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More Corruption On Wall Street

Hedge fund masters of the universe in trouble. We’ll look at what’s coming out.

Hiding his face beneath a red hooded jacket, hedge fund portfolio manager Donald Longueuil leaves federal court Tuesday, Feb. 8, 2011 in New York. Longueuil is facing obstruction of justice and conspiracy charges stemming from an insider trading probe by federal authorities. (AP)

Hiding his face beneath a red hooded jacket, hedge fund portfolio manager Donald Longueuil leaves federal court Tuesday, Feb. 8, 2011 in New York. Longueuil is facing obstruction of justice and conspiracy charges stemming from an insider trading probe by federal authorities. (AP)

For most people, hedge funds used to sound like some kind of lawn service.  Years of trouble in Wall Street finance have clued us in.  Hedge funds are some of the sharpest investors out there.  Working on the big-money edge.  Take that edge too far, and you can have insider trading.  Unfair advantage.  Broken laws.

Right now, a huge investigation is circling around Steven A. Cohen, one of the biggest hedge fund masters of the universe.  No charges against him, but a lot of billowing smoke.  And an education for the little guy.

This hour, On Point:  a hedge fund hero in hot water.

-Tom Ashbrook

Guests

Peter Lattman, reporter for the New York Times’ Deal Book.

Arthur Laby, professor of law at Rutgers, where he specializes in securities law and regulation.

Robert Khuzami, director of the Division of Enforcement of the U.S. Securities and Exchange Commission.

From Tom’s Reading List

Bloomberg Businessweek “The possibility that Cohen might share the fate of fellow hedge fund billionaire Raj Rajaratnam, who was found guilty of conspiracy and securities fraud in May 2011 and sentenced to 11 years in prison, has caused a frisson of anticipation in the financial world. On Nov. 28, the president of SAC Capital, Tom Conheeney, told investors that the Securities and Exchange Commission is considering filing a civil suit against the firm.”

The New York Times “In March 1991, Michael R. Milken, once the richest and most powerful financier of his generation, entered prison, signaling the end of an era of junk bond-financed hostile takeovers and high-visibility prosecutions that law enforcement officials hoped would deter insider trading for generations.”

Forbes “Many of these convictions stemmed from the government’s ability to uncover widespread conspiracies.  Raj Rajaratnam, the founder of the hedge fund Galleon Group, stood at the center of one of the largest of these insider trading networks.  According to trial testimony and court documents, his web of informants provided illicit information on companies ranging from tech bellwethers like Intel and Advanced Micro Devices to banking giant Goldman Sachs.  In all, nearly two dozen people associated with Rajaratnam’s insider trading scheme have pleaded guilty or have been convicted by a jury.”

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  • Mike_Card

    Wall St. crashed & trashed the world’s economy, yet nobody has been brought to trial, let alone convicted and incarcerated.  Why?  Because Wall St. owns Congress and writes the laws.  Hence, no laws have been broken.

    Insider trading and Ponzi schemes are small beer.  The financiers’ immorality and theft run directly to Washington.  And by the way, Ed, the only place worse is Vatican City.

    • nj_v2

      Wall Street’s co-optation of the government is not particularly new.

      Ruppert is a bit full of himself, he’s prone to colorful flair bordering on occasional hyperbole, and he should stop making predictions, but if one can bear with it, this film of a lecture, interwoven with some other footage, summarizes and ties together a lot of threads that connect apparent disparate events of recent U.S. history.

      It will be knee-jerk for some to dismiss this as “conspiracy theory,” but coincidence is beyond implausible, and everything is documented.

      http://www.youtube.com/watch?v=fZNvSX3A7pc

      Two+ hours, so one has to set aside some time. Hard to stop watching, though, once one starts.

      • Steve__T

         Thanks for the link

        • nj_v2

          You’re welcome!

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        I don’t want to say “it’s all about the mediascape”, but I’d like to add a new tangent here.

        Over the last fifty years our fourth estate has become fascinated with comforting the comfortable.

        For one example: In the ’80s, “Mohair Sam” Donaldson had (at various times) a fairly undisclosed subsidy in the half-million-dollar range for a mohair ranch in the west.

        The coverage about how much money the WaPo folks make from Kaplan Prep Tests is scarcely better today in the internet age. If that doesn’t do something amazingly bad to their coverage about education, I’ll eat my hat.

        Isn’t there a part of you who wants to know what David Gregory or Diane Sawyer’s stock portfolio looks like?

    • margbi

       When, oh when, is somebody going to jail over this?

      • DrewInGeorgia

        Obviously nobody’s going to jail. just look at the HSBC fiasco. If directly assisting Terrorists with their money laundering doesn’t land all involved in the clink nothing will. You pay your fine and go about your business. Move along, nothing to see here.

        • Don_B1

          @Mike_Card:disqus  @margbi:disqus @DrewInGeorgia:disqus 

          See my comment on the HSBC scandal to Ray in VT below, where I linked to a program on “The World”:http://www.theworld.org/2012/12/british-banks-settlement/

          • DrewInGeorgia

            Thanks for the link, I hadn’t read that brief piece but I did already know what ‘the deal’ was. Hate to be repetitive but: You pay your fine and go about your business. Man I’m sick of Business As Usual…

    • TheDailyBuzzherd

      Mike: “Survival Investing” by John Talbott.

  • DrewInGeorgia

    “Hedge fund masters of the universe in trouble.”

    By The Power of GreySkull!

    We’re shocked! Shocked we tell you!

    After the general shoulder shrugging that followed the LIBOR scandal once it came to light Nothing’s Shocking. Play it again Sam.

    • Ray in VT

      Hi Drew.  I’m glad to see that someone has already made a He-man reference.  It saves me the trouble.

  • nj_v2

    “War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses.

    I believe in adequate defense at the coastline and nothing else. If a nation comes over here to fight, then we’ll fight. The trouble with America is that when the dollar only earns 6 percent over here, then it gets restless and goes overseas to get 100 percent. Then the flag follows the dollar and the soldiers follow the flag.

    I wouldn’t go to war again as I have done to protect some lousy investment of the bankers. There are only two things we should fight for. One is the defense of our homes and the other is the Bill of Rights. War for any other reason is simply a racket.

    There isn’t a trick in the racketeering bag that the military gang is blind to. It has its “finger men” to point out enemies, its “muscle men” to destroy enemies, its “brain men” to plan war preparations, and a “Big Boss” Super-Nationalistic-Capitalism.

    It may seem odd for me, a military man to adopt such a comparison. Truthfulness compels me to. I spent thirty- three years and four months in active military service as a member of this country’s most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle- man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism.

    I suspected I was just part of a racket at the time. Now I am sure of it. Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical with everyone in the military service.

    I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912 (where have I heard that name before?). I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.

    During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”—Excerpt from a speech delivered in 1933, by Major General Smedley Butler, USMC.

  • tagubajones

    Ah, yes…more Masters of the Universe shown that they are so only because they’ve been skirting or breaking the law.

