did during the crisis years.
That doesn't mean these firms -- BofA and Morgan in particular -- are instilling confidence in investors. They're not. In fact, the CEOs of both firms have been making the round in recent weeks assuring analysts and investors that they're firms are basically fine despite the rash selling in their shares in recent weeks and shares keep hitting new lows. (BofA is close to $5 a share, which among investors is penny stock territory)
As I have reported on the Fox Business Network, James Gorman, the CEO of Morgan Stanley, has been notably active even though the firm is supposed to be in a "quiet period" as it prepares to release third quarter earnings in about 2 weeks. But Gorman has been anything but quiet. He's confronted analysts and investors directly, emphasizing that fears about the bank's exposure are overblown -- or non existent.
He issued a statement to employees last night to ignore the noise. For his efforts, Morgan has received a string of positive commentary from analysts and an unusual positive statement yesterday from Mitsubishi bank which gave Morgan capital during the banking crisis and remains its largest investor.
But it isn't working -- in fact, just the opposite is happening, most investors are losing faith in the company.
Do they think its going out of business in a 2008 sort of way? Again, I don't think so.
But they are coming to the conclusion that protesting too much must mean that there's something amiss at Morgan Stanley.
That something isn't the toxic waste of 2008 but a different toxicity that Gorman is only underscoring when he tells the world that Morgan has been unfairly singled out: A business model that isn't working and might not work even when the Euro crisis is over.
In other words, Gorman isn't making the sale about Morgan's future. Yes, other banks are getting hammered amid the recent round of panic selling, but Morgan stands out because its CEO is the most active in trying to reverse the tide.
And as he's making the rounds, here's what I hear from investors: Morgan may have enough capital to survive (though they're not totally sold on that either), but not a lot going for itself to thrive when business conditions improve.
Gorman's pitch since he became CEO a couple of years ago is that there's lots of money to be made offering advice to small investors through brokers and corporations through investment bankers.
But investors are telling me that either that they're not sold in the business model, or not they're not sold that Gorman's the right guy to carry it out.
They're also saying something else: The CEO doth protest too much. Sometimes when the markets get hairy, less is more, or as in the case of James Gorman and Morgan Stanley, you start sounding like you have something to hide.
Kelly Cogswell: So You Want to Be an Activist?
Will Bunch: What I Saw at the Revolution
Phil Aroneanu: Why Environmentalists Should Occupy Wall Street
We're sick of bailing out the Universe Masters who whine about paying a measly 3% more in taxes over the first $250K they make. The ones who pay a mere 15% in capital gains while 99% of us pay double that in federal taxes.
We're sick coddling those who shave and smell nice, the ones who commit fraud destroying the livelihoods of millions (billions if you look at this as a global crime which it was) and letting them off with a slap on the wrist fine that barely touches the billions they made committing it.
You can shoot the messengers all you want, but the message is resonating despite your effort to paint them negatively in your lame archaic right wing language. We know who the bad guys are and they aren't the unkempt ones on the street...they're the polished ones you so admire on The Street.
For most investment bankers, since 2008, they've (i) discovered the importance of CDO and housing in the market, (ii) teams being slashed 30 to 40%, (iii) reduced bonuses in 2008, 09 and 10. So rightly or not the belief is that the continued finger-pointing toward the remaining investment bankers in undue.
Two sides, with imperfect information, not understanding each other (at all)
One can only wonder at the blindness of the right...how they shut themselves off in their fancy castles constructed of imaginary ideology. And all of the 'would-be rich' who only blieve their fanciful idea, that their financial success, is due to their higher character.
No doubt they didn't notice that Joseph Stiglitz, Nobel-prize winning economist, and former vice-president and chief econmist, of the World Bank...was amoung the protestors in New York.
