There are times when a confluence of events can bring clarity to seemingly complicated issues.
I recently read an article in the leading business daily that somewhat smugly reported on the lack of indictments of business leaders as a result of the financial crisis of ’08.
Within days, there was the announcement of eleven thousand Citi bank employees to be fired. In that same week, there was a day when the trading volume on the Big Board was about half of the normal billion shares or so.
Although I’m well-educated and have had a lengthy career in finance, I tend to break down complex issues to basic facts. I’m a simple guy despite my occasional use of the word confluence.
Contrary to my favorite paper’s claims, the jury has spoken and the verdict is in. Wall Street is guilty. The public is now enforcing the sentence. The masters of the universe are hereby remanded to years of decreasing relevance.
The crime was bad business.
The system does work, capitalism works. There are undeniable truths in this world. Don’t mess with Mother Nature, getting old sucks and markets balance out.
Consumers being far smarter than Wall Street takes them for have decided to shop elsewhere. When we are sold rusty nails from the hardware store or buy skunky beer at the deli, we don’t come back.
Like the auto industry or the steel industry before it, the financial world has become lazy and greedy. They became so insulated that they lost track of the basic concepts of commerce.
Selling something that is modeled to decrease in value is a bad thing, no matter how “sophisticated” the purchaser is.
Don’t take me for a righteous Wall Street condemner. As a former floor trader there is no bigger capitalist pig than I, but a line has been crossed. It’s just not wise to mess with people’s money.
I’m sure the chattering classes and the pedestal thumpers will never be satisfied. I see it differently. I see it as poetry or better still, a fable.
Wall Street was the goose that laid the golden eggs. This marvelous market place financed the schools you went to and the bridge you drive over. Businesses grew, and our country’s growth was financed by the innovation and drive of Wall Street professionals.
Unfortunately, the goose wasn’t just cooked. It was leveraged to a gaggle, roasted on a spit and the pieces sold to the masses.
The capitalist system that enabled Wall Street to rise to such power is now leading the charge toward its undoing.
I know it’s always fun to see a man in an expensive suit led away in handcuffs, and it’s disappointing for some to have not seen that show, but justice is being handed out every day.
The cleansing has begun. Our capitalist system will wash away the bad actors using the harsh detergent known as supply and demand, leaving a cleaner more efficient system.
It won’t be long until we have a market based on value and rational pricing, where long-term goals and fundamentals are openly discussed without fear of derision. It’s coming, sooner than you may think.