    Oh, to write my own rules and then proclaim my greatness…

  • MadMarkTheCodeWarrior

    There were plenty of laws broken on wall street that fostered this economic ruin. In particular: liars’ loans. many of those subprime mortgages were  liars’ loans. Fraud was rampant in origination. It was apparent to everyone in the industry. The banks knew this, thus were guilty of fraud when they resold them. The ratings agencies knew this so they were guilty too. The originators of derivatives knew this too so they were guilty. The originators of credit default swaps… guilty. Everyone was thinking they wouldn’t get called out for such minor acts of fraud. Multiplied by several million counts, the fraud wasn’t so minor.

    The collateral damage looks to have been 100 times the actual problem. It’s time for those who went to the party to help pay for cleaning up the mess!!!

    Maybe after we decide weather we’re going over the fiscal cliff or not, Justice will start acting? With Congress OWNED by many of those greedy parasites, maybe not.

    • Flytrap

       Why were they allowed to give out those “liars loans”?  Some of us say it was because of the Community Reinvestment Act and the fact that those “liars loans” were backed by Fannie and Freddie.

      • BHA_in_Vermont

         They were “allowed” because the bank making the loan had no skin it it. They knew they would be selling it to someone else.

        For my money, a bank making a loan should be required to hold 20%  interest in the loan. Then they would be careful about who they loaned money to. Just like the good old days.

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          Don’t forget that many lenders were being paid by the amount loaned, encouraging lots of loans and lots of inflated valuations.

          Now excuse me while I cue up “It’s A Wonderful Life” and wonder how that honest old Mr. Potter ever got anywhere in life, loaning out his own money.

        • Ray in VT

          That reminds me of a story that one of my former co-workers here in Vermont once told me.  He said that he and his wife were trying to sell their place in Wolcott back in the 1970s.  They had a taker, and members of the board of the local bank came out to look at the place on a Saturday morning because it was their money/jobs on the line if too many local loans went bad.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Speaking of Bailey Bros. Building and Loan…

          • Ray in VT

            I assumed that that was an It’s a Wonderful Life reference, but I had to look it up.  I’ve never actually seen the movie, but SNL’s Jewish version was pretty funny.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Yes it is. I mean, Vermont isn’t Seneca Falls, quite, but the ’70s and the ’40s lenders are a lot closer together in spirit than to the folks we’re discussing here as of late.

            The Andy Samberg one is good. I also recommend the “alternate ending” version from the Dana Carvey – Dennis Miller years. Cathartic.

        • Flytrap

           No skin in it because of Fannie and Freddie.  Without their underwriting, do you think the real estate market would have gone boom? 

          • Ray in VT

            Fannie and Freddie certainly do deserve some blame in this whole mess, but they weren’t the main culprit.  Take a look at Countrywide.  They sold a bunch of their bad loans to firms, including Fannie and Freddie, but others as well, by misrepresenting, i.e. lying about, the quality of their products.  They saw a way to pass the buck to somebody else and turn a quick buck, and they would have done it if they hadn’t had Fannie and Freddie to sell to.

          • Flytrap

             Fannie and Freddie were the largest buyers of Countrywide’s loans.  http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQFzywOMo.1I  Without federal backing, the firms purchasing the bundles would have done a bit more due diligence because their heads would have been on the chopping block.  

          • Flytrap

             Just came across this “Shoddy subprime lending expanded due in large part to federal housing
            regulations that institutionalized “flexible” mortgage underwriting
            standards for loan originators and government-backed mortgage giants
            Fannie Mae and Freddie Mac.Read More At IBD: http://news.investors.com/ibd-editorials-perspective/120412-635699-recession-function-of-democrat-housing-regulations.htm#ixzz2Elv6cgMJ

          • Ray in VT

            I’m a bit skeptical of Investor’s Business Daily due to what I see as a conservative or market-based slant, but the articles makes some interesting points.

            I suppose that it depends upon what “flexible” means.  Requiring 10% instead of 20% down and allowing 45 or 48% debt to income versus 40% are one thing, but NINA or Ninja loans are something again altogether.

            The article here makes some points arguing against the CRA and Fannie and Freddie being major culprits:

            http://www.cbsnews.com/8301-505123_162-39741513/fannie-freddie-and-the-cra-are-not-responsible-for-the-financial-crisis/

            I think that both Fannie and Freddie did play some role in fueling the problem, but I think that it was there anyways.  I think that the ratings agencies are also highly at fault.  I think that one of the articles that you, or someone else, linked to, cited that either Fannie or Freddie starting buying up some subprime loans because they were AAA rated, and the ratings agencies have been roundly criticized for having a stake in giving a good rating in order to insure business.

            Again, certainly I do not think that Fannie and Freddie are blameless here, but a lot of this could have been avoided if a lot of these private institutions that were originating these bad loans, especially the stuff like NINA, had not been able to securitize the mortgages and get rid of their own risk or run up the adjustable rates.

          • Flytrap

            Thank you for the article you referenced and your reply.  The article was written by a leftist economist  that included a link to another article that contained this: “It is the sense of the Congress that efforts to enhance
            by the protection, limitation, and regulation of the terms of
            residential mortgage credit and the practices related to such credit
            would be incomplete without enactment of meaningful structural reforms
            of Fannie Mae and Freddie Mac.” http://www.goingeasy.com/subtitle_h.htm article.  Personally, I think this is an area that needs to be discussed more.  I see your reluctance to blame regulations for causing the problems and I understand that.  But I also understand that greed is easier to comprehend than other motivations.  If you are greedy, the most $, stuff etc gets you motivated.  If you are out for social justice, gay, black jewish rights etc, your motivation is a little more opaque.  And that is what I see here, opaque motivations.  Subprime loans to irresponsible borrowers won’t make you any money in the long run, you’ll go broke.  But a goal of “equitable” lending, backed by the govt, is another thing altogether.   What is the motivation?  What is the criteria?  What is the punishment for non-compliance?  Now we are into a more complex area with artificial goals to “right” a perceived “wrong.”  It’s going through the looking glass and assuming what is there is our reality. 

          • Ray in VT

            and thank you for your response.  I think that there was some motivation to attempt to correct for some noted instances of discrimination against certain minorities.  I don’t have time to do a thorough check, but here’s a Times article that seems to address the issue:

            http://www.nytimes.com/2007/10/15/nyregion/15subprime.html?ex=1350187200&en=a9978e04a9864642&ei=5088&partner=rssnyt&emc=rss&_r=0

            I do think that the major problem was greed.  People figured out how to pass a bad deal off to someone else and walk away with cash.  There were also some references to Countrywide inflating the costs of other services in the lending process.  It’s all pretty terrible.