I don't think the 14 million students in America, who graduated from college...and now can't find jobs...deserve to stereotyped like that. Nor the massive number of middle-aged employees who have been forced to retire early. An inceasing number of homeless people were 'formerly middle class' .... people who worked hard all of their lives...paid the taxes that paved our streets and highways...and built our schools and water plants....who have been living marginally, from pay check to pay check....and now are living in homeless shelters.
But this is what we are up against....right-wing ideologues....burried in their own media sources ...believing their own stories.
This is not a time for mindless ideology.
And that is why this is a struggle between those....like Josesh Stiglitz...who can think...and those on the right who can only repeat the latest talking points from the latest circus clown.
It seems to me that the western world (US and Europe) has benefited for years from cheap import from India and China, as well as cheap raw materials, helped by debt that financed our standard of living.
As usual in the US, when something happen, everyone is looking for someone else to blame rather than think through the root core of the problem. If you think this is a structural adjustment that everyone realized when the bubble broke, it's a very different story than a financial crisis generating an economic crisis.
But, the question is, how do we adapt to those realities?
The Republican approach is to cut costs (eliminate minimum wage, worker protections, soc sec, medicare, 5-day work week, vacation time, environmental protections, etc, etc). This race-to-the bottom appoach will never work, because we cannot compete with developing countries...until we come down to 25 cents / hour. It is a formula for turning our country into a Third-World banana republic.
Barack Obama's approach...is to invest in education, and infrasturcture development. Without BOTH of these...we cannot even play a role in the emerging global economy.
And with 14 million Americans unemployed....the economy will always remain weak.. The 'formerly employed' were the fabric of our economy and our commnunties. They put their daily energies, labor, and intelligence into making our economy and our country vibrant.
Cheers
Also, hearing a talking news head pontificate on whether something has "real meaning" is amusing for the hapless irony of it.
Finally, if you want to spare some indignity for American citizens, do not start with the indignities that might be caused by free speech and assembly. Better to begin with the indignity of begging for jobs or financial help, or the physical indignity of rotting under the weight of health care costs, or the personal indignity of not being able to adequately support yourself and your family.
and Gasparino obviously doesn't know how to edit a story. The whole article is full of run on sentences, typos and double negatives. Not to mention he's a Fox News contributor...
Gasparino, if you don't know what the "absurd statements coming from some of its participants has no real meaning other than to give a bunch of slackers something to do with their lives."
Its that while the ruling class in this country has continued to push deregulation since the Reagan Administration, the poor have suffered, that while the masters of the Universe, wall street & its powerful lobby has continued buy American politicians, the poor have suffered and now that tax payers have bailed out the "free market" It is America that is suffering, cuts to social programs, food stamp programs, elderly care, the list of social safety nets that have been there for decades are being lost because we bailed out wall street, had two unfunded wars, an unpaid for medical prescription program and still the ruling class calls on more tax cuts for the rich and corps (who are people to and can have their feelings hurt)
If you really want to be heard loud and clear... May I suggest you occupy the financial news?
Check out where all the fear and pessimism is coming from. Sign up to comment, and when ever they open their mouths, let them know what you think about what they have to say.
Our government is not the problem. Our government is not the one scaring the hell out of investors, driving oil and gold up, bonds down, crashing the markets, causing mass lay-offs etc...
Anyone making these gloom and doom predictions about America's financial collapse needs to be asked a serious question.
Is it Capitalism you've lost faith in? The people? Or America in general?
Note to the author: the same protests springing up around the country are a lot further from Wall St. and no, the message is not 'barely discernible'. People are fed up with the fiscal inequality that's ravaging our society and this is just the beginning. No matter how civilized the society, you can push people around only so much. They will take to the streets and, as Henry Rollins said about the LA riots, there will be 'the sh*t is burning' TV channel on 24/7.
Your lame piece makes me want to laugh and vomit (not sure in which order). Morgan Stanley might be suffering? Gorman might not be 'the right guy'? Geez -it'll be OK for Gorman, though... even if he gets sacked he'll still have a few million on hand to soften the blow.