Wall Street is Officially Over...The End!

The End
by Michael Lewis December 2008 Issue
The era that defined Wall Street is finally, officially over. Michael Lewis, who chronicled its excess in Liar’s Poker, returns to his old haunt to figure out what went wrong.


To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.


The crash did more than wipe out money. It also reordered the power on Wall Street.

Most economists predict a recovery late next year. Don’t bet on it.
I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous—which is one of the reasons the money was so easy to walk away from. I figured the situation was unsustainable. Sooner rather than later, someone was going to identify me, along with a lot of people more or less like me, as a fraud. Sooner rather than later, there would come a Great Reckoning when Wall Street would wake up and hundreds if not thousands of young people like me, who had no business making huge bets with other people’s money, would be expelled from finance.

When I sat down to write my account of the experience in 1989—Liar’s Poker, it was called—it was in the spirit of a young man who thought he was getting out while the getting was good. I was merely scribbling down a message on my way out and stuffing it into a bottle for those who would pass through these parts in the far distant future.

Unless some insider got all of this down on paper, I figured, no future human would believe that it happened.

I thought I was writing a period piece about the 1980s in America. Not for a moment did I suspect that the financial 1980s would last two full decades longer or that the difference in degree between Wall Street and ordinary life would swell into a difference in kind. I expected readers of the future to be outraged that back in 1986, the C.E.O. of Salomon Brothers, John Gutfreund, was paid $3.1 million; I expected them to gape in horror when I reported that one of our traders, Howie Rubin, had moved to Merrill Lynch, where he lost $250 million; I assumed they’d be shocked to learn that a Wall Street C.E.O. had only the vaguest idea of the risks his traders were running. What I didn’t expect was that any future reader would look on my experience and say, “How quaint.”

I had no great agenda, apart from telling what I took to be a remarkable tale, but if you got a few drinks in me and then asked what effect I thought my book would have on the world, I might have said something like, “I hope that college students trying to figure out what to do with their lives will read it and decide that it’s silly to phony it up and abandon their passions to become financiers.” I hoped that some bright kid at, say, Ohio State University who really wanted to be an oceanographer would read my book, spurn the offer from Morgan Stanley, and set out to sea.

Somehow that message failed to come across. Six months after Liar’s Poker was published, I was knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share about Wall Street. They’d read my book as a how-to manual.

In the two decades since then, I had been waiting for the end of Wall Street. The outrageous bonuses, the slender returns to shareholders, the never-ending scandals, the bursting of the internet bubble, the crisis following the collapse of Long-Term Capital Management: Over and over again, the big Wall Street investment banks would be, in some narrow way, discredited. Yet they just kept on growing, along with the sums of money that they doled out to 26-year-olds to perform tasks of no obvious social utility. The rebellion by American youth against the money culture never happened. Why bother to overturn your parents’ world when you can buy it, slice it up into tranches, and sell off the pieces?

At some point, I gave up waiting for the end. There was no scandal or reversal, I assumed, that could sink the system.

Then came Meredith Whitney with news. Whitney was an obscure analyst of financial firms for Oppenheimer Securities who, on October 31, 2007, ceased to be obscure. On that day, she predicted that Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust. It’s never entirely clear on any given day what causes what in the stock market, but it was pretty obvious that on October 31, Meredith Whitney caused the market in financial stocks to crash. By the end of the trading day, a woman whom basically no one had ever heard of had shaved $369 billion off the value of financial firms in the market. Four days later, Citigroup’s C.E.O., Chuck Prince, resigned. In January, Citigroup slashed its dividend.

From that moment, Whitney became E.F. Hutton: When she spoke, people listened. Her message was clear. If you want to know what these Wall Street firms are really worth, take a hard look at the crappy assets they bought with huge sums of ­borrowed money, and imagine what they’d fetch in a fire sale. The vast assemblages of highly paid people inside the firms were essentially worth nothing. For better than a year now, Whitney has responded to the claims by bankers and brokers that they had put their problems behind them with this write-down or that capital raise with a claim of her own: You’re wrong. You’re still not facing up to how badly you have mismanaged your business.

Rivals accused Whitney of being overrated; bloggers accused her of being lucky. What she was, mainly, was right. But it’s true that she was, in part, guessing. There was no way she could have known what was going to happen to these Wall Street firms. The C.E.O.’s themselves didn’t know.