            I think that there should be some strong criteria to ensure that people do have adequate resources, and I know that lending standards have tightened up since the crash, which is probably good on the whole, although some people who do have resources and a good track record are getting shut out of the process.  I’m willing to bet that both of us know people (at least I know that I do) who pay more in rent than it would cost them to get a mortgage and pay the taxes, but they’re falling short of the standards.  Certainly one criticism that my boss had this morning when I spoke to him is the lack of prosecutions in cases like HSBC, and I found an article that referenced financial fraud prosecutions having gone down every year since 1999.  So if those are the conditions, where maybe the penalty, or the risk of prosecution, isn’t that great, and the potential reward is high, then some people are going to be tempted to cut corners and cheat the system.  I just think that that is an ugly aspect of human nature.  Have a good evening.

          • Flytrap

             For space constraints.

              To have this discussion, we are going to have to be frank.  Before the CRA, there were standards which for the most part, existed into the ’90′s.  You had to have  20% down and proof of a job that showed you could afford the mortgage.  The problem is, generally, the darker people get, the farther away from those standards they get.  By using one standard, you are discriminating against an identifiable group.    The legal theory, which you are going to hear ALOT more about in the next few years, is disparate impact. 

          • Don_B1

            The CRA had no requirements for lowering standards for the loans.

            It was passed to address the problems that people living in inner cities, etc had because of discrimination, and not because they could not meet existing standards.

            What you seem to be citing is a widespread myth circulating in conservative circles.

          • Flytrap

             You are being

            intentionally obtuse while not providing proof that you are correct. 

            ing obtuse. 

          • Flytrap

             Check ou on theis source and then refute it.  http://papers.nber.org/papers/w18609#fromrss

          • Don_B1

            I liked the Bloomberg story in Flytrap’s previous post, but while showing “large” purchases by the GSEs, it did NOT support his claim of them being the “biggest purchaser” of sub-prime loans and indicated that they generally bought the least risky.

            But it showed, in 2008, that the Bush administration had been pushing the GSEs to buy MORE on 2005, when they first went “big-time.”

            Many investment banks had started that business even earlier, with results that led Democrats in Congress to request Alan Greenspan at the Fed to use its statutory power (provided earlier by Democrats in early 1990s) to regulate the Shadow Banking industry, which he refused, saying that fraud did not need to be regulated as the market would work it out.

          • Flytrap

             Provide a link proving your point, we can all talk a good game.

          • Flytrap

             http://papers.nber.org/papers/w18609#fromrss

          • Flytrap
          • Gregg Smith

            Didn’t Chris Dodd get a sweetheart deal from Countrywide while he was chair of the Senate Banking Committee? 

          • Ray in VT

            Something of one, along with Democrats Kent Conrad and Edolphus Towns and Republicans Howard P. “Buck” McKeon and Elton Gallegly according to a House investigation.  Plus they cut deals to Fannie executives and falsified loan information.  All in all they were a pretty horrible bunch at Countrywide, and Bank of America’s acquisition has cost them something to the tune of $40 billion.

            http://www.huffingtonpost.com/2011/12/05/countrywide-whistleblower-mortgage-fraud-systemic_n_1129637.html

            http://www.bloomberg.com/news/2012-07-05/countrywide-used-loans-for-favor-with-fannie-mae-report-says.html

            http://www.dailyfinance.com/2011/01/25/bank-of-america-sued-for-countrywides-mortgage-sins-again/

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Dodd came in for criticism for how he “handled it”. Like Whitewater, it seemed all the loud questions were the most menacing things about it. The more examining done, the less headlines were created.

        • Flytrap

            Just came across this “Shoddy subprime lending expanded due in large part to federal housing
          regulations that institutionalized “flexible” mortgage underwriting
          standards for loan originators and government-backed mortgage giants
          Fannie Mae and Freddie Mac.
          Read More At IBD: http://news.investors.com/ibd-editorials-perspective/120412-635699-recession-function-of-democrat-housing-regulations.htm#ixzz2Elv6cgMJ

      • MadMarkTheCodeWarrior

        I chaulk it up in part to the Laissez-faire policies of the Bush administration or as I prefer it lazy fairy. Its accomplished in part by Congress underfunding oversight and proprietorial organizations. 
        Lazy fary governance is an oxymoron. It essentially means unethical.

      • Don_B1

        The CRA did not apply to the commercial loans made by the “shadow banks” and the GSEs did not get involved until early 2005 or so, when they saw they were losing market share of the mortgage market big time.

        The CEO of Countrywide (Mosilli?) told the CEO of one of the GSEs (Franklin of Fannie Mae?) to take more of his mortgages or he would sell ALL of his “product” elsewhere. Why he isn’t in jail, I don’t know.

  • Ray in VT

    On a related note, HSBC has acknowledged wrongdoing regarding not doing enough to combat money laundering, and it has agreed to pay a $1.9 billion dollar fine.

    • DrewInGeorgia

      Sickening isn’t it? I just replied to margbi with an HSBC reference. It really is disgusting.

      • Ray in VT

        Yup.  It really is.

    • BHA_in_Vermont

      And the BBC reports someone from the bank said “It is the cost of doing business”.

      In other words, part of their business plan is to expect to pay fines for illegal activity when they get caught.

      • DrewInGeorgia

        Ditto for the Coal and Petroleum industries.
        Oooops, I just had another spill….

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        Wow. That’s like “XYZ Trucking”, which accepts parking tickets in Manhattan as a cost of doing business.

        The fines are not large enough. These banksters need to be taught the meaning of the word “punitive”.

    • Don_B1

      It goes even deeper; read and listen here:

      http://www.theworld.org/2012/12/british-banks-settlement/

  • wauch

    If anyone thinks that Steve Cohen and SAC’s 30% 20+year over year returns are legitimate I have some land in the everglades I want to sell them. As S. Das wrote in “Traders, Guns, and Money” the only way to make money on Wall Street is insider information or overwhelming force. Cohen and his SAC mafia have utilized both effectively……until they didn’t!

    • Don_B1

      The other way, and hard to show illegal, is when the transaction is opaque, which is what happens with “over the counter” sales of derivatives. When the buyer has difficulty evaluating the worth of a “product,” it can be sold at a price well over its worth, as Goldman Sachs did with the derivatives it put together so the hedge fund guy could bet against them and take Goldman’s clients to the cleaners.

      This is why Wall Street is fighting Dodd-Frank with every last ounce of its ability, to keep transparency to a minimum.

  • J__o__h__n

    ON POINT, PLEASE END THE ANNOYING POP-UPS.  People who listen to the show are smart enough to know what the next show is by looking at the homepage (which one has to visit before going to the particular show page). 

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      Okay, who’s not seeing these pop-ups besides me?

      (No, I don’t feel like I’m missing anything.)

      • Ellen Dibble

        Every time I hit refresh, to bring in new posts, I see a pop-up in the lower right-hand corner and have to click it closed in order to see that corner of the screen.

        • J__o__h__n

          Don’t you find it helpful?

          • Ellen Dibble

            Hah!  Maybe if someone refreshes five times, they can set it to stop?  They can figure they’re trying to listen, read posts, think of comments, type comments, all at once, and adding in blocking the pop-ups just seems like too much.

          • DrewInGeorgia

            lol

        • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

          Just FYI, I’m running NoScript, in which I’ve allowed wbur, and disqus, and a few others. I have blocked scripts from cloudflare and scorecardresearch.

