Tuesday, April 01, 2014


Or, more simply, is Wall Street honest?  Well, I'm sure you already know what I think.  An old friend of mine, who is in the finance industry, posted this from CNBC on facebook earlier today:

Katsuyama vs. O'Brien - who won the fight?

It was the fight that stopped trading on the floor of the New York Stock Exchange—IEX's Brad Katsuyama vs. BATS Global Markets president William O'Brien on high-speed trading and 'rigged' markets.

"You want to do this? Let's do this," Katsuyama said in response to O'Brien's prodding.

"I really do," O'Brien said.

And off they went, for more than 20 minutes. Traders stood transfixed as the two argued over the very nature of the stock market and whether the average investor could even compete with the big guys.

More here, with video.

Here's the comment I left:

Keep in mind that I am a far left socialist, in the Bernie Sanders mold, and that I must necessarily be harboring some kind of bias. Having said that, I don't understand how the stock market, actually the entire finance industry, could be perceived by anybody at all as fair, or even, at this point, as good for the economy.

From the major ratings agencies designating toxic mortgage backed securities as triple A, to the entire financial press cheering the whole thing on, even while they had no idea what it was they were championing, to the fact that the industry has so much pull in Washington that none of the major players have been prosecuted, or will be prosecuted, really just the entire mess surrounding CDOs and the real estate bubble they created, to the Libor manipulations, to usurious credit cards with contract language so purposely obscure that it baffles even experts, to the oil commodities bubble of the late 90s, to the S&L and junk bond scandals of the late 80s, and on and on and on, it just seems to me that Wall Street, again and again and again, gets away with murder.

So when someone from the industry tells me that rapid mass computerized trading is not ripping off ordinary investors, he's got the burden of proof. He's going to have to explain to me why Wall Street isn't ripping me off. And he's got to do it in a way that I understand because these people shrugged off critics of the mortgage backed securities as just being stupid, which they weren't. That is, Wall Street insiders have already shown that they're totally willing to lie out their ass. And why shouldn't they? They always get away with it.

I'm lucky I've still got an IRA.
I hope that was nice.  I have very fond high school memories of the person who posted this.  And really, I have no idea what her politics are, but I assume, given her field, that she's conservative, at least on economics.  But I don't know.  We'll see how or if she responds.