Life is good on Wall Street

Do you want to see a headline that'll really piss you off?
I'm not talking about a Trump tweet, but something that actually matters.

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The markets are back to betting on Wall Street over Main Street.
...But does the move need to be a zero-sum game, with Main Street necessarily struggling in proportion to Wall Street celebration?

The answer to that question appears to be "yes".
For proof of that, see the recent "financial reforms" coming out of the White House.

The review calls for weakening many of the law’s central provisions and offers no alternatives. The rollbacks include loosening restrictions on bank traders, easing up on annual stress tests of a bank’s ability to withstand financial shocks, and advising regulators to rethink capital levels that big banks find onerous but that should be higher to make sure banks can absorb losses without bailouts.
The review also calls for changes in the financing and management of the Consumer Financial Protection Bureau that would reduce its independence and effectiveness. The bureau is the only federal agency with the sole purpose of protecting Americans in their dealings with lenders. Since 2011, it has returned $12 billion to millions of people — money that would have enriched lenders through excessive loan fees, predatory mortgages, deceptive student loan terms, discriminatory auto loans and abusive debt collection.
The new proposals will bolster the profitability of banks
, at least in the short run, because riskier products and practices generate higher returns.

Oh goody. Wall Street banks just aren't profitable enough these days.
Because the Obama Administration was Just. Too. Hard. on Wall Street.
Take for instance JP Morgan Chase.

JPMorgan earned $26.5 billion in profit over the past 12 months, the most ever by any major U.S. bank. While trading results reported Friday were worse than analysts’ estimated, second-quarter earnings set a record.

The most ever! JPM's profits alone is roughly equal to the GDP of El Salvador or Estonia.

Now think about that for a moment.
Wall Street banks aren't lending money.
Wall Street banks aren't even doing any trading.
Wall Street banks aren't even hiring anyone.

Thus Wall Street is not providing any beneficial services to the general economy.
But they are making money hand-over-fist for a very select group of sociopaths, at the expense of 90% of the population.
So let's all focus on Trump's tweets about the media.

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42 users have voted.

Comments

Russia, how? It's right to call the banker class and its government employees 'sociopaths' but isn't 'lunatic' a fuller characterization?

Is it just common sense or reading zerohedge that has me thinking 2008 is just as much in our future as it is in our past?

One of the Greek Muse's name means 'foresight.' Did we white phosphorus her during all these wars?

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15 users have voted.
dkmich's picture

The stock market is where rich people make their money. Follow the money works here, too. They will never destroy the goose that laid the golden egg.

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12 users have voted.

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@dkmich
Really rich people make their money in derivatives, which have a notional value orders of magnitude greater than the aggregated GDP of all the countries in the world, private equity and private debt. Ordinary investors have limited ability to invest in these asset classes.

Remember, credit default swaps, one kind of derivative, only pay when the credit instruments default. It is quite possible for the 1% do do very well while the economy in which the rest of us live falls apart. Moreover wealthy people keep enough cash to ride out most market declines. Someone using equities in a 401-K to pay for retirement has to dig deeply into capital. Financial stocks went down and then went back up as soon as the design of the government bailout became clear. But the people who owned the stocks on the way up were not the people who owned them on the way down.

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5 users have voted.
snoopydawg's picture

@FuturePassed was that billionaires bought up foreclosured houses for pennies on the dollar. One person bought thousands of homes and has become a slumlord.
He will not do any maintenance on the homes he rents for drastically high prices. People complain about that and they are kicked out of the houses, often times with their belongings still locked inside.
This is just one other legacy that Obama left us.
The damage he did to this country is going to be felt for decades.
Best president since FDR, my patootie! How the dingbats that wish he was still the president can't see him for who he is is just dumbfounding.
This includes members of my family. They will not listen to a word I say about him.

Another great essay.

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13 users have voted.

A noun, a verb, Russia

Meteor Man's picture

So excessive loan fees, predatory mortgages, deceptive student loan terms, discriminatory auto loans and abusive debt collection are all economic virtues of capitalism.
I can't wait to see how many Democratic votes this great idea gets. Maybe Trump can get Good Old Joe Biden to whip the Democratic vote for him.

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16 users have voted.

Cali Kush: a bowl a day keeps the doctor away.

@Meteor Man
I would posit that fraud, vandalism, and outright theft should add to the GDP as well.

Either way, banks no longer have an actual purpose in the economy, except to purchase our lawmakers and skim off the economic surplus.

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8 users have voted.
Amanda Matthews's picture

the day this picture came out..,.


Jamie Dimon's eye-catching cufflinks

Sanders is a front man for the party that let these guys walk. We have NO champions for the 99%. And the American people are allowing themselves to be gaslights into fighting each other over the scraps they toss us.

