These days, almost everybody considers themselves to be victims of bankers. But let's not forget that many bankers have too suffered greatly from this banking-originating crisis. In essence, a (large) group of bankers has been mauled by the mayhem-igniting actions of another (small) group of bankers.
An aspect from the crisis that may not have been well understood by the populace at large is how tiny was the number of financial players directly involved in the trades that unleashed hell. When one blames this or that Wall Street firm for the current predicament, we should be careful to discriminate and note that, by far, not all of the employees of each particular entity had a direct hand in bringing their employers and the world down.
Those toiling away in the areas (complex mortgage securitization, complex credit derivatives) that uniquely sank the economy accounted for but a very limited fraction of the total number of staff. I mean, we could be talking about less than 200 people worldwide here. The lethal tide of toxicity derived from the actions of such a reduced contingent unfairly swept away an army of pros far removed from the subprime battlefields.
What were the rest of the investment bankers up to while their few toxic assets-revering colleagues fooled around with dynamite? They were mostly engaged in activities that had little or nothing to do with the complex subprime stuff. With the kind of activities that banks have profitably been doing for a long time, well before CDOs showed up. Things like designing risk management programs for companies, advising on corporate strategy, providing structured financing, endowing standard markets with liquidity, offering yield-enhancement to retail equity investors, serving the needs of hedge funds, issuing government securities. Things that, overall, add tons of value to end-users and to the system as a whole. Those performing such activities have been hampered in several ways by the crisis (while, admittedly, also enjoying unsuspected benefits in the case of some of the survivors).
For one, many of those individuals have lost their jobs as their firms disappeared, were sold, or cut fat. Some may not be able to return to financeland, ever. Many of them may have been producing stellar results up to the cataclysm, and would be entitled to feeling a bit of rage at having had their (profitable) heads cut off as a result of the reckless actions of those out-of-control subprime traders.
Secondly, their professional and personal reputations may have been unbearably soiled. How do you explain to your neighbor or your father-in-law that you did not take part in the CDO orgy that brought us down? That all you were doing was helping jobs-generating companies from the MidWest hedge their currency exposures? That, yes, you worked at Lehman but did not do any of the ugly things? That you never ever played with NINJA loans? As hard as you may try to extricate yourself, irate folks in search for guilty blood may simply not believe you. "He worked on Wall Street, all right, he must have done something nasty. Pity, he looked so nice," may be all the response generated by your breathless clarifying.
Thirdly, your future earnings and career may be jeopardized, as entire business lines are regulated into abstinence or as your publicity-conscious bosses shy away from aggressiveness. Take derivatives: Everybody and their brother around policymaking and media circles is hard at work pleading for the overhaul of the entire derivatives industry (not just the nasty securitization-credit stuff). They want to clamp down on over-the-counter activity, they want to increase margins, they want to ban products. You are concerned, because you know that all this is potentially disastrous not just for you but also for your clients (how will those MidWestern importers hedge from a decrease in the dollar?).
So it is clear that some bankers should also feel victimized by bankers. The lesson? The majority of Wall Streeters should never again allow a tiny bunch of colleagues to devastate everything in sight. It's not just the markets, the economy, and average Joes that suffer as a result. Banking bystanders would bleed too.
John Atlas: We Need to Support Obama in Overhauling the Financial Industry, Before it's Too Late
I believe its time for the government to exert tough new control over the financial services industry. Polls show that a majority of the American people agree.
Ellen Brown: Landmark Decision Promises Massive Relief for Homeowners and Trouble for Banks
60 million mortgages with fatal defects in title could give aggrieved homeowners and securities holders the crowbar they need to exert some serious leverage on Congress.
Also, the only reasons their firms haven't gone under is because of the largess of the American taxpayer - that's the only reason they still have high-paying jobs. Any whining on their part is an insult.
Most at the big evil institutions aren't evil themselves.
I think it was an argument in Clerks about wether the construction workers on the Death Star deserved to be blown up by Luke Skywalker... and I think they reasoned that the workers knew the risks.
You say no, that they're innocent.
OK then.
Where are these thousands of underlings suffering from the bad decisions of a few?
Why aren't they leading the charge for investigation, prosecution and incarceration?
We could sure use some help getting the guilty behind bars, and the silence of the "good bankers" is deafening.
Maybe we need some anti-trust mechanism to break up the big boys?
Or just a special tax on institutions deemed to big to fail, designed to pay back the TARP program over 2 years, and then create a safety net fund for the next crash?
Of course such a fund might force the institutions that are too big to fail to divest themselves down to a point where they are not too big to fail, what a trajedy that would be, eh?
Female praying mantis to male praying mantis: After we have s ex and before I eat you, there are some shelves I need your help with.
But they are in the same situation as journalists who would do a proper and honest job, pointing
out problems. But overwhelming was the influence and dominance of the ludicurous, the disaster -
lovers, like in that video where experts make their forecasts in 06/07. A problem that is still not
solved entirely.
http://www.youtube.com/watch?v=2I0QN-FYkpw
... Rather than Keynes’s “euthanasia of the rentier†the system has seen the relative decline of production in the advanced capitalist states, where it has been subordinated to a process of financialization. Although this was an effect rather than a cause of stagnation it has generated a real transformation in the form of the dominance of finance capital and a more unstable, uncontrollable capitalism. As Sweezy observed in “The Triumph of Financial Capital,†“In earlier times no one,†Keynes included, “ever dreamed that speculative capital, a phenomenon as old as capitalism itself, could grow to dominate a national economy, let alone the whole world. But it has.†One consequence of this, according to Sweezy, was to remove power from the boardrooms of the giant corporations and to place them in financial markets (a sphere in which the corporations themselves are major actors). States have also found themselves increasingly captive to capital markets. Hence, “Adam Smith’s invisible hand,†Sweezy stated, “is staging a comeback in a new form and with increased muscle.†The result, however, has not been the generation of a more rational capitalism, but a less rational one. The invisible hand is now that of finance capital orbiting the globe, as an outgrowth of globalized monopoly capitalism…
Modern finance, he
argued, was far from the stabilizing force that mainstream economics portrayed: rather, it was a system that created the illusion of stability while simultaneously creating the conditions for an inevitable and dramatic collapse.
In other words, the one person who foresaw the crisis also believed that our whole financial system contains the seeds of its own destruction. “Instability,†he wrote, “is an inherent and inescapable flaw of capitalism.â€
http://www.boston.com/bostonglobe/ideas/articles/2009/09/13/why_capitalism_fails/?page=1
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And, the politicians, bankers have 'inside" information about that instability in the markets -- and make huge profits from their hedge fund derivative accounts.
Robber Barons Purchase Politicians, if you let them.
Democracy is the only force that can resist plutocracy.
Contributions are bribery, not speech.
Until we fix that, we are going to lose.
There are more than 200 out there who should be ashamed of themselves.
Too bad the article didn't give us more detail.
There should be about these people every day, names included, on the front pages everywhere.
That should be the new talking point for those interested in financial reform.
Yes, we could and should be talking about these 200 or so people worldwide.
Are you kidding?
Ban all derivatives and force investment back to main street.
You can't really insurance investment, That's what the crash proved, of course we did MAKE it "work" for the crooks TARP bailed out.
If you want to "hedge" without ANY leverage, it's called spreading out your portfolio.
We can blame the top all we want but change has to start from the bottom.