Think you could make it in business with a trillion dollar subsidy? That’s a very conservative estimate of what the banks can borrow each year at almost no cost, courtesy of Fed easing. Returning the favor, the banks plow most of the funny money into Treasury paper, stocks and bonds, then lend the crumbs that remain to the riff-raff at usurious rates that can exceed 20% — a tad more than Frankie the Camel charges his customers. What a great way to make money! And yet, how do we account for this recent headline in The Wall Street Journal: Bank Profits Are Looking Stressed – Slumps in Trading Revenue, Mortgage Business Are Expected to Weaken Quarterly Earnings Reports. Can this be right? Actually it’s even worse than it sounds, since, on the trading side of their shady business, banks have something going for them that’s even better than subsidies – i.e., the ability to control securities markets like a Big Six wheel on the carnival midway.
No One Is Fooled
Speaking as a former floor trader, I can attest that institutional trading desks seldom execute an order unless it affords them a fool-proof opportunity to front-run their own customers, and, as part of the process, to steal a little extra from each and every other party to the transaction. High frequency trading is just one of the ways they do this, scooping up shares nanoseconds ahead of you or I in order to sell them to us for a small fraction of a penny more than they paid. Michael Lewis is out with a book called Flash Boys that explains this in detail. Caught in flagrante delicto, Wall Street’s reaction is to deny everything. In this they have been abetted by the usual morons and shills in the financial press, who have dutifully parroted Wall Street’s talking point about how high frequency trading “adds liquidity” to the markets. Yeah, sure. If any of you editorial-room imbeciles or HFT apologists are reading this: No one is fooled! It takes real chutzpah for you to claim that high frequency trading “enhances” liquidity when it actually accounts for most of the daily volume on U.S. stock exchanges.
Meanwhile, with all the “stress” the banks supposedly have been feeling, it’s evidently not so serious that their top executives have taken a hit. Goldman CEO Lloyd Blankfein, for one, just got a raise to $23 million, so we’re not likely to bump into him at Walmart. For most Americans, however, the Great Recession never ended. Their debt problems might be seen as the banks’ great good fortune, but only if you believe the banksters will ultimately get to collect what is owed them. Since you can’t get blood from a stone, it may be the banksters who lose in the end.
Lending a hand to despicable V by helping to finish wallpapering the forum:
“When you see that trading is done, not by consent, but by compulsion — when you see that in order to produce, you need to obtain permission from men who produce nothing — when you see money flowing to those who deal, not in goods, but in favors — when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you — when you see corruption being rewarded and honesty becoming a self-sacrifice — you may know that your society is doomed.” Ayn Rand
Finally for el garo, denier of the fact that the networks are nothing but statists propaganda outlets:
http://www.truthrevolt.org/news/sharyl-attkisson-when-id-begin-getting-under-surface-obama-scandal-cbs-would-pull-me