          • Ellen Dibble

            Thanks for the tip.  I’ll try that.

          • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

            Sure. But (not to pimp them, no professional or advertising interest on my part) thank Lifehacker,  where I get all my best “don’t muck up my internet experience” ideas.

    • Steve__T

       Not only that, ITS WRONG!

  • toc1234

    funny how On Point never seems to get around to the ‘corruption in the public sector’ story….  where public officials use taxpayer money as their personal campaign/slush fund…

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    Wall Street? How about Pennsylvania Avenue? Congress has no laws against them insider trading on the legislation they pass and kill. And their investment returns (much higher than average) bear this out.

    As if they haven’t been juggling their investments based on what they know about how the “fiscal cliff” will shake out.

    • myblusky

      Yes – it’s shocking Americans do nothing about this or even seem to care. Only a few politicians have tried to make this illegal.

      Martha Stewart went to jail for something our politicians get to do on a regular basis and its legal for them.

      Sometimes it feel like the whole country is run by the mob.

    • adks12020

      FYI- Congress passed a law this year with regards to insider trading…it’s not as tough as I would like but it’s a start and one provision of it involves a study into making it stronger within a year or two. http://www.nytimes.com/2012/03/23/us/politics/insider-trading-ban-for-lawmakers-clears-congress.html?_r=0

      • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

        Sadly, I think one part of the bill they killed was regulating the people they could pass information through, basically the folks being discussed this hour.

  • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

    So much of Wall Street is not investing – it’s legalized betting.

    • DrewInGeorgia

      The Global Markets have turned into nothing more than a World Wide Casino. They should just go ahead and merge all of the markets under a WWC header.

      • http://pulse.yahoo.com/_Y6CO5C2HE4WM2OYGCDVWGPRXXM oldman

        It’s just gotten too easy for someone to bet on a loss, throw a few rocks into the gears, and collect. There is something inherently wrong with a system that can make people rich from failure.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      With one big exception: A casino makes the most money when it runs a square game. With the odds slightly in its favor, a casino needs to protect its good name so as to not scare off repeat business.

      Wall Street? Too many of them want that big crooked score. And the people competing with those “Masters” feel compelled to “compete” with the unreality of that, or folks won’t want to put their money there.

      • Don_B1

        The incentives are all wrong. Its too often the combination of “too big to fail” at the institution level, and we’ll be rich and “you’ll be gone and I’ll be gone” when the problem comes to light at the individual level.

        Worked for the perpetrators at A.G.I.’s renegade London branch.

  • Michiganjf

    For every trade there is a “winner” and a “loser…”

     These greedy jerks use their money, influence, resources, and access to rig trading in their favor, costing the “average,” long-term investor profits at every turn.

    Long-term, stable investing is healthy for both companies and the profits of the MAJORITY of investors!!!

    The extremely wealthy have ruined investment for EVERY INTERESTED PARTY except themselves!

    REIGN IN THE GREED, and return a semblance of health, fairness and stability to Wall Street!

    • Michiganjf

      “Resources,” BTW, as opposed to just money, include such things as banks of high-speed supercomputers located on PRIME REAL ESTATE, such as the exact same building as NASDAQ… when micro-seconds count, even the proximity pays off.

      Of course, this sort of advantage is only available to the extremely wealthy!

    • Don_B1

      When the profits of the financial industry rise from somewhere around 10 or 12% of all business profits in 1975 to OVER 33% now, you know something is wrong.

      One reason is that there is too much money in too few hands, so those with a lot of money are willing to risk a good-sized portion in speculative ventures (derivatives, etc., which replaced the trading profits squeezed down by open trading through computers, etc. — e.g., Charles Schwab) which can be largely unproductive for the whole economy.

  • BHA_in_Vermont

    Sounds a lot like vulture capital firms – you pay them a whacking huge amount of money to do their job, then pay them again if you make money. As if the initial amount wasn’t disgusting enough.

    I bet the hedge fund guys make most of their money in “deferred interest” taxable at only 15%.

    • Don_B1

      Look into the story of the inventors of Siri, who hired Goldman Sachs to find a worthy buyer of their company. Goldman suggested a company with whom they had done some business with in the past, but the company went bankrupt within a year from shady dealings it was running at the time Goldman recommended them, leaving the inventors unpaid.

  • eded1122

    How much of Cohen’s success is attributed to high-frequency trading? 

    I know insider trading is an issue, but isn’t HFT also a problem?  These folks are abitraging small changes in the prices in real time and essentially dictating how the market moves and riving our small investors…. 

  • DrewInGeorgia

    The only way to stop the abuse is to remove the incentive. Making what were once considered illegal or unethical behaviors acceptable has brought us here, where do we go now?

    • Don_B1

      One easy to implement solution to at least part of the problem is a small transaction tax, which makes speculation less attractive.

      Which is why the financial industry is against it.

  • J__o__h__n

    I’m more outraged by the legal cheating of claiming income as capital gains by the hedge funds. 

  • http://pulse.yahoo.com/_WDIOY7RQ3F5EAR4EAP5FKRS52M bethrjacobs

    Ban government appointees from working on Wall Street for ten years after they leave office

    • Mike_Card

      And vice versa.

      • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

        B-b-b-but JahbCreatorzzz!

      • Steve__T

         Agreed, you beat me to it.

    • Don_B1

      Or as a lobbyist or for a lobbyist.

      But easier said than done, by a Congress whose every member, or almost, sees that as where s/he will endow their retirement.

  • ToyYoda

    I can see how you can regulate hedge fund the category; the definition, but how can you regulate hedge fund the idea?  Meaning, what’s to stop me from getting my rich friends’ money and starting an organization that skirts the legal definition of a hedge fund?

  • http://pulse.yahoo.com/_WDIOY7RQ3F5EAR4EAP5FKRS52M bethrjacobs

    You can not regulate what you are going to work for

  • http://www.facebook.com/people/Paolo-Caruso/1778940602 Paolo Caruso

    Fitting in with yesterday’s topic of Syria, is the underlying problem of Wall Street, which is the ability of a private bank, called the Federal Reserve, to create the money at will and pass it on to special friends at no interest, who in turn gamble, manipulate and inflate stock prices, at the expense of the rest of the population some of who actually create real goods and services for a living.
    The biggest threat to US dollar hegemony and Wall Street is when Saddam starts to sell oil in Euros, or Ghaddafi threatens to sell oil in Dinars.  Iran has created its own oil borse and is already ignoring the dollar, which is why propagandists like Deborah Amos et al keep beating the war drums.

  • JaneseM

    I think it’s also important to point out that hedge funds make a significant part of their living by trading on momentum, taking large positions to move markets up or down to suit their purposes.  Taken in this context, insider trading has even greater potential to harm all other market stakeholders.

  • J__o__h__n

    Civil penalties are not an effective deterrent.  People need to go to jail. 