Now, obviously, Meredith Whitney didn’t sink Wall Street. She just expressed most clearly and loudly a view that was, in retrospect, far more seditious to the financial order than, say, Eliot Spitzer’s campaign against Wall Street corruption. If mere scandal could have destroyed the big Wall Street investment banks, they’d have vanished long ago. This woman wasn’t saying that Wall Street bankers were corrupt. She was saying they were stupid. These people whose job it was to allocate capital apparently didn’t even know how to manage their own.

At some point, I could no longer contain myself: I called Whitney. This was back in March, when Wall Street’s fate still hung in the balance. I thought, If she’s right, then this really could be the end of Wall Street as we’ve known it. I was curious to see if she made sense but also to know where this young woman who was crashing the stock market with her every utterance had come from.


MUCH MORE...Good Read at......

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom

:D

Recommend

was coming until Meredith Whitney told him. A number of strident voices have been warning of this since 2002/2003. When people act like Whitney was some prophet it makes me laugh.

Talk about naivete.

But kick and rec.

Then there was the banking guy interviewed a few weeks ago that said they were so high in peddling these crap mortgages that they just couldn't get enough people fast enough to get out their and swindle the people.......so they hired a pizza delivery boy. Yup, GOP is right--we don't need to do no stinkin' regulation, etc. jeeesus.......

Here is another good first hand account about the debauchery that is Wall Street.

http://theamericanscene.com/2008/12/23/ahi-quanto-a-dir-qual-era-e-cosa-dura-esta-selva-selvaggia-e-aspra-e-forte-che-nel-pensier-rinova-la-paura

You have no idea how corrupt and irresponsible big business and investment banks have been :(

comes back."

It's good to understand WHY this time...it MIGHT NOT..come back.. Without a new "Bubble" on the horizon we are just paying off the folks who speculated and ran our money who want to keep their boat and home on Nantucket, Long Island or somewhere in Florida or the "Islands."

In the end...without a BUBBLE they need to cover their asses on our 10 Cents on the dollar. :-(

A bubble is just a symptom of de-regulation. Deregulation and cutting taxes on the wealthy create bubble because there is excess capital freed up by the tax cuts with less inhibitions for that capital to reinvest. Bush did both of these things and it created the mega-bubble. Reagan, for the most part, only cut taxes which lead to a relatively mild recession, to give you another example.

:shrug:

You have a fundamental choice of how to cope after crisis. The New Deal came out of the Depression and helped foster the strongest middle class in the history of the world.

If you have read Naomi Klein's The Shock Doctrine, you would know instances of other "crisis" moments, that were used for deregulation and austerity. Chile under Pinochet, Argentina and Brazil under military juntas, Suharto, the list goes on and on. It is clear which of these paths lies to the greater good of society.

of the system without a new Bubble..what is left? :shrug:

I hope we see a New Dealesque initiative from Obama and am confident that we will. The good news about this shock is that the entire world has been shocked as well, which means that if our government is smart about the choices they must make, that our global standing will not diminish and we will come out of this crisis better off than other nations.

aleady do. 9/10ths of us out here don't live and breath the Dow. Back in the 1980s most of the companies didn't either. There is an ability to start a business without going public. That's what this administration needs to focus on - family concerns and small farms, without all the corporation-nation state regulations, i.e., does a dog really need to have GPS collar or tag? No, they don't, just like a couple of chickens or one cow on your property.

Mankind lived before the Dow and we'll make it just fine without. It's all those who say we can't are the ones who can't, not us out here.

is as manufactured as many of the ones you list.

This was a castle of sand decades in the making. If it was properly planned the trading houses would still be on top.
A great hint of what's to come came out today. The FDIC estimated 60 something billion in losses that they'll need to over over the next four years, but in the same breath are asking for 500 billion more in their chest, 8 times what they think they'll lose throughout the first of Obama's terms.
I don't know much about who runs this site
http://www.propublica.org/article/next-in-line-for-a-bailout-the-fdic-0309
but they have an interesting grap
hhttp://spreadsheets.google.com/pub?key=pFNEiMwnzBXMMW8JwXhPsUg&oid=5&output=image
The FDIC has almost burned through their reservoir and wants a credit line 10 times greater than what they had in surplus for the past two decades. That should scare the living hell out of you.

It was always going to be the next stage - it was just delayed by 8 years.

markets. Although the prices of groceries and some other similar items are rising, overall we are now experiencing deflation, especially in housing prices.

