A Useful Look at the Current Wall Street Mindset
I can summarize the well-informed tripartite New York magazine cover story on Wall Street, while eliding all the details: pretty much no one learned anything, rich people really enjoying spending money, it's not unlikely there'll be a round two mortgage debacle, Wall Street is more consolidated than ever and poses a "greater systemic risk," we're off to enjoy/exploit the BRICs (and CIVETs and EAGLEs, et al), even though Goldman Sachs, among others, took a bath on them over the last few years, slightly fewer Harvard MBA graduates are going straight into Big Finance (they're all becoming consultants, which, same diff!), and lots of people on Wall Street are irritated at the negative attention and don't understand why they can't just keep on rollin'. Also you probably shouldn't trust them with your retirement money, still. Surprise!
Retirement. LOL!
Yeah…this reminds me of a career guidebook I've seen. One of the examples of "good networking" was a story that started with two friends, Peter and Alexis, meeting as undergrads. Peter went on to work as a stockbroker, and ultimately offered his services to Alexis' mom – Martha Stewart. Great! Networking!
You might've seen the resulting headline: "SEC Charges Martha Stewart, Broker Peter Bacanovic with Illegal Insider Trading"
i thought she went to jail for putting ice in her wine.
@limeonaire – this reminds me of a recent birth announcement for Alexis. She has a new baby courtesy of a "gestation assistant" (i.e., a surrogate mommy). The notice noted that "baby and Alexis are both healthy and doing fine." (!)
Whatever happened to the impending commercial mortgage meltdown?
Side note: is it just me or are collections of countries like BRIC and CIVETS chosen less for any economic reason and more because their initials make a cool acronym? I mean, seriously: Columbia, Indonesia, Vietnam, etc… really form some kind of coherent group? Come on.
http://thailandtimes.asia/files/civet.jpg
An alternate view:
"Wall Street" fired thousands of people, many of whom have not recovered from losing their life savings or found employment anywhere near their prior levels. Those guys most emphatically did NOT win. The strong survived and are now positioned to prosper, this much is true.
Current market participants are very well collateralized and much less likely to fail (given the capital reserves are well over 10%). There are no more standalone investment banks, just well-regulated bank holding companies (even Amex! and Goldman!).
The opaque and highly leveraged derivatives market is moving to a transparent exchange/clearing house model that will mitigate or eliminate counterparty risk, making another AIG or Lehman Bros. systemic failure unlikely or impossible. (thank you Obama FinReg!)
Lending to big and small businesses is proceeding at much higher levels (see, for example, AT&T's financing of the T-Mobile deal). That market is even seeing "covenant-lite" loans again! (much more borrower friendly).
Interest rates remain low and mortgage refinancings have reduced dramatically the default rate, which means that the foreclosure "crisis" will recede as the business cycle takes its natural effect.
I guess it would please the public to see a few bankers frog-marched like Ken Lay into criminal court on novel theories of law (and this might still be in the works, just stay tuned…), but it's hard to find the facts to support any indictments.
that's my $0.02
@sigerson – Also, TARP made money for the Federal treasury. This just makes the case for an American sovereign wealth fund. We should get John Paulson and Bill Gross to run a few different funds (long-short, quant, global macro, private equity and commodities) with taxpayer money. Lower taxes! More revenue! Debt crisis: solved!