Wall Street: A (Sometimes Deadly) Insiders Game

I grew up in a place where many of the young men and women I went to high school with considered a future in the financial industry. Some went on to get MBAs, some are money managers, some bankers, some deal makers. I am very interested by Economics, and the human relationships which allow for profits and growth to take place, yet I never wanted to go to Wall Street. Why not? It appeared to be a rigged deal, mostly a good ole boys club like the one I left back in Texas, and frankly, not a place where Trust and Truth seemed to have much respect. I was looking for something different.

How many times did I hear someone I knew pick up a phone and repeat, '"Remember that stock/company/deal I told you about? Buy/sell/trade it now"??? More times than I care to remember. I was privy to "insider information" just because I was nearby, on vacation with, overheard a phone call, dated someone who was doing who knows what...and yes it did seem that, "Everyone was doing it." But not all of us did.

The one time I heard specific information over 20 years ago, when I was just out of university, I did not act on it. The company split again and again and was sold for a fortune and I would have made a very good profit. Why didn't I invest in it? I thought it was wrong to do so. I recall thinking, "This is why rich people stay rich." They had information others did not. This is only one of many stories I heard over the years and never acted on. Some people would think that was stupid, I felt that it would be dirty money. As if bad karma would follow the money. I did not want to buy a house with that kind of money, but with money I had earned. And I did. And the house was a house I could afford without flipping, swapping, betting. I was proud of that house. It was a home.

Then there were those who were invited into the kinds of IPOs Goldman Sachs and CIBC financed in the 90s until 2000/2001. Those in early were guaranteed huge profits. One of the biggest IPOs in biotech was underwritten by CIBC, and the company's price shot up and died in a few months. They never sold anything on the open market. Many of those profits were transferred overseas. And anything held that long was subject to low tax rates when sold. The executives and inside early investors made a killing. And the investors were also donors to the same medical schools where the research/technology transfer took place. In other words, it was a private club. And it was as politically connected as it could be Thus when it came time for the most expensive part of the biotech process, the human testing, the company had great access -- for free, to US soldiers.

The reasons why some banks/biotech companies/bad investments (recall that oil company Bush Jr. somehow made lots of money on even though it was failing?) are protected and others are left to fail reaches up to the highest echelons of power. The only difference is that now they are flaunting it and the regular US citizen feels they can do next to nothing about it. Unless we actually do.

A good start is to investigate in detail and publish the abuses. The Rolling Stone article on Goldman Sachs should just be the beginning. Look overseas to where the profits of many of the biggest US companies are kept off-shore. And keep looking and searching and screaming that we are not going to take it anymore until all the tennis buddy good ole boys are replaced by people we can trust.

So if you have never scratched the financial back of someone who was scratching yours, and you can claim some kind of integrity in your life, please please, think about running for office! Pester your representatives to pass more regulations and to investigate still further. But be careful, because these good ole boys play nasty. And to all of you who studied Liberal Arts instead of "Business" at university, recall the days when you wondered when it would come in handy? Today is your lucky day!

Follow Vivian Norris de Montaigu on Twitter: www.twitter.com/vivigive

Comments

[The Meek]

There is a downside to being a privy person. They have to hang out with other privy people. That would be awful. You made the right choice..

[pragmaticdallasite]

Great article. For the same reasons I decided not to pursue a career in hedge funds despite all my fellow students doing so.

[schatsie]

Recently, especially seeing how the rich got out at the top of both the TECH WRECK and the damn Housing bubble, I am more than ever convinced that the top 1% get 99.99% of the profits...and the rest of us be damned for stupidity.­.....after all we agreed to the 401 scheme and now look where we are....

[larry278]

It's interesting that you used the word, privy, in your blog. Privy is one of those delightful words in the English language which have 2 or more meanings.

[ndem]

This is a gorgeous work of music. And so timely.

[Ben6768]

Thank you Vivian

this is for you : http://www.youtube.com/watch?v=AZ4bx4r1VeQ