The Revolt of the Lower Upper Class

[JoltinJoe]

So because they're Wall Street multi millionaires, they have no principles? What about the ones that worked hard to get there, without stepping on anyone in the process? We probably don't hear about them, but why not, let's just claim they have no principles. Sucks that we can't become rich in America without being second-guessed on how we got there, even if you did nothin'. Guilty until proven innocent seems to be the way this country is headin'...politically, religiously, and socially.

In the court of public opinion you don't even need a preponderance of evidence.

It may tbe court of public opinion today; but it could well be a court of law in the near future.

The SEC case against Goldman Sachs threatens to publicly expose the dark underbelly of Wall Street opportunism and unprincipled greed. A steady drumbeat of negative news will dampen the propsects of the current market recovery; we are a major news story away from a significant market adjustment.

Remember the way th Microsoft anti-trust verdict in May 2000 killed any hope of a recovery in the beaten down tech sector? Any really bad Goldman news will ahev the same effect market-wide.


Goldman will offer its strident denials; but I expect that it will look to settle fast for a remakably princely sum to avoid continued scrutiny (without, of course, any acknowledgement of guilt).

And someone in Washington with oversight authority over the SEC will demand that the SEC take the deal: because the only thing worse than being wrong about Goldman would be to be right about Goldman.

[blueballs]

So because they're Wall Street multi millionaires, they have no principles? What about the ones that worked hard to get there, without stepping on anyone in the process? We probably don't hear about them, but why not, let's just claim they have no principles. Sucks that we can't become rich in America without being second-guessed on how we got there, even if you did nothin'. Guilty until proven innocent seems to be the way this country is headin'...politically, religiously, and socially.

From where I work, I see this everyday. There is plenty of money to be made the right way on Wall Street, but over the past 15 years or so, much more money to be made by creating the short-term appearance of profit, which is
assessed on quarterly, semi-annual, and annual basis. So Wall Street execs have been consumed with a desire to engage in a transactions which can be booked with profitability immediately, even if there may be substantial tail risks also being assumed.

Note the financial institutions which came through the recent financial crisis relatively unscathed (TIAA-CREF, etc.) are firms which do not tie performance bonuses explicitly to the executive's own creation of short-term profits, but rather to the overall profitability of the firm. Such a compensation system does not promote or reward an individual's reckless, short-sighted risk-taking in the manner described above. Of course, these firms also do not pay bonuses in the seven figures to anyone.

There is still plenty of money to be made the right way on Wall Street but, at those firms paying obscene multi-million bonuses, those indivdiuals who tried to engage in old-fashioned risk assessments were completely trampled internally over the past 10-15 years by those whose sole motivation was the creation of the appearance of short-term profits.

It may be true that some of these execs were simply greedy and not smart enough to understand the risks they were assuming; but most understood, and just chose to do it anyway.

This is not just idle message board speculations. I actually moderated a panel discussion at a Rutger Graduate Business School symposium recently, -- and every expert on the panel held the same assessment, as stated above.

In the end, we should be alarmed by market bubbles caused by Wall Street speculation in unregulated financial products. Wall Street money gets drawn to unregulated financial products, like mortgage-backed securities and other like derivatives, simply because they are unregulated and thus often present an opportunity to exploit for short-term profit-taking.

Joe: That is the absolute truth, and it permeated itself into other sectors of the economy and shook the very basis of our economic system... housing, healthcare, banking, etc.

[danefan]

From an effective rate standpoint its the absolute truth.

I also find it interesting that (corect me if I'm wrong) all of the Democratic presidents we've had in the modern era have been the "Lower Upper Class" while all of the Republican presidents we've had have been the Ultrarich.

Reagan was "ultrarich"? I think Obama made more last year than Reagan ever made in his BEST year...even adjusted for inflation.

I said "corect me if I'm wrong." Bad assumption that Reagan made a lot of money before he became governor or president?

[∞∞∞]

Seems like you're the expert in this one 'Joe. I guess I've stated my opinion, there's no point in me arguing something I don't understand completely.

[AZGrizFan]

Reagan was "ultrarich"? I think Obama made more last year than Reagan ever made in his BEST year...even adjusted for inflation.

I said "corect me if I'm wrong." Bad assumption that Reagan made a lot of money before he became governor or president?

Well, he wasn't getting rich as Governor of California. He wasn't exactly Clark Gable in Hollywood. I'm guessin' he wasn't nearly as well off as Obama already is.

[kalm]

Here's a very interesting Daily Show interview with Harry Markopolos who, back in the year 2000, literally told the SEC that the world's largest hedge fund was a fraud. And they did nothing about it. It was the one managed by Bernie Madoff. More evidence of the sociopathic behavior and lack of oversight.

http://www.thedailyshow.com/watch/mon-m ... markopolos" onclick="window.open(this.href);return false;

[danefan]

I said "corect me if I'm wrong." Bad assumption that Reagan made a lot of money before he became governor or president?

Well, he wasn't getting rich as Governor of California. He wasn't exactly Clark Gable in Hollywood. I'm guessin' he wasn't nearly as well off as Obama already is.

My new free time search goal.....a quick search doesn't bring back anything, but something has to be out there on Reagan's amassed wealth.

[kalm]

Well, he wasn't getting rich as Governor of California. He wasn't exactly Clark Gable in Hollywood. I'm guessin' he wasn't nearly as well off as Obama already is.

My new free time search goal.....a quick search doesn't bring back anything, but something has to be out there on Reagan's amassed wealth.

It's a conspiracy theory. All negative information concerning Saint Reagan has been removed from our collective conscienciousness (and the intranets).

But you'd think a career movie star who became president in his late 70's had more bank than a 40-something community organizer.