If you don't like GS and the incestuous relationship with Washington everyone on Wall Street loves so much move to France indeed. Sarkozy: "Why should taxpayers have to pay for mistakes made by private banks?" http://euobserver.com/9/27557
You sound very young and sincere, but you need to consider a wider context. The ordinary people have been getting burned by Wall Street at least since the Reagen Administration. My first comments concerns the role of Wall Street in general, and GS is the quintessential member of that privileged community. A third world country is one without capitol, and Wall Street has made raising capitol by issuing stock hazardous, and have done substantial harm to the country. There are three ways that Wall Street is directly responsible for the deindustralization of America. 1. Leveraged buyouts destroying companies with R&D budgets, prudent reserves, and well funded pensions plans. 2. Naked short selling of small companies. 3. Requiring foreign manufacturing as a prerequisite for underwriting a stock issue. Companies that had retained earnings for R&D budgets, fully funded pension funds, and owned the ground they sat on became targets for hostile takeovers and leveraged buyouts. The company that I worked for in 1988 was slaughtered, went from 2800 employees to 70 in a hostile takeover because they were into heavy aerospace R&D and had enough retained earnings to weather the ups and downs of that business, but KKR helped Alcoa slice and dice them until only the secret military business exists. Now where do you think the funds came from for KKR to loan to Alcoa to make the tender offer? Well mainly from pension funds and insurance companies. That is right. Main street supplies the money to destroy main street jobs. This activity also resulted in the likes of ATT and IBM and Ford and every company that wanted to survive,spending money that they intended for R&D buying back their own stock instead of doing research. Wall Street would not/does not underwrite companies that wanted to manufacture in the US. It has deprived American Manufacturing of capitol, while enthusiastically underwriting enterprises whose business plan featured sending the manufacture of goods overseas that are 97% capitol intensive. That is that they had a labor component of 3%, less than the transportation cost back to the states. It made no sense but out the work went because WS wanted it that way. Truth is that we had a perfectly workable set of regulations put in place during the presidency of TR and FDR. They just don't allow the rich to get obscenely rich. You may speak for yourself, but I doubt that you have consulted an opinion pole. The truth is that Americans are willing to pay higher taxes for things like the environment and healthcare. (And Yes, I might not be as wealthy as you, but I have payed hundreds of thousands in taxes in my lifetime. ) We are doing that. The fact is that the people voted for the most liberal candidate available in the expectation of getting some fairer rules for the game enforced instead of ignored. Actually we have precisely those ethical issues with multinationals. The fact is that the profits from offshoreing are accruing to a few individuals while the misery and environmental harm accrue among the unemployed here and the exploited there. It is sick that Guys with guchi loafers, manicures and 50K smiles that must curse to prove that they are manly, get all worked up and angry when they think of trade that requires ethical international environmental and labor laws in the manufacturing country so that we don't export both jobs and misery. It is not suddenly wrong. It has always been wrong. It has just been that explaining how they were being put out of work with their own pension money, and their taxes and young people to fight wars and petrol the sea lanes and make the world safe for commerce, has up to this year, put most people to sleep. If it takes more than 30 sec to explain you can get away with almost anything for quite a while in this country. Now Goldman, a huge TARP recipient is not using that money to loan to business to manufacture. No they borrowing from the discount window at zero precent and using that taxpayer capitol to TRADE. Jobs created? A hundred? Goods and services created zero. Have Goldman and WS acted as a good citizens of the US. I don't think so.
fair points and I also believe we will have some sort of "clash" in the future when the majority cannot take it anymore and things are forced to change back to some more orderly way. But what I describe is a panic, something short of a revolution and I dont expect anything to happen soon. In the end of the day we always conduct business, our daily affairs, our relationships and dealings with others, measured by the "ethical guidelines of the day". We can't just say "because GS did not act as ethically correct today as compay xyz 100 years ago we need to punish GS". Measured by current norms GS did not behave any worse than other banks and financial institutions, they just played the game a lot smarter and some just cannot get over the fact they are not part of that smart chunk of the market. They get pissed off when they see the oil trader passing by in a Ferrari which he afforded himself when he longed oil all the way into 140 and sold it on the way down to 50. Just an example but I think it comes pretty close to how some guys here feel. They slowly realize they are not part of the game but on the losing side and now need to release their anger to those they perceive used "unfair" ways to take the money away from them. In reality the story is very simple: Guys like ByLoSellHi and others are on the retail side and other guys on the institutional side are...you get the point. Of course there will always be a few winners on the retail side as well and thats what keeps the ball rolling BUT its hard to deny that working at an institutional trading desk you are presented with a free upside call option. If it wont work out you move on to the next desk down the road. Some may hate the game is played like this but in some way its played in every other industry in the same way, albeit on a smaller scale. Accept it or leave the game.