Your comment is very helpful. Thanks for your post, Idealism. We need to keep trying to get people to understand what is going on.

Kellogg's has raised the price on their products 9-14%, depending on product, just because they can. Grocers are going into revolt because they know it is not commodity prices of cereal's, etc., but the major labels raising prices.

We are not as of yet seeing large-scale deflation, but it is looking like a real possibility within the next 2-3 quarters. The de-leveraging process at these banks is far from over it seems, you can tell by how worried the FDIC is with regards to their own capitalization.

Some people think raising the top marginal rate in a recessionary period is counterproductive, but honestly history has shown that to be false. Clinton raised taxes on the rich in 1993 during the inherited recession from Bush 41 and it helped foster in the greatest economic expansion the US has ever known (not to mention balanced the budget and provided us with a nice surplus). To pay for parts of the New Deal (CCC, WPA, Home owner help) FDR raised taxes on the rich, and coupled with WWII, he brought us out of the Depression.

Raising taxes can be done at any time, all it does it give more money to the government to spend on the majority of us while penalizing the only among us who are actually still making good money.

two things are clear if you study history.

one: as long as capital markets have existed (and this goes WAY back long before the US stock market), we have had bubbles.

this is NOTHING new under the sun. for pete's sake. tulip bulbs, silver, gold, oil, orange juice, real estate etc. etc. etc.

many asset classes have had MANY bubbles and many "pops" to the bubbles.

markets don't make nice steady linear progression.

two: every frigging time a bubble pops (READ SOME HISTORY. READ THE NEWSPAPER ACCOUNTS IN 1929 ABOUT HOW THE STOCK MARKET WAS DONE!!! etc.) we have the naysayers (often those who hate capitalism, but not always) come in and say

"this time is different". "it's over".

rubbish.

people think this is NEW?

do you have any idea what a bucket shop is? what kind of leverage AVERAGE investors were using through bucket shops to buy stocks in the 20's? ever hear of the tulip bulb bubble, the hunt brothers and the silver market? etc.

seriously.

the market is not done. it's not over. and it will come back.

people here sound like primitive men looking at the sky during an eclipse and claiming the gods have eaten the sun, and it's no more.

People who have and who demand a say in things when they give you money ---

People who have a close look at the books and a say-so in the running of the

company.

People who have are highly accountable to their investors -- and to the public.

Wall Street is far removed from that concept -- it's a scam to raise huge sums

for huge corporations which are unaccountable either to "investors" or to the public.

wall street has its issues, but there are literally millions of people (my grandparents a perfect example), who started with next to nothing, and who used the market (and other asset classes like real estate) to build wealth.

the market is incredibly democratic. the order book doesn't know your race, gender, age, economic level, etc.

you buy a share of ^^^^ , you have the same opportunity to participate in gains or losses as the next guy.

and when you sell it is up to you.

your grandparents probably invested at a time when financial markets were

regulated -- but then the returns on their holdings would have been much smaller

than the higher risk pay outs we've more recently seen.

I would also presume that the people you are talking about weren't talked into

high risk mortgages? Certainly over the last 20 years, speculation has entered

the real estate market and houses have been overvalued. These are and were

corrupt practices.

You have only to look at the issue of insider trading -- unevenly enforced --

Martha Stewart, for instance -- to understand that the market is not "democratic."

And, rumors have brought down substantial banks in the past. Rumors started by

one bank CEO to destroy another.

To not consider insider info would be hugely naive.

You're also ignorning the fact that in one of the large down turns of the last ten

years of so, ordinary citizens lost substantial amounts of their "investments" because

they couldn't get thru to brokers/agents to give "sell" orders! These losses were

someone else's "profit."

Now ... rethink what I said to you about having a personal partner in a business ---

or family members invested in your business -- and you understand that it is nothing

like having the "public" invested in your business.


PS: You should also catch up with the Jon Stewart tape from last week where he

shredded one of the networks for their phony investment advice.

in every market (to lesser or greater extent) and available to those who sought it out.

for example, using leverage and futures in indexes vs. buying an index fund.

that's been around for decades.

real estate spec is nothing new, but it is correct that the ridiculously decreased mortgage requirements/accountability exacerbated it.

my grandfather taught me how to prudently invest.

i ALSO speculate, but i never confuse the two.

Again, investment is NOT speculation --

You have only to look at Nixon talking about injecting "uncertainty" into the

markets to understand how at his time they dropped to 600 ....

