E-mails From Mordor

A 15 year veteran of Wall Street who put us on to Magnetar disappeared unexpectedly, much to our concern. He resurfaced recently and gave us a bulletin:

Sorry I’ve been out of touch so long.

It’s just that I’ve become quite disappointed/disaffected by the whole thing. We have failed and “they” have won. All the good that could have come out of the debacle has been lost… and it has broken my
heart. The Powers That Be have no inclination to learn anything or correct any of the imbalances. What is even more soul crushing? They are actively and desperately attempting to wrench things back to the
way they were. That would be “Mission Accomplished” and it disgusts me.

Every day I go to work in the Bubble that is Wall Street. A bunch of self-important ass clowns that think they somehow deserve or have earned their outsized compensation. We move paper from one side of
the desk to the other and call it “PnL”… and the idiots in this business think they’re talented enough in doing so that they *deserve* to make $4mm bucks a year for doing so. Its a joke. I suppose what
makes it harder to swallow is the fact we had such an amazing opportunity to correct those imbalances… and that opportunity was stolen.

What throws me over the edge is the trend line of where things are headed. All the garbage the people find so offensive — CDOs, proforma loan origination with risks shuffled off to the dumb money via securitization, a culture of insider trading where the playing field is anything but level — is but months away from again becoming the status quo. AND THAT IS EXACTLY WHAT THE AUTHORITIES WANT!!

We have lived through the single greatest injustice in the history of mankind. And it all played out in shockingly clear detail. Yet nothing is going to be done about it. No ill-gotten gains will be disgorged, no rules will be meaningfully changed, and not a single person who caused this will be asked to answer for their misdeeds. The American people have been robbed at gunpoint… and no one cares.

I spent six months unable to fathom all of this. I sat there like it was 1945 saying to myself like I’m sure people at the time said of the Holocaust: “given the evidence we’ve all seen, its just a matter of
time…” But its not going to happen… they want to put Humpty Dumpty back together again like nothing ever happened.

Now I’ve moved on. We’re now in the biggest bubble of all time… and I’m more confident than ever that I know how this ends. This ends in tragedy, in a way where no one will be left standing. They’ve turned
what would have been a complete collapse of the private sector economy into something that at some point will be a complete collapse of our system as we know it. These sorts of imbalances — economic, social, and political — can not be sustained indefinitely. They will destroy us… I have never been more sure of anything.

Until then however, I’ve given up. They have won and it has broken my heart.

http://www.nakedcapitalism.com/2010/04/e-mails-from-mordor.html