Tag Archives | Wall Street

Wall Street Costs The Economy 2% Of GDP Each Year

Isn’t the financial industry supposed to grease the wheels of commerce, rather than apply a severe brake on economic growth? It ain’t happening in the US, where Forbes says Wall Street is hogging so much for itself that it’s slashed growth by half of what it should be:

Wall Street is back,” says the New York Times, and the economic cost is high. The excessive financialization of the US economy reduces GDP growth by 2% every year, according to a new study by International Monetary Fund. That’s a massive drag on the economy–some $320 billion per year. Wall Street has thus become, not just a moral problem with rampant illegality and outlandish compensation of executives and traders: Wall Street is a macro-economic problem of the first order.

IMF-excessive-financialization-May-2015

The Financial Tail Wags The Economic Dog

How has this happened? Properly scaled, the financial sector is a good thing.

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The Stock Market Is Rigged

John Crudele is one of the curmudgeons of financial reporting and in his regular column for the New York Post he confirms what many regular Joes have been thinking:

The stock market is rigged.

When I started making that claim years ago — and provided solid evidence — people scoffed. Some called it a conspiracy theory, tinfoil hats and that sort of stuff. Most people just ignored me.

But that’s not happening anymore. The dirty secret is out.

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New York Stock Exchange. Photo: Mika-93 (CC)

 

With stock prices rushing far ahead of economic reality over the last six or so years, more experts in the financial markets are coming to the same conclusion — even if they don’t fully understand how it’s being rigged or the consequences.

Ed Yardeni, a longtime Wall Street guru who isn’t one of the clowns of the bunch, said flat out last week that the market was being propped up.

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Hot Career Move: From Wall Street to Porn

veronicavainHey Wall Streeters, is your job stunningly boring? Do you like porn? Are you hot? Well maybe you should consider following the career path of Paige Jennings, who News Cult reports has left the venerable Lazard Bros. investment bank on Wall Street for hornier times as a budding porn starlet:

Recent college graduate, Paige A. Jennings, left her position as an intern at Lazard Asset Management on Wall street under unknown circumstances earlier this month. Today, an anonymous source has revealed to News Cult that she has decided to make a go at porn. While she was in fact not dismissed from her job her previous superiors have yet to discover that she had been posting naked selfies of herself inside the company’s bathrooms on Lazard’s time.

An aspiring porn star, Jennings now goes by the name “Veronica Vain” since leaving Lazard and doesn’t care what her former employer thinks of it.

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Take it and Like it: Corporate America and the Manipulation of Public Opinion

Brad Clinesmith (CC BY-SA 2.0)

Brad Clinesmith (CC BY-SA 2.0)

The Absurd Illusions of a Shining City on a Hill by Mark Weiser at Dissident Voice:

The average natural born citizen in any country is continuously indoctrinated into the national culture starting about the time they begin understanding the meaning of words. There’s one country in particular where reality is staring the public in the face, but the truth has been grossly distorted for decades by government, and mass media, bias and propaganda. If the citizens would suddenly see the truth, instead of what they’ve been conditioned to believe, they would find themselves in a strange and bizarre foreign land that’s contrary in many ways to their personal beliefs regarding home. For those who experience this sudden revelation, as soon as the truth is realized, it’s likely to provoke a profound and immediate sense of disbelief. Like emergency room personnel making insensitive jokes, laughter at some point becomes a self-defense mechanism for offsetting continuous parades of the absurd realities and outright horrors.

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The US justice divide: why crime and punishment in Wall Street and Ferguson are so different

By Debra Sweet via Flickr (CC by 2.0)

By Debra Sweet via Flickr (CC by 2.0)

via The Guardian:

Like nearly all white, American journalists, I’ve spent most of my career a million miles from places like Ferguson, Missouri. The mainstream media in the US hates the urban racism story and always has: too depressing; no patriotic angle; too hard to sell to advertisers.

So, reporters like me often find themselves tugged in the direction of less commercially upsetting beats. It might be presidential politics, gay marriage, global warming. In my case, it was high finance. As a correspondent for Rolling Stone, I spent years covering Wall Street corruption, briefly earning disrepute in lower Manhattan for calling Goldman Sachs a “vampire squid wrapped around the face of humanity”.

But about two years before an unarmed 18-year-old named Michael Brown was shot and killed on the streets of Ferguson by a white police officer, my Wall Street beat started leading me inexorably in the direction of the US’s growing urban disaster.

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Michael Lewis on the Federal Reserve and the Secret Goldman Sachs Tapes

2013 Federal Reserve Bank of New York from Maiden LaneMichael Lewis is the former Wall Streeter who wrote the bestselling books Liar’s Poker, Moneyball and Flash Boys (among others). His dissection for Bloomberg View of the Carmen Segarra tapes (listen here) recorded while she was employed by the Federal Reserve is well worth a read. For those who don’t know, the main revelation is a recording of a discussion at the Fed in which a Goldman Sachs deal is described as “legal but shady”:

…First, a bit of background — which you might get equally well from today’s broadcast as well as from this article by ProPublica. After the 2008 financial crisis, the New York Fed, now the chief U.S. bank regulator, commissioned a study of itself. This study, which the Fed also intended to keep to itself, set out to understand why the Fed hadn’t spotted the insane and destructive behavior inside the big banks, and stopped it before it got out of control.

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Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy

Jamie Dimon, CEO of JPMorgan ChaseA recent fraud trial in Califirnia could finally pave the way for culpable Wall Street banksters to be criminally prosecuted, reports Thomas Frank at Salon:

The Tea Party regards Barack Obama as a kind of devil figure, but when it comes to hunting down the fraudsters responsible for the economic disaster of the last six years, his administration has stuck pretty close to the Tea Party script. The initial conservative reaction to the disaster, you will recall, was to blame the crisis on the people at the bottom, on minorities and proletarians lost in an orgy of financial misbehavior. Sure enough, when taking on ordinary people who got loans during the real-estate bubble, the president’s Department of Justice has shown admirable devotion to duty, filing hundreds of mortgage-fraud cases against small-timers.

But high-ranking financiers? Obama’s Department of Justice has thus far shown virtually no interest in holding leading bankers criminally accountable for what went on in the last decade.

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