    • DrewInGeorgia

      Agreed. That still won’t stop the madness though. Someone will wind up behind bars but we both know it won’t be the biggest beneficiaries. It will be the sap that someone else slammed the lid closed on while their hand was still in the cookie jar.

    • BHA_in_Vermont

       Yeah, nothing like a few years in the can to make one think about their actions. A fine? No biggie, they’ll recover that in no time. They just manage their “risk” so they make more than they are fined.

  • MadMarkTheCodeWarrior

    We have laws for one simple reason: few are immune to the corruption of power and wealth. When you consider who is drawn to Wall Street, self governance is a philosophy that can only be promoted by the fundamentally corrupt, profoundly naive or remarkably stupid.

  • BHA_in_Vermont

    Caller Peter is right on. Same with taxes. As soon as a law is written to fix things, the rich find a way around it.

    • Steve__T

       Because they pay the writers, of the laws to write in loopholes that they then use to their advantage. They always find ways to stack the deck in their favor. Or challenge the laws in complex ways that no one want to touch them. They play with words and numbers.

      Remember Clinton’s statement ” That depends on what the meaning of is is” and thees crooks are way better at it the he was.

  • ToyYoda

    Didn’t everyone here see Inside Job?  It’s a documentary narrated by Matt Damon.  Go see it if you haven’t.  You owe it to yourself and to society to watch this film several times.

    In that documentary Eliot Spitzer was one of only a few people who was legally going after the corrupt Wall Street traders and bankers during the booming bubble.  

    If you read between the lines, it was clear that the Feds had it in for Eliot Spitzer.  So as much as I like regulators going after corruption now, where were they during the hey days of the bubble?  They are not angels looking for the good of the little guy.  I really believe they are just saving face.

  • Steve__T

    This just shows that the OWS crowd was in the right place with the right ideas. There are no ethics on WS. Thees crooks need to be brought to Justice. Fine them and jail them. 

    • Don_B1

      And change the incentives!

  • doggypeg

    Tom–I’d like one of your guests to answer this question. The stock market with all of its various offshoots has a tremendous impact on the entire country. Essentially our jobs, our pensions, our communities, our government services are all dependent on a vast gambling system. Is there no other way to ensure that businesses get funds to grow on?

  • SuziVt

    Has the news media or government been investigating these Wall Street cases as diligently as they should? Sometimes I wonder if there is a conflict of interests. If I, for instance, had hundreds of thousands or millions in stocks, would I be as upset with the status quo of the stock market? It seems there is so often a mixture of admiration and suspicion. I’m not making hundreds of thousands in the stock market, and I may not know what I’m talking about, but I do know we need much more control by the government to make sure these people don’t take advantage of a dubious advantage.

  • mariaconz

    “Wealth creation”? Private hedge funds? More like wealth theft. Charles H. Ferguson has a field day with Wall Street’s corporate criminality in “Predator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America.” On page 190 he lists real crimes committed by companies like AIG and Goldman Sachs which haven’t been prosecuted.

  • Billy Ray Bingham

    Locks are made for honest people.  

    They can also slow down the dumber crooks.

    • DrewInGeorgia

      Unless the dumber crooks have been provided with The Ultimate Lock-Pick Kit…

  • ToyYoda

    I use to work as a consultant to hedge funds.  It was so easy to be an inside trader.  I use to look at the books of these large hedge funds and investment banks.  And from that, I could have made my own bets by just looking at what positions they had, or were going to make and get in before the money flows in.  

    I didn’t, but you’d be amazed at how much information that alot of people could capitalize on, but don’t.  I wasn’t a high ranking, but alot of this information is readily at hand.  In my case, I was just a software engineer making sure that software was working properly. And often I had to look at the books, positions, cash flows, etc.

    I understand we need to regulation, but in practice, to prevent it 100% completely, would mean 4th Amendment violating, intrusive monitoring of everyone who has anything to do with hedge funds.

  • http://www.facebook.com/profile.php?id=1266410766 Phyllis Craine

    OK let’s talk ”compliance”  and “enforcement” as it really happens which is basically toothless – we’re not talking about SEC staff doing an audit in person like the IRS or inspecting firms like when the FDA  goes into chicken processing plant.  Firms just fill out a bunch of forms and send them in on line.  there is no such thing as the SEC police and it’s ludicrous that the SEC enforcement officer painted it as such on the show!!  SEC enforcement has ALWAYS been after the trade happens and as such it means nothing.

  • http://twitter.com/RJabby Richard Jablonski

    Since it is oten difficult to obtain adequate evidence to prosecute  traders who violate inside trading rules, why not establish a special income tax category that taxes all traders at a 75% rate or higher?

    • http://profile.yahoo.com/VYDX7HLJI5IH7X2BOER6CA62T4 Angel

      It would be interesting to see how this would affect traders and if it would be feasible for what they do. Without doing any sort of calculation 75% seems too high. Maybe the best solution would be a variable tax rate with brackets in terms of yearly earnings and types of transactions made with the highest possible rate being 50%. 50% in my opinion is about as high as anyone would be willing to pay just think would you be willing to give more than half on anything you do to someone else?

      • Don_B1

        There was a study on the effects of marginal rates that may be linked here:

        http://www.nytimes.com/2012/03/18/business/marginal-tax-rates-and-wishful-thinking-economic-view.html?_r=0

        or is one of the studies by Pickety and Saez, who have done yeoman work in this field.

        The bottom line is that a top marginal rate below 70% does NOT destroy the incentive for work, though it certainly provides incentives to look for loopholes and makes some (speculative?) investments less likely. But high-paying work is still worthwhile (though lower-paying work is less worthwhile).

  • http://profile.yahoo.com/VYDX7HLJI5IH7X2BOER6CA62T4 Angel

    Theres just one kind of corruption that the us government does not seem to follow up on that is corruption of the government itself. The elites who run the government (and have done so for the entirety of this countries life) only end up getting in trouble because when they step out of the lines, which their colleagues create they are forced out of the ranks by exposing them to the hounds (middle class and lower) who are fed scraps so that they may continue to be the work force for the “greatest economy” of the world. So that they may feel as though they are receiving justice and maintain what for the longest time has been the greatest form of control “freedom”.

  • MadMarkTheCodeWarrior

    High frequency trading should be illegal, it serves absolutely no financial purpose other than to suck money from the average investor. Its like a bunch of ticks are slowly sucking blood from their victims.

  • DrewInGeorgia

    Caller Vic: What a maroon.

    • BHA_in_Vermont

       And a greedy one at that. Why work when you can cheat your way through life, eh?

      • Steve__T

         Cheat your way through life, getting rich using somebody else s money.

    • http://profile.yahoo.com/JXSANCUDPIKQSPID5KT2U4XK5Y TF

      I would like to invest my money with the guy providing tips to people like Vic. Further up the pyramid is always better.

      And, as a side note, can we totally dismiss the fantasy of how the E-Trade Baby is supposed to level the playing field between ordinary folk like us and these people we’re talking about this hour?

