Money, Power and Wall Street

You owe it to yourself to watch the new Frontline two part special, Money, Power and Wall Street. It is as fine an understanding of where we are and how we got here as anything in our media system today. Part Two comes on next week, but already the major themes are becoming clear.

  • Complexity-No one except the “Quants” (the mathematical geniuses in the Big Investment Banks) who designed the Credit Default Swaps that grew to a $50 Trillion market in 8 years, knew how the securities operated or how risky they really were.
  • Transparency-The only reason the spreads were so big on the CDS market was that it was a totally Dark Market. There was no transparency. No one could tell the real values of the securities.
  • The Committee to Save the World-Rubin, Summers, Paulson, Blankfein, Dimon and Geithner were all part of a club that was going to make sure that none of their members would have to take a haircut on all the crap they owned. The Democrats are just as guilty as the Republicans that this happened.

If Obama’s second term looks like Teddy Roosevelt’s second term and he turns into the trust buster populist President, then eventually this wrong doing will be punished. Until then, watch this show and get really pissed off.

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7 Responses to Money, Power and Wall Street

  1. Rick Turner says:

    And “they” might wonder why “we” are cynical and pissed off?

  2. JTMcPhee says:

    Hey, Jon — “get really pissed off.” And then what? Having lived in the neighborhood, do you have any suggestions for halting the gross public and private nuisances being committed by the “Quanticrats?” Is there an “innovation” that’s in any way suited to shutting down the Casino? That place where the rest of us, the “Dumb money,” the “Muppets,” who aren’t even allowed to lay down our own bets at the main table and who would be stupid to do so, have to make good the markers of the tiny few of us, paying off bets denominated in enormous, unimaginable amounts of counterfeit “money” by laying down REAL wealth at the teller’s cage, when the Lords of Fake Nominal Value Money go and cash out?

    Or is how well APL is doing on the Big Board more important to the Innovators?

    Or is this, along with all the other wailing and gnashing of teeth, just part of a tacit or intentional (or both) campaign to teach the rest of us, by manipulating our own bile and crushing our aspirations with megatons of disappointment and frustrated righteous rage, that once again, “resistance is futile”?

  3. len says:

    The harsh reality is the Repugs are spinning this into a “and because of all of that now we need a really seasoned businessman who understands this instead of a lightweight in over his head” campaign. Thus they can sidestep any responsibility and reframe themselves as the wiser heads. All they need is a few more economic shocks or close analogs to add intensity to theis sensitive domain.

  4. Roman says:

    “If Obama’s second term looks like Teddy Roosevelt’s second term and he turns into the trust buster populist President, then eventually this wrong doing will be punished.”

    LOL…Why in the world would ANYONE believe this. The man’s actions speak louder than any well crafted speech, and he’s told EVERYONE bothering to watch these past three and a half years, who he is, and HE’S NOT THAT GUY!

    Are you suggesting Rubin, Summers, Paulson, Blankfein, Dimon, Geithner et al will be punished during Obama’s second term? Perhaps (and that’s a stretch) a sacrificial offering of an underlying or two, but no way one of these or others in their orbit submit to anything more substantial than a perp walk through the Rose Garden. Wait, they did that already.

    NO ONE of any consequence is getting punished. Why hold onto such foolishness??

  5. len says:

    Because he has to cope with the mid-terms, Roman. It is the course-correction election. If the Republican campaign proceeds as I outlined and instead of getting Romney, they get or lose some number of congressional seats, they will base their campaigns on forcing Obama into more mistakes. Granted, he isn’t the sword slinger some wish him to be but in a general election, Biden hit it on the head: Bin Laden is dead. GM is alive. So our president is not nearly the failure some wish him to be. The financial debacle was well underway before he got to office and we all know that. Put aside all of the tea party bagging and left lunatic fringe wailing and so far, he’s a solid B performer. America does not tend to get rid of the B-performers unless they get caught in bed with a goat.

    Should there be a head on a pike? Sure. There has to not only be justice but the perception of justice based on proven facts. This is extremely important to righting the ship of state and the economy because a bullied employee becomes a passive aggressor and hider of mistakes. That’s deadly.

    The caution I offer is from experience with feedback loops in flight control systems. It takes time for attenuated inputs and outputs based on matching measures at the input to measures at the output to take effect. As a result, pilots overcorrect and the aircraft demonstrates what is known a pilot-induced oscillations, aka, “porpoising”. If you watch films of planes in trouble in the air, you often see this. The pilot is wrestling the controls and the fly-by-wire systems are trying to correct but as the inputs increase in frequency, the oscillations increase in amplitude. At some point, it all goes to chaos, aka, hell.

    We’ve been very reactive the last few years and yet Obama has stayed fairly cool. I can quibble with a lot of his decisions (NDAA) but so far he is demonstrating that he learns and seldom overcorrects. A light hand on the sidestick is a very good habit to have when there are a lot of powerful intermediaries amplifying between the stick and the flight surfaces. So far, given the depth of our problems, he’s done ok. Not inspiring but ok.

  6. JTMcPhee says:

    I bet many of the aircraft sporting the “control” systems that you note that PIO behavior in, are also equipped with ejection seats, so the dumfuk or befuddled or desperately surprised pilots who do the inducing can punch out and settle gently and safely to earth, under a fine, Golden Parachute. “Systems,” like the financial thingie, and the whole GlobalMIC, probably have unperceived glitches and little kludges that the “PIO-lots” think are a feature, not a bug, even, as now, when they are imposing dynamic stresses on the structure that are way beyond deformation and well into torn-and-overtorqued terrain. To extend the metaphor way beyond its remove-from-service life.

    Mechanical and electronic feedback loop damping seems to me to be one hell of a lot simpler to understand and manage and counter than the infinity-squared interacting, intersecting, interfering, inter-operating, oscillating and amplifying loops that are the frame of 7.5 billion humans, mostly infected with the mental disease called “MOREism.” Murphy was a prolific breeder, and his teeming offspring are more subtle by far, more obscure, but definitely as deadly.

  7. len says:


    Is an Airbus has ejection seats, that’s news to me. Neither does a Blackhawk. It has a helluve set of springs on the pilot and co-pilot seats. They’ll kill you if you release them while leaning over them. That’s why the manuals have those big WARNING paragraphs.

    Maybe that’s what we should demand at the beginning of the commercials and talking head shows. WARNING: These liies are ripping you off.

    But it’s a fact of command and control: never scream into a microphone particularly one hooked to megawattage. Obama seems to get that and his predecessor didn’t.

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