Wall Street shenanigans

Verdict Is In: “The Banking Lobby Is Simply Too Strong To Allow It To Happen”

“A culture of dangerous greed and excessive risk-taking has taken root in the banking world,” said Senator McCain last week. Senator Warren told Wall Street, where failure has been rewarded with bailouts and record bonuses, that “Banking should be boring.” They were pitching the “21st Century Glass-Steagall Act.” Wall Street must have gotten the willies.

What Gloomy CEOs See That Giddy Retail Investors Don’t

CEOs have, in these crazy days of ours, one primary job, it seems: manipulating up the stock of their company. Few master this delicate art like Tesla Motors CEO Elon Musk, who took his highflyer into the stratosphere on a wing and a prayer. But why are executives worldwide wallowing behind the scenes in 2009-like gloom about the economy’s future?

Mother Of All Bubbles Pops, Mess Ensues

The asset bubbles the Fed’s money-printing and bond-buying binge has created are spectacular, the risk-taking on Wall Street with other people’s money a sight to behold. Big winners were mortgage Real Estate Investment Trusts – and those who got fat on extracting fees. But now the pendulum is swinging back, and the bloodletting has started.

David Stockman: Bubble Finance Personified

“The Fed should have been embarrassed by the M&A frenzy,” writes David Stockman. Tyco CEO Dennis Kozlowski, Wall Street’s favorite deal maker, put “the rest of the corporate deal junkies to shame.” But “the poster boy for Greenspan’s first stock market bubble and its sudden, violent demise was a wake-up call that was wholly ignored.”

David Stockman: The Greenspan Put And The Deformation Of M&A

“The Wall Street coddling monetary régime” that Greenspan institutionalized “deeply transformed M&A,” writes David Stockman. It turned a corporate business strategy into “an all-encompassing mechanism for speculative finance” that executives used to build “empires with apparent, if unsustainable, earnings growth” that ended in “spectacular crash landings.”

Goldman Sachs To The Fed: Taper But Don’t Tighten

Tapering bond purchases gets real. New York Fed President William Dudley has spoken. He represents Goldman, where he was a managing director. Goldman owns part of the NY Fed and is one of its 21 “primary dealers.” But it doesn’t want the financial system to blow up. On the theory that you can milk a cow many times, but you can bleed it only once.

David Stockman: How The Fed Got Cramer’d

“All of the checks and balances which ordinarily discipline the free market in money instruments and capital securities were being eviscerated by the Fed’s actions,” wrote David Stockman. “This kind of central bank action has pernicious consequences, however.”

Retail Investor Nightmare: The Bond Fund Rout

The bond selloff didn’t surprise anyone. Gurus of all stripes had predicted for years that it would happen, that the ridiculously low yields the Fed was imposing weren’t sustainable – only to watch as the Fed opened the spigot even wider. Then the smart money offered a tidbit of immortal wisdom to the  euphoric bondholders: “run – do not walk!” And they did.