  • J__o__h__n

    I could make more money breaking into homes.  Restraining me from doing that is hindering a job creator. 

  • Ellen Dibble

    The caller who favors big windfalls by jumping for the tip — should this be the norm for American “growth”?  Paper growth?  Greed for paper profits?  It’s so different for a growing economy with better infrastructure, safer regulatory procedures, and better business environment?  I just think that “job creation” is different from “growth,” and a generative economy.  A human being sitting there and twiddling their thumbs is a more obvious aberration than a pile of profits that signify someone made a good bet (maybe about the failure of Greece?).

  • BHA_in_Vermont

    Hi frequency trading is immoral. If you have a few million dollars to spend (big traders), a tenth of a cent in a stock price is real money. Buy now, sell in 10 minutes, make a profit.

    Stocks are supposed to be a way for companies to finance their operations. Buy the ones you believe will do well and hold them.

    My tax plan: Profits on the sale of stock held less than a day are taxed at 200% and losses are not deductible. Less than a week, 150%, less than a month 125%. Then we can get to tax rates on stock held as they should be … as investments.

    • Don_B1

      Just a small per share transaction tax will largely do the trick.

  • Davesix6

    This may be slightly off topic but it’s intersting that Congress makes laws against “insider trading” yet until recently Congress itself was exempted from those laws.

    And both sides of the isle benifited not the least of which was Nancy Pelosi herself.

    I believe that there should be a law that Congress must be subject itself to any laws they pass over us!

    • Don_B1

      That might have to go into the Constitution.

  • http://www.facebook.com/brian.mcneal.129 Brian McNeal

    For the caller Vic, that’s just ridiculous.  You’re saying that the ends justify the means and as long as people can make money at it, it should be legal.  This activity damages the marketplace that it takes place in and hurts honest investors.  Some people probably dream about getting a tip on a fixed horse race or boxing match that they can bet on also, but that doesn’t make it ok to fix sports.  And you know what else is a good investment?  Narcotics.  You can spend 10K and turn it into 30K by selling on the streets.  Doesn’t mean it should be allowed.

  • hennorama

    Wall Street bankers, traders, financiers, et al have only one goal in mind – to make money for themselves.  The book “Where Are The Customers’ Yachts?” first published in 1940, comes to mind.  Greed is not only good, it is expected and assumed, and hugely rewarded.  Risk, ethics and laws are mere inconviences to be ignored or laughed at, until someone gets burned by risky deals, publicly embarrassed due to ethical lapses, or caught breaking the law.  Then of course, influence is applied to reduce penalties, change the law, and figure out ways to tie the hands of regulators.

    Public acknowledgements of such inconveniences as SEC or Congressional investigations, Federal, state or local indictments, or scandals exposed by the Fourth Estate amount to non-denial denials (“mistakes were made,” etc.), mealymouthed apologies (“we are profundly sorry”), payments of fines that become “costs of doing business”, promises to never do it again, and a cynical return to business as usual.

    Wherever there is a financial market, there will be someone looking to rig it.  Wherever there are rules and laws, there will someone looking to bend or break them.  This is nothing new.  We tolerate this misbehavior due only to the ancillary perceived benefits – the financing of startup companies, the investment opportunities afforded to “the little guy,” etc.

    This is not by any means meant to indicate that everyone involved in financial markets acts unethically, illegally or solely in their own interests.  But the culture of greed promotes and rewards those who make the most money, and winks at any questionable methods used to generate those profits.

    These vast profits generated by these firms and individuals allows them to purchase influence, and guarantees that true reform will not occur.  Any reforms in place will be relentlessly attacked, watered down and eroded behind the scenes by lobbyists, and modified or repealed by future legistative actions of politicians purchased by “The Street.”

    And so on and so on.  Twas ever thus.

  • Michiganjf

    All these channels, like AMC, which airs Breaking Bad, Mad Men, and The Walking Dead, depend on revenues from cable companies (cable subscribers) to produce the fine fare which people consume…

    … who will pay for all these great programs when the main revenue stream dries up??

    • Michiganjf

      Oops, wrong page!

  • OnPointComments

    I bet if this program had been aired five years ago, we would have had a plethora of comments about the President and the Attorney General being bought by Wall Street, their associations with Wall Street bigwigs, and insufficient investigations and prosecutions by the Attorney General.  But today not a peep about this.  The Government Accountability Institute reported that despite Attorney General Eric Holder’s heated rhetoric promising to hold Wall Street accountable, the DOJ has not filed a single criminal charge against any top executive of an elite financial institution.  Compare that with his predecessors Bush and Clinton:  Bush – 1,300 convictions; Clinton – 1,000 convictions; Obama – Zero attempts

    • Flytrap

       You are dangerously close to criticizing Obama and holding him to the same standards as Bush.  As we all know, that’s racist.  

    • Gregg Smith

      So true. Nobody will touch this comment either.

    • Mike_Card

      “Not a peep?”  Have you read ANY of the other comments?

      • OnPointComments

        Perhaps you’ll point out the comments that leveled any criticism of President Obama or Attorney General Holder.

        • Mike_Card

          I’ll take that for a no.

          • OnPointComments

            I’ll give you a hint — there aren’t any comments that criticize President Obama or Eric Holder.

          • Mike_Card

            So, you haven’t read any of the others.

          • OnPointComments

            I’ve read all of them.  Neither President Obama nor Attorney General Holder are mentioned.

    • jimino

      I am no defender of Obama but I am interested in the truth and this, like everything else connected to Breitbart and his legacy, is carefully and confusingly worded propaganda.  You can learn more about what has really been done during the Obama administration at: http://www.stopfraud.gov/index.html and judge for yourself.

      And while we’re on the subject, can anyone identify by name any “top executive of an elite financial institution” that was prosecuted under the Bush administration?  If I understand the post, there are 1300 of them so it shouldn’t be too difficult.

      • OnPointComments

        You could always call Jon Corzine, the smartest guy Joe Biden knows, who wasn’t prosecuted for what went on at MF Global.  I understand that Corzine has the list of prosecutions.

        • jimino

          So you concede that the substance of what you wrote is not true and the “AGI” is not to be trusted as a source.

        • Don_B1

          As far as I know, he has not been “exonerated” yet. These prosecutions are not easy and sometimes (many times) need prosecution at lower levels first.

      • TomK_in_Boston

        Harry Markopolis tried to hand Madoff to the bush SEC and they weren’t interested. He explained everything about Madoff’s scam and they wouldn’t even look. It was all part of the “regulation is bad” approach. You don’t need legislation to deregulate. All you have to do is appoint agency heads who don’t believe in their mission.

        I’m no big fan of Obama either. I’m a liberal and by the traditional America I grew up in he’s a moderate republican. No surprise he’s tight with wall st. OTOH, I was terrified by the prospect of a hostile takeover of the USA by Bane capital.

        • Vigilarus

          You mean that he _thought_ that he was tight with Wall St, but they felt that he said things which failed to recognize their inherent awesomeness so they backed Romney all the way. Who knows if he’ll stop kissing their a$$ets in the 2nd term, but at least Elizabeth Warren is on the Senate banking committee.