Apparently TPTB really do believe those bunkers are going to save them.

EDIT: for a close up of those eye-catching WHITE HOUSE cuff links with the seal of the presidency click here:

https://goo.gl/images/C9pYTG

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10 users have voted.
Song of the lark's picture

@Amanda Matthews the things that money can buy. Or were they a gift from , Clinton, Bush, or Obama. A way of signaling "I'm in the in club" or a symbol reminding plebes " Congress people " that the "hookers and blow" side of the deep state is still in charge.

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7 users have voted.
Song of the lark's picture

Of many a trader for several years. Many of the biggest most experienced hedge fund masters of the Universe gave up and simply returned money to investors and walked away...usually muttering something like "big trouble in little China " coming our way.
Debt at record levels, GDP lowered each quarter, miasma gripping main street. Retail collapse, local and state governments being crushed by externalities like disappearing middle class, , infrastructure decline and high pension costs. Meanwhile Wall Street rolls on ever higher. Are we in the delusional part of the greatest debt bubble in history? Maybe. Remember Zimbabwe hyperinflation. Well the stock market boomed. People thought stocks were a good way to track, to save assets value as a hedge against an ever more worthless currency.
You can track this in socialist shock doctrine Venezuela in real time at this moment.
"This has helped push the price of stocks priced in bolivars much higher as well. The Caracas Stock Exchange’s benchmark IBC Index, which tracks 15 major Venezuelan stocks, is up almost 600 percent over the last 12 months, making it the best-performing in the world in nominal terms. Since 2015, its chart looks like this, a classic “hockey stick.”"

The only trouble with this is when a currency finally becomes absolutely worthless so too the stock market.

There is plenty more to be said about all this including the massive vaporizing of asset values and wolf at the door DEFLATION when the debt bubble pops. But another time.

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11 users have voted.
Arrow's picture

I dump my consumer goods and Wal-Mart stocks (they are losers like the rest of those poor smucks). I know! I buy stock in riot gear companies (batons, shields, APC's, water cannon trucks). Gotta make money after all...so have to gamble on the coming 'unrest'.
Can't fall for the loosing strategy of investing in CAKE...You know...Little Debbie...Tastekake...Hostess Twinkies. Some tried that way in the past...they just wouldn't
bite(get it) on eating it much.

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6 users have voted.

Because capitalism is good at providing things that titillate us, tickle our fancies, satisfy our fickle egos — but that’s about all it’s really good at. - Umair Haque

edg's picture

met for 20 minutes with not just one but TWO Russians!! Ignore the criminals behind the curtain of Wall Street. We must focus all of our attention on Russia.

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7 users have voted.

for as long as possible. And the government (including the Fed) works for them. So, BOHICA for the 99%.

My WAG would be that come the next crash, nobody in the 99% will bother with protests like OWS. They're probably going to go straight to sterner measures.

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8 users have voted.
snoopydawg's picture

The return of liberal class warfare

In recent history ‘emergency’ Federal Reserve policies combined with Barack Obama’s bailouts for Wall Street and austerity for the rest of us constituted the largest wealth grab by connected plutocrats in modern history. And here’s the punchline— because of the U.S.’s (and the ECB’s) privileged position vis-à-vis money creation, there was no need for the austerity. Had Democrats (1) cared and (2) not been equally culpable for the Iraq war they could have pointed out that money is always found (created) for the priorities of empire.

Had the democrats cared, they could have passed single payer when they used reconciliation. Instead they let the republicans water the ACA down just enough to make it useless, then passed it through reconciliation. What public option or single payer? People to this day will say that Obama never promised us that. Just unicorns and ponies. And chess. Never forget that he was playing chess for years.

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9 users have voted.

A noun, a verb, Russia

k9disc's picture

@snoopydawg

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3 users have voted.

“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

Back before the erection, if you wanted to buy a euro, it would cost you roughly $1.15. Immediately after, that cost went down as low as $1.07 (might not seem like much difference, but it is). Why? Currency speculators, who are basically herd animals, constantly racing from one position to another to keep up with the trend, were salivating over the prospect of massive tax cuts for the rich (shifting more of the burden to the working class) coupled with massive infrastructure spending (paid for by working class taxpayers, with corporations raking in the loot), both of which would trigger higher inflation. Currency speculators like this, because if they can shift capital from bonds denominated in low-inflation currencies (think austerity-budget Europe) to bonds denominated in higher-inflation US dollars, they make a profit. Which is also why they've been nagging the Fed to raise interest rates for years now.

These days, exchange rates are about back to where they were before we became blessed with Trumpikins, simply because the prospects of those big transfers of wealth into the pockets of the plutocracy have all but vanished, at least in the short term.

No tears for the speculators, and yes, capitalism STILL stinks.

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4 users have voted.