No -- those seeking large profits aren't interested in certainty nor true

long term investments -- they are interested in high risk speculation WITH

TAXPAYER BAILOUTS.

I think you are confusing your own "success" with good luck so far --

and I hope that it continues for you. But to imagine that others have failed

because they weren't "taught" properly or aren't as smart as you are -- or didn't

work to research as diligently as you have is -- again -- naive.

is my point.

speculation is CENTURIES old.

tulip bulb scandal, etc.

heck, in the 1920's, bucket shops offered speculators 10:1 leverage for stock purchases.

Becomes a difference of kind..

If the market collapse leading to the Great Depression was a Tambora class event, which gave rise to the Year Without A Summer, 1815, then what we are seeing today is a Chicxulub Impact, the dinosaur killer which made room for the rise of the mammals.

http://en.wikipedia.org/wiki/Mount_Tambora

http://en.wikipedia.org/wiki/Chicxulub_Crater

Capital markets will not disappear, just as life did not disappear after Chicxulub, but it certainly ended the reign of the dinosaurs and made life unpleasant for everything else for quite some time afterward.

cheers for that.

but it's still overwrought imo.

this SUCKS. but those who think it is armageddon really do remind me of the ancients looking at an eclipse. fear of the unknown AND lack of historical perspective (it wasn't like eclipses hadn't happened before).

our markets could suffer a nikkei/japan like collapse. THAT would suck. a decade of stagnation and poor economics, or do a lot better.

regardless, you are right. capital markets will NOT dissapear. and plenty of smart people are using NOW as a time to start buying some undervalued assets, and 10 yrs from now most will look back and say "darn i wish i bought ^^^ when..."

With the fiat money and fractional reserve banking of today the governments will be able to dig a far deeper hole before the inevitable collapse.

That is your difference in degree which will become a difference in kind.

AIG has had something like $130 billion taxpayer dollars pumped into it, it's market cap is less than Autozone right now.

that could never fail and did.

heck, wanna talk about the "nifty fifty"?

there is always SOMETHING different. 1920's had bucket shops, for example. that was new.

now this crash has fiat money, and don't even get me started on CDS's etc.

i'm just a "there's nothing new under the sun" kind of guy.

the specifics have changed, but it's yet ANOTHER crash, of another bubble.

nobody KNOWs what is going to happen. i certainly accept the POSSIBILITY that you may be right.

i just don't think it's likely.

This one had the dirty hand of the government all over it... and yet, this critical fact is being glossed over, for obvious reasons. When will we learn? Sure, just blame the usual suspects - and we will have the exact same thing happen in another 20 years, if we manage to dig out of the hole the engine of our economy is being pushed into by those who are in charge even as we bicker and discuss...

that's the right-wing agenda and it's intended to destroy middle class and

create new slave labor, slave wages.

As the corrupt buy and take over government, this is what happens.

Is that the traders have lost all credibility. How many people reading this would trust someone else to manage your portfolio right now? This last bubble was largely based on the middle class tossing their lot into the market based on historical returns. Traders don't know what they were buying let alone the stock holders. The market will most likely move back to it's original function of allowing the wealthy to look over business proposals and decide which have a chance of profitability. I can't see the market that existed last year ever re-emerging.

there is broader ownership in stocks than has ever occurred in history. that is due primarily to retirement funds, 401k's, etc.

that's not going to change. you can look up the stats, but it's pretty staggering what %age of people now own stocks. it's still not a huge percentage that own individual issues. most own through mutual funds.

that's not gonna change.

there has never been any 20 yr period in US history where dollar cost averaging into equities has not given a positive return, and in the vast majority of 20 yr periods - a return that outperforms most asset classes.

i work in a solidly middle class/blue collar job, but i also trade on my own time, and despite the PAIN, nobody is saying "i'm never going to invest in stocks again". a fair %age are excited at the bargains out there now (one guy was mostly cash and is loving it right now), and others are just plugging away into their 403b's, deferred comp funds, etc.

the common man will continue to own stocks. they are not going to be excited about active trading, until we are well into the next bull market. that is a given.

But it will go down for a long time, and then sideways for a long time. Remember the 1970's? Something like that.