          • TomK_in_Boston

            Right. He’s in bed with wall st but his remarks for public consumption by the base hurt their feelings. Poor con men.

            YAY for Elizabeth Warren on banking committee. Best result of the election, and as a bonus we’re free of the nasty Ken doll.

      • Gregg Smith

        Bernie Madoff.

        • Ray in VT

          I think that you lose that one on a bit of a technicality, Gregg.  He was arrested on December 11, 2008, but it doesn’t look like he was actually charged until March 10, 2009.

          http://www.nytimes.com/interactive/2009/06/29/business/madoff-timeline.html

          • Gregg Smith

            Dang those technicalities… but the fact remains.

            What is the working definition of “prosecuted” and why is that the relevant word? IMHO OPC’s comment trumps all: “Obama – Zero attempts”.

          • jimino

            “Obama – Zero attempts”.

            If you actually believe that is true because of what some anonymous comment quoting the Breitbart-base AGI, you are even more gullibly susceptible to right-wing propaganda than I thought.  Especially when the very example you cite was during the Obama administration. 

          • Gregg Smith

            Well, it could be false but OPC was not the first person to say it. I have heard it and read it a lot. I guess I should check but I don’t know of any.

            Yes, Obama was elected on Nov. 4 and thirty days later he arrested Madoff. That’s quick work, no need to wait for inauguration. All praises to Obama.

      • LogicalChemist

         The Stop Fraud website is loaded with really penny ante cases- 6 million in fraud by an accountant, 51 million,  the biggest recent one is the UBS affair, which recovered 1 billion in penalties.

        Meanwhile, losses in the TARP program appear to be running north of 200 billion dollars- GM, AIG, 140 billion or so for Freddie and Fannie alone. 

        This says nothing about the losses incurred by companies, shareholders, bondholders, and others in the sham bankruptcy/sale of the old GM to the “new” GM.  The Bush admin. gave the old GM 17+ billion in loans.  The Obama admin. added another 60 billion and used the section 363 sale of assets to take billions from the shareholders, bondholders and creditors, funnelling some to the auto unions and the pension funds.  Ford, Honda, Hyundai, Toyota, and the other manufacturers lost 100′s of billions in competitive advantages from lost sales, propped up by the government, rebates on GM cars, and other benefits that should have gone to companies that were competitively more adept than GM.  The total losses are around $1 trillion for everybody but some folks at GM.

        The fraud isn’t only on Wall Street.

    • Vigilarus

      Thre are plenty of people on the left who are critical of Obama and Holder’s placation of Wall St- Matt Taibbi, Chris Hedges, Neil Barofsky, Yves Smith, Simon Johnson, the Occupy movement, and probably the host of this show, among others. Yet the Republican base thinks that Obama is a socialist…

  • jefe68

    This points to ever more evidence that game is rigged for those on the top. It’s not about fair play, the Stock Market never was, this kind of insider trading is as old as the market. However, it’s now clear that pension funds and IRA’s dependent on the market.
    That said all this talk of regulation seems to be just that, talk.
    Congress makes the laws regarding this sector and they are in bed with these rubes.  It never ends, I just read the other day that Google has used a loophole to avoid paying 80% of it’s taxes which was stated to be 2 billion dollars. That’s right, 2 Billion…

    The system is rigged and shows like this are all well and good but unless you’re in the top 1% you are helpless against any of this high level financial crap that is undermining the very structure of our nation.

  • 2Gary2

    and this surprises anyone?? wall street being criminal??  really?

  • Kenneth Rubenstein

    He’ll probably spend a few years in a comfy white collar prison and then return to his luxurious bubble. Real prison is for hardened criminals like small-time marijuana dealers.

  • hennorama

    One point that has not been made is that, in their pursuit of ever-higher profits and evermore complex methods of making money  (high-frequency trading, derivatives, etc.), Wall Street siphons off the best and brightest minds from a variety of non-financial fields.

    The biggest recruiters at many elite educational institutions are financial industry firms engaged in a wider-ranging pursuit of brainpower.  Computer scientists, meteorologists, doctors, engineers, physicists, etc. are lured by the disproportionately large compensation available, even right out of college.  What happens as a result?  Do we get simpler and easier to understand financial instruments?  Hardly.  The vastly more complex newly designed financial instruments and techniques are not widely understood by those using them, and since they are new, no one has any experience with predicting or dealing with potential problems.

    There is also no link to the downside for those who design these new instruments and techniques.  In the same way that gun manufacturers are not held liable for firearms crimes, (“guns don’t kill people – people do”), the designers are not held to account when their creations crash and burn, sometimes taking the global economy with them.  The firm they work for may implode, or may be bailed out by the government, but either way the designer can simply shrug, walk away with their salary and bonuses, and “pursue other interests.”

    Removal of this collective knowledge, skill and human capital from what most consider to be more productive pursuits has a cost to society at large.  Entrepreneurship suffers.  Academia treads water.  Non-financial economic sectors must make do with lesser minds, and/or expand their search for talent worldwide.

    We see other effects.  As parents and students see the path to financial wealth running through elite colleges and universities  to the financial industry, they strive more and more to get into these select schools.  Corners are cut, academic cheating increases, “study drugs” are abused, more student loan debt is taken on, stress levels increase, all in the pursuit of “success.”  Cheating and unethical behavior is seen as OK, so long as the desired result is attained.  The ends justify the means.

    Wall Street measures success only in terms of money.  My pile is bigger than yours, so I’m smarter and better than you, and by extension, I’m more valuable and more indispensible to society.  This attitude becomes pervasive throughout society, as we hear things like “let the market decide,” “by any means necessary,” “greed is good,” “the ends justify the means,” etc.

    What happens next?  Privatized profits and socialized losses.  An unending cycle of boom > bubble > bust > bailout > recession  > recovery > repeat.

  • http://www.facebook.com/profile.php?id=1684607342 Robbin Finnerty

    So the head of enforcement just said we want to convey “the appearance” of a level playing field?  Seems a very low goal and does not make ME want to invest.  

    • Don_B1

      The “appearance” is a necessary but not sufficient condition, certainly.

      But there are conservative justices on the Supreme Court who wave it off as unnecessary.

  • TomK_in_Boston

    The bloated financial sector is one of our biggest problems. In the 00s it averaged an absurd 41% of corporate profits in the USA. The transfer of wealth from the real economy to the casino coincides with the transfer of wealth from the middle class to the top. And of course, the financial con artists caused the Bush crash whose hangover is still dragging down our economy.

    It was the ultimate chutzpah for the GoP to run a financial con man for president based on the argument that he could fix an economy wrecked by financial con men. Romney is a poster child for the problem. This overpriviliged, pampered child has not done an honest days work in his life. All he does is manipulate numbers…and he is far richer than most people who actually make a product.

    I’m for anything that reins in the financial con men. We did that after they caused the 1929 crash, it’s a disaster that we’re failing to do it now.