Maybe the best post in here so far and many good points. I do believe I possess a pretty balanced view and grasp of the larger picture. I encourage you to consider that corporations still maximize their profits as their number one priority, not to benefit the welfare of the large. That, I claim, is the ONLY way capitalism works and we chose to live and work in a capitalistic environment. Everything else is for the philosophers to discuss. Since when have the ordinary people not gotten burned in history. Those who work hard AND take risk AND maintain networks and relationships prosper. Working hard is not enough and never has been. I disagree with all your below 1,2,3 points: 1) Underfunded pension plans is the sole responsibility of corporates themselves not because of Wall Street. The underlying core of the problem is how short-sighted corporate America has become. We should not even concern ourselves with quarterly results, its absurd. Of course this will cost jobs on WS but that, I believe, would benefit corporations and their work force as well as investors. 2) I have no issue with naked short selling. If I want to short a company, regardless of its size why should I not be allowed to do so? The bank may let me short sell, they are in turn long, how they hedge themselves is their business. If they want to be fully hedged then they sell company stock as well. If there are less buyers than sellings then, yes, this will drive down the stock of such company. But so what? The problem originates with the corporates themselves. Many small-cap business owners believe they can start a business and cash out after ten years. This is only possible when they issue equity. If the company/product is crap and this is public perception as well then there will be less buyers than sellers in this company's stock. And taken to the extremes the stock will go to zero and the company is forced to close doors or be bought up. This is a concept which has been around for centuries and I do not understand why it is suddenly opportune to point all the fingers at the financiers rather than at bad company management. I have a much bigger issues with some irresponsible corporate management that schmoozes around and sails in their yachts while their company goes down the river than the sell-side trader who shorts the stock. In short it is corporate management that has given up control of the company to gain short-term gains and all that goes along with it. 3) De-industrialization was necessary and we all knew that for decades. We all knew it had to come. The problem in America, in Japan, in Europe today is that we are too slow to adapt to this new environment while the BRICs are a lot more flexible and gain market share. Industrialized nations are supposed to move on to the next higher level. We are supposed to aready generate ample revenues and profits with the business we will have to be in for the next couple hundred of years: INFORMATION, INFORMATION, INFORMATION and the services that go along with that. Let those countries that have a comparative advantage produce steel, harvest grains, produce retail products. We are forced to move up the food chain and most have not fully realized that fact. The biggest problem today is lack of oversight and regulation of the CORPORATE market not the financial market. Pension funds should not be allowed to invest in a lot of risky asset classes. Companies should not be allowed to tender offers for companies they are not able to properly finance. (example Porsche->VW). If there were proper regulations and oversight then financials would not even be permitted to push their products to a large percentage of corporations. The bigges problems today I see in the corporate sector and not the financial sector. Again, as I mentioned before, I would have rather seen another 3-4 banks fail and zero tax payer moneys used than what actually happened, even though I work for a financial. But you cant blame the guy who picks up the hundred dollar notes that were thrown on the street by government. Politicians and the administration is asked to enact SMART regulation but the issue is that most in D.C. simply do not understand what they are talking about PLUS American lobbyism is now biting back. What GS (and every other bank has done is this): They sold a house that is located next to a kindergarden and small sized company. The potential buyers who came to inspect the house liked it and also liked they payed less than what they expected to pay relative to the comp. Only issue was the open house took place on a Sunday when the kindergarden and company was closed. The buyer who moves in on a Monday wonders what he bought into, hearing a lot more noise and seeing a lot more traffic around the house. Unethical? It could have been mentioned but the buyer could as well have simple driven up to the house on any weekday and have done his due diligence. Nothing done wrong on either side and thats how business is conducted on all levels in America today. In my opinion politicians are running a huge campaign and do a lot of finger pointing towards financials to distract from the fact that it was them who failed in their regulatory oversight.
You forgot to mention that a week before, GS has paid the kindergarten to take a one month tour of Europe, and that they actually own the small business next door, and sent everyone on a one month, all paid for, golf outing, so even if the customer happened to drive by on a Monday, the picture would not have been any different. Is this ethic, probably not, but it is how capitalist game is played.
Thanks for the reply! I guess where you and I would differ is that (like you) I hope for panic...but, I prepare for "social distortion" Regards, gastropod
So let's pretend that everything GS did was within current legal bounds, and as long as they did, anyone that has a problem with it is just jealous and opposed to capitalism. What if your bank found a legal loophole so they could siphon money out of your account? Better not complain about that. If it's within the bounds of the law, then you're just jealous and opposed to capitalism. "Show me where (the bank) acted illegally" and then you have a grievance - this statement would follow your logic to a T. It's frustrating for most people when they run into the rare individual that rationalizes things this way. Most would see the bank example from above and intuitively see that it's wrong without needing a detailed explanation or a copy of the law that shows why it's wrong. It's similar to if a robot started arguing points on ET. A huge amount of time would be spent frustratingly bridging the gap between the robot and basic human discernment. Most people know that torturing animals is bad, but I bet my computer wouldn't cringe if I kicked my dog in it's presence.
lets go with this comparison. Going a step further some could argue that charging bucks here and there for late payments or bounced checks is a form of draining a bank account the legal way. And I would probably have to shut up if it happened to me, so yes, I walk my talk. Another fair comparison is fx bucket shops. People who trade with them and experience huge spreads during news releases, unbelievable levels of slippage, platform shut downs, and and and are to be blamed when losing money even though the broker acted within the legal framework. This is corporate American as most Americans love it (so it seems to the rest of the world at least), it lets the small Joe participate in the big game among all the sharks, so small Joe should not scream when bitten into the ass.
The system is tilted in their favor. Whether you think that is capitalism or socialism depends on your point of view. For instance, even when "caught" doing something illegal, financial companies merely pay a fine, chalk it up to a cost of business, "admit no wrongdoing", and keep on keeping on.