You're right that there is nothing new, but it is the same old shit, different day. Leverage increases volatility and risk to the entire economy when the value of whatever it is you bought with all that borrowed money goes south. So we have seen government step in and make regulations that limit the kinds of investments certain types of players can make with borrowed money. But in order to make big money, you're always dealing with borrowed money, so we see these big financial institutions shuffling around and figuring out ways around regulations--you see AIG running itself like a hedge fund, the housing bubble, the dot com bubble, the Asian financial crisis of 1997, the Black Monday crash of 1987, the silver bubble the Hunts created in the 1970's, the Fisk/Gould scandal of 1869, and, of course, the crash of 1929.

What the worst of these crises have in common is collusion between self-interested Wall Street insiders and Republicans who, though theoretically in charge of regulation and oversight, are actually colluding to shovel boatloads of cash to these people while passing the downside risk on to the American taxpayer.

You're also right that historically capitalism has failed over and again -- repeatedly.

Always in the direction of moving assets from the many to the few.

When Wall Street is regulated it is earning based on investment - slow growth, small profits.

When Wall Street is deregulated it is the same as organized crime.

No large profit can be made from long term investment -- it is SPECULATION which is

required for that, ofen based on deception.

No one makes money from a steady market except in the long term ---

it is speculation which is required for huge profits.

Again -- Remember, "There's a new sucker born every day.

Unfortunately, these "markets" harm not only those who create these reckless investments

and not only those who invest in them, but the whole of the population forced to bail out

corruption.

It is a human concept.

A flawed one at that. The fact that all those bubbles have happened and busted should be an indication of the inherent flaws in capital-based economic systems.

The fact that this may not be the end of "the market" does not mean that we need to consider evolving off it in a serious manner.

Else, we're going to be living under a system that is structurally flawed. If your house roof leaks every winter, what do you do... put a couple of buckets and deal with the ensuing cleanup every winter, or do you fix your damn roof after the 1st winter?

the market is the aggregate of all trader and investor decisions.

iow, all the traders and investors and all their various timesframes (day trader, scalper, longterm investor), their various decisions, stop loss orders, limit purchases, etc. etc.

in AGGREGATE make up the market.

it is a complex dynamic system.

you can actually understand the market better by at least having some familiarity with game theory, complexity theory, and chaos theory.

markets were invented by humans and are one of the greatest inventions in the history of mankind. they have facilitated massive growth in wealth, and allow anybody with a little capital to choose to become OWNERS in some of the greatest, and not so great lol , comnpanies to ever exist.

markets will always have bubbles, crashes, etc. that is not a flaw, it's a feature. if you want linear growth, invest in longterm bonds and clip your coupons.

"That’s when Eisman finally got it. Here he’d been making these side bets with Goldman Sachs and Deutsche Bank on the fate of the BBB tranche without fully understanding why those firms were so eager to make the bets. Now he saw. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?” '

I thought this part near the end was especially interesting:




If there ends up being anything left to salvage, instituting rules prohibiting investment banks from being publicly traded seems necessary. A few enormously corrupt and morally debased individuals held the entire economic system in their hands, and had no downside risk of their own.

Creepy and that's what these folks ARE... A NEW MOB dressed in fine clothes with names that aren't Italian. :-( Although...what's behind them might just be the same old...same old...if one thinks about what's gone on. The Bush Family doesn't discriminate in who it deals with...does it...? And there isn't any ethnic group that can be blamed on this latest SWINDLE, in total, unlike times past! :shrug:

This investment banking system was designed to push all the risks onto the shareholders, and failing that, onto the taxpayers. The con-men running the operation only had to worry about whether their yearly bonus would be $25 million instead of $50 million.

Basically, it's like they allowed the mafia to go public.

Correct . . . Unregulated capitalism is merely organized crime.

Thanks for Posting

Thanks for this link.

I was up over 35% last week thanks to some smart buys.

I heard some talking heads on CNBC's "Fast Money" (Traders) saying that the Shorts are going after Warren Buffet. Going to take the old steer down. They will take everyone down. Well on their way, they are.

(as long as its not nekkid shorting).

shorts are a valuable part of the price discovery process.

and god knows we get some frigging wonderful short squeezes when they are forced to cover.

Sector..

Vultures do well in times of famine, eh?

But there's ordinary famines and then there's Chicxulub impacts, this is a financial Chicxulub.

http://en.wikipedia.org/wiki/Chicxulub_Crater

going up, the cannibals come in, short it, and take the investors' money.

It's a game, sort of like shooting pheasants that are imprisoned in a pen.

If you are making money in the stock market by actually buying stock, you are tomorrow's game. You think you are doing well, but, in fact, you are being fattened for the kill. You have to have enormous amounts of capital, endless amounts, to beat the short-sellers at their trade.