    A financial transactions tax is one of the best ideas out there. We do NOT need computers trading thousands of times a second. A small transactions tax would damp this nonsense down and raise revenue while having no impact on a normal investor.

  • Mike_Card

    OK, OnPointComments, here it is:  President Obama and AG Holder are poopy-heads and are entirely personally to blame for everything bad that has happened in the past 3 years and 11 months.

    GW Bush and Dick Cheney were pure as the driven snow and nobody whoever said as much as one bad word about either of them ought to be encased in cement and thrown off a ship steaming through the Indian Ocean.

    Does that satisfy you?

    • Gregg Smith

      Now you’re getting it!

    • TomK_in_Boston

      Exactly! Clearin’ brush in crawford while the terrorist alarm bells were going off in the summer of 2001 was actually a valiant effort to defend the USA. 

  • http://profiles.google.com/hdkellogg Howard Kellogg

    How about a law (from now on) that requires ”claw-backs” provisions for bonuses (or even a portion of salary) in the event of wrongdoing. This would help mitigate the culture of excessive risk taking that has infected Wall st by forcing everyone to have a longer term view. 

  • john__riley

    The dessication of the middle class distends the fiber of our country.  I suspect that it my have something to do with the 1 ) spurious efficacy of “wealth creators” 2 ) corporate welfare, by which I mean the perks that exist for corporations which do not exist for other people (individuals).

  • Tyranipocrit

    these people have no empathy, no soul.  wall street is the crime. Why do applaud a system that has murdered or condemned to death more millions than stlalin or hitler or mao could ever dream of?

  • ranndino

    Reality check. Anyone who thinks that a guy like Steven A. Cohen is able to consistently provide returns on investments that hover around 30% by having a “rainman ability to read the ticker” and doing copious amounts of research can buy a flying car from me tomorrow. 

    It is obvious to any rational thinking person that knows even a little bit about the market that all of the hedge funds are crooked operations completely based on sophisticated insider trading networks of informers, just like the one Raj was running. These are modern day white collar criminals who are far more intelligent than the Al Capones of yesteryear so they figured out much better ways to game the system. Yes, sometimes they get caught, but it’s all about risk assessment. The SEC is simply not capable of looking after them and the incredible returns justify the risk of getting caught, which is extremely low.

    The whole idea that anyone in this industry has a moral compass is as naive as believing that Steven A. Cohen has some special god given talent that let’s him do the impossible over and over again. Heck, I have a pretty strong moral compass, much stronger than that of most people, but if I were faced with the decision on whether to pull a trigger on a trade that would earn me a $10 million bonus knowing that the chances of me getting caught were very remote I would do it in a heartbeat. Anyone who claims otherwise is also not at peace with reality.

  • Michele

    I remember watching a 60 Minutes piece many years ago that focused on people who served jail sentences of 30 years or more for stealing bread and other petty crimes.  I can guarantee you that none of those people attended Wharton.

    • Vigilarus

      According to the neo-predestinarians, aka the GOP, the poor are thus because it is a reflection of their inherent lack of virtue, and wealth is a sign of God’s grace and favor.

      Of course, large wealth is now more often than not a sign of corruption, ruthlessness, and entitlement.

  • http://www.facebook.com/kyle.rose Kyle Rose

    The biggest market manipulators of all are governments, along with their agents in the central banks. If I have no confidence in the markets today, it’s not primarily because someone might make a killing on some biotech stock based on some insider information: it’s because the central banks at the behest of politicians have manipulated interest rates, commodity prices, currencies, and even equities to the point that there’s no real price discovery in the market anymore, making it impossible to tell whether most things are under- or over-valued.

  • http://hammernews.com/ hammermann

    How idiotic that they go after insider trading. All of Wall St. runs by insider trading- glaringly obvious since I played market before and after the Internet Bubble. It’s human nature and impossible to resist -information is power and if you are high up, you get alot of info. I really don’t have that much a problem with it (why are all Senators millionaires within 1 term?), but the swine that pumped the mortgage loan bonds were straight criminals, fraudsters dumping garbage on their own brethren. The top banksters should be frog-marched to prison for 10 years or so for almost breaking the world. Course they are now as protected as any Mob that pays protection- they are under the wing of the Gov- a trillion of dollars of TARP bailout, 7.7 tril of secret Fed loans for their junk mortgage crap (kept on their books at 100% instead of $0 – they are all really bankrupt), free money w 0% interest ($400 bil subsidy/yr) so they can pay $50 mil bonuses to their executives as they foreclose on millions of homeowners and don’t lend to desperate businesses. Where are the stockholders and victims with cajones, since after 4 years the gov has just started to inconvenience these pigs?

ONPOINT
TODAY
Apr 16, 2014
A woman walks past a CVS store window in Foxborough, Mass., Tuesday, Feb. 7, 2012. The nation’s major drugstore chains are opening more in-store clinics in response to the massive U.S. health care overhaul, which is expected to add about 25 million newly insured people who will need medical care and prescriptions, as well as offering more services as a way to boost revenue in the face of competition from stores like Safeway and Wal-Mart. (AP)

Retailers from Walgreens to Wal-Mart to CVS are looking to turn into health care outlets. It’s convenient. Is it good medicine?

Apr 16, 2014
Harvard Business School is one of the top-ranked MBA programs in the country. Our guest today suggests those kinds of degrees aren't necessary for business success. (HBS / Facebook)

Humorist and longtime Fortune columnist Stanley Bing says, “forget the MBA.” He’s got the low-down on what you really need to master in business.

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Apr 15, 2014
In this file photo, author and journalist Matt Taibbi speaks to a crowd of Occupy Wall Street protestors after a march on the offices of pharmaceutical giant Pfizer, Wednesday, Feb. 29, 2012, in New York. There was a heavy police presence around the 42nd Street area as the demonstration began Wednesday morning outside. (AP)

Muckraking journalist Matt Taibbi sees a huge and growing divide in the US justice system, where big money buys innocence and poverty means guilt. He joins us.

 
Apr 15, 2014
A crowd gathers at the finish line of the Boston Marathon in Boston for a Sports Illustrated photo shoot before the one-year anniversary of the Boston Marathon bombings, Saturday, April 12, 2014. (AP)

One year after the Boston Marathon bombing, we look at national and local security on the terrorism front now, and what we’ve learned.

On Point Blog
On Point Blog
How Boston Is Getting Ready For the 2014 Boston Marathon
Tuesday, Apr 15, 2014

Boston Globe metro reporter Maria Cramer explains how the 2014 Boston Marathon will be different than races in the past.

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WBUR’s David Boeri: ‘There’s Still Much We Don’t Know’
Tuesday, Apr 15, 2014

WBUR’s senior reporter David Boeri details the ongoing investigation into the alleged Boston Marathon Bombing perpetrators.

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Remembering The Boston Marathon Bombing, One Year Later
Tuesday, Apr 15, 2014

One year after the Boston Marathon Bombing, we look back at our own coverage of the attacks and the community’s response from April 2013.

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