“Most big corporations trade well above book value,” Warren said, referring to the measure of a company’s assets minus liabilities. “But many of the Wall Street banks right now are trading below book value. And I can only think of two reasons why that would be so. One would be because nobody believes that the banks’ books are honest, or the second would be that no one believes that the banks are really manageable.”
Warren’s comment on bank accounting came after she repeatedly — and apparently rhetorically — asked a panel of top regulators to cite the last time they had hauled a big Wall Street bank into court rather than settled. There were mostly halting responses and promises to get back to Warren with more information at a later time.
That question — why there has not been more accountability for top bankers in the wake of the 2008 financial meltdown — taps into a deep vein of public anger on both the left and right. And it is Warren’s most potent political weapon.
Source: Elizabeth Warren strikes fear into Wall Street – Ben White – POLITICO.com.
I don’t think I am the only person who is shouting hooray for Elizabeth Warren, the new senator from Massachusetts. Ms. Warren is a former Harvard Law Professor who is currently taking the banking sector by storm or maybe I should say tornado. She is striking fear in the banking sector of both the big bank CEOs and the regulators. It is about time someone struck back for the people.
When the financial sector did an almost meltdown in the last year of the Bush administration there was rage throughout the country. Especially when the government had to fork over billions of bucks to keep them afloat. It seemed the “too big to fail” tag put on them by both the Bush and later the Obama administrations varnished over the severe faults found in the banking sector. No one was prosecuted or otherwise punished for the gross risks they took in the pursuit of profits or for the regulators who were derelict in their duties in allowing them to do so.
People screamed about the “too big to fail” mantra for a few months and then our government seemed to move on to the next disaster without really addressing this one. Within a year the CEOs and upper management of the big banks were back at the trough getting their million dollar bonuses. It was not until this Harvard law professor went after them that anyone seemed to notice.
I loved the way Senator Warren chastised the regulators who were supposed to protect the taxpayers for not doing their jobs either before or after the meltdown. When she asked them how many Wall Street banks were prosecuted in court they were too ashamed, or maybe a better word was embarrassed, to say that none were; they settled all the matters out of court with usually a slip on the wrist. To me and I hope many of you, I don’t see any difference between what these guys did and a guy who goes into a local branch and robs it. That guy is probably behind bars for the next twenty years while all the bankers are back to doing almost the same things they were before.
Here is to you Senator Warren. Keep up the attacks. I hope you can land some of these guys in jail. That would be the only way that future bankers would learn that actions have consequences and those consequences are jail time for them.
Source: ‘Fear’ gauge showing little of it.
Some investors interpret the benign numbers as evidence that worries about gridlock in Washington and the slowing global economy are overblown.
But others worry that the low readings are a sign of complacency, and that the potential for further declines in response to unexpected bad news isn’t reflected in stock prices….
If Wall Street is nothing else it is about worrying. Those guys buy and sell on the slightest hint of something different happening. The above quote comes from Fidelity Investments as a form of advice to its investors. What it basically says is that these guys are worrying that they are not worrying enough so something might come up and surprise them. Does that sound like paranoia to you? It sure does to me.
The trouble with Wall Street is well, Wall Street. Those folks in New York City, especially Manhattan, think they are the center of the universe.
Lets move our financial institutions to Omaha Nebraska. That will give them more common sense than they would ever be able to gain on that little island in New York. Warren Buffett has done pretty well with himself by staying there all these years. He has weathered most of the melt-down in pretty good shape. He doesn’t let the flashy lights of fame and fortune cloud his judgment.
The people who live in or near New York City don’t really have any idea of what the rest of the country is about or what our priorities are. I lived in that area for four years waiting to finish out my corporate life before claiming my pension and leaving soon thereafter. When many in that area learned that I was from Indiana the first question they asked was ”what is there to do out there in the Midwest?”. To them anything outside of their area is simply a “cornfield with lights”. They don’t understand that there is life without having to live packed together with millions of other people.
I won’t reserve this mentality for only those in the Northeast as those California folks think much the same way but on a different topic. They can’t understand the changing seasons have an appeal to some of us. They can’t understand why any of us would want to live where it gets cold or where there is no ocean.
So, getting back to the original premise of this post lets move our financial district to Omaha. Maybe some saner minds would then prevail for the very fact that not many of those Manhattan folks would follow their jobs to the “cornfield with lights”. But then again maybe I am wrong about that. Greed is a powerful thing…
But what do I know….
You gotta love all the spin masters on Wall Street these days. I noticed these headline here several times this year.
BIGGEST ONE DAY GAIN!!!
But what they don’t talk about is that the day before was the biggest one day loss so all that the gain did was put us back to where we were the day before yesterday. These guys will do just about anything to try to justify their big year-end bonuses.
But what do I know….
The title to this post came from one of the organizers of the Wall Street protests that are taking place across the country. More power to the people baby!! It basically infers that we ordinary people who take risks with our assets (money) have to pay the consequences of when we make the wrong decisions. But the capitalists, meaning those large Wall Street firms, can take big risks and if they are wrong the government will bail them out with our tax money as they are “too big to fail”!
These protests are probably the result of our stagnant economy for the last dozen years or so. The average person has actually seen his wages decrease by 3% in that time while the CEOs and big Wall Street firms have seen huge bonuses year after year. Something is definitely wrong with that scenario and many common people are finally starting to “get it”. When Mr. Bush followed by Mr. Obama decided that all those investment houses and big banks needed to be bailed out it cost us ordinary tax payers billions of dollars. After almost three years the overall result seems to be that the big shots have simply gone back to their old ways (giant risks and giant bonuses for themselves). They are also for the most part hording the money we gave them and not producing the intended jobs that they were to provide.
Being a child of the 60′s it is nice to see young, and not so young, finally getting involved in this process. The only time things like this actually change is when the masses get passionate about it. We would likely have still had massive forces in Vietnam today if my generation had not forced the issue. The same is true for our times. Maybe next time when they Wall Street types get into trouble due to risky schemes our government will have the nerve to actually let them fail. Looking back on it I don’t see the consequences of that being any worse than what is happening today. We have a larger number of people who are unemployed today than we did at the height of the Great Depression of the 1930s.
People are just getting fed up with the constantly disappearing middle class jobs. They are fed up with watching those jobs be exported for the sake of the “global economy”. They are tired of seeing what little money they can put aside earning practically zero percent saving rate. We are just about the only country in the world that does not do something to preserve the financial well being of our citizens. We are about the only country in the world that puts the healthcare burden on our employers instead of having our government take on that task. People are fed up with all this stuff. I hope more and more of us get on board with the Wall Street protests that are happening. Until we do our government will not likely take us or this matter seriously.
Another great quote from these rallies is “Disgust is a massive political force when it finds its way to move” . That is what seems to be happening today. So here is to all you brave souls who are attending these rallies around the country. Rock on Baby, Rock on…..