The instability of the market itself is creating some obvious trends. Next time we have a "good" day look at all the stocks that are up, then next time we're in a slump look how far those same stocks are down. Then the next good day they're back up, like clockwork. There are still many, many good companies out there that are just fluctuating with the overall market. The risk is almost non-existent and if you want to know what the return is look at the last high from the month before. It's not rocket science for us analysts.

of their investment.

It isn't my fault if someone else doesn't wait for it to go back up to sell it while I'm here doing research watching it rise and fall.

If there's a stock fluctuating between $1.00 and $1.50 by going down on the market's overall bad days and going up on the market's overall good days, I'm going to buy it. They can't complain because they can look at the chart same as I can and see that it goes down for two weeks and then up for two weeks, then down, then up.

Classifying it as "someone else's loss" is like me going to Target seeing a DVD I want for $25 but I pass on it because I think that's too expensive. The next week I see in the Sunday flyer that it's on sale for $15 so I go in and buy it. I wouldn't classify this as Target's loss. I waited to get a better deal that was available to me.

See, the people losing right now are those that are freaking out and not waiting this time out or at least taking an active role and moving some of their stocks/401k/mutual funds around, so they just sell them at a huge loss. Hell, if people put all their money in Walmart they're going to make a big profit when the market turns back around.

that has certainly happened in the last ten years or so --

And, I presume you're saying that people who lost money in the crash of '29 were

also just idiots as those you're describing now?

"Research" made the difference for you? In other cases insider trading makes the

difference!

"Investment markets" don't fluctuate the way you're describing --- the returns on

those previously REGULATED "investments" were smaller - but steady.

Capitalists don't make much money on "investments" and steady markets ---

they make large sums of money on speculation. They make large sums of money on

reckless risk and reckless borrowing and lending.

When the public is unable to rapidly respond to a falling market to reach agents/

brokers to give "sell" orders, then their loss is someone else's gain/profit.

Many people cannot wait until the market turns around --- many of them are losing

their jobs and thus their cars, homes.

.
.
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Liar's Poker

for once, some historical perspective.

people here are acting like financial crises, bubbles popping is something new and it's the END OF THE WORLD.

for those who study markets and history, and have a little historical perspective -

markets are forward looking price discovery mechanisms. the only way "it's over" is if the US economy is done with, and that is simply not the case.

don't get me wrong. we could have some nasty weather. heck, europe's got some right now too. and for pete's sake, look at the frigging EURO. the dollar is up hundreds of pips vs. the euro recently.

this is how markets work. it's not linear, it's chaotic.

but the longterm trend is up, because our economy builds wealth.

I guess that all depends on your social level.

disprove my point.


let's feel free to compare wealth NOW vs. say 50, or 100 yrs ago. average wealth per household or per individual

Why not forty?

1969?

heh...

Thanks for the post!

:wow:

All I can say is I hope President Obama regulates Wall Street's asses so hard their butts squeak when they walk.

Hekate

:grr:

To the author of the words used...

Your story explains the collapse... in a way that is really eye opening.

You are serious... you really didn't have a clue?

Sheesh, it's that simple?

Then why, I ask, is my hard-earned money still being funneled to these losers? Why is my government using my tax dollars to prop up companies that are rotten to the core instead of hastening their exit and sowing the seeds of newer, more efficient and productive ones?

Poster, do you know?

I think I've seen it here before.

"Long Beach Financial was moving money out the door as fast as it could, few questions asked, in loans built to self-destruct. It specialized in asking home­owners with bad credit and no proof of income to put no money down and defer interest payments for as long as possible. In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000."

:wow:

what do you expect is going to happen?

De-regulation of capitalism is organized crime -- and they, of course, all know that.

and this 'event' has been heading for a fatal crash for quite a while.

"Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?”


IF the 'assets' being purchased were NOT REAL, WHY does the BAILOUT have to happen? Is it because the individuals who were counting on these 'assets' as income, USE that income as a basis for purchasing other things?

:shrug: Sort of like the worst since the early 1990's. But, agree...it's still running...:eyes:

There will always be a place for people who understand how things work can make money. This will keep a supply and demand for the financial services sector.

Well, I work at Wall Street. It does seem a little bad these days, but I believe things will get better later this year. Just keep that faith everyone.

but welcome!
:hi:

about just the "little bad" you are experiencing? :shrug: