How Wall Street Ate the Economy

This is the Cover story at Business Week this July end – one year after Bear Sterns shot itself and the US Economy in the foot, being the first of many Hedge Funds and Investment banks, to gag on its own Derivative Mortgage Greed. Now I don’t want to say that I told you so in Greedy Guts US terms – but Business Week describes in even more detail how greed, leverage, greed, Complex Ponzy derivatives, greed, compliant financial instrument ratings firms (don’t think, rather indict, Moodys, S&P, Fitch, etc.), greed, Fed Moral Hazard money, and even more greed have left Business Week saying:
“One thing is for sure: The new normal won’t be a fun as the recent past. Banks will be smaller and fewer. Capital will be harder to get for some consumers and companies. And more of that capital will be parcelled out by lightly regulated hedge funds and private equity firms, for better or worse, as the balance of power on Wall Street shifts

Yikes! – out of the fire and into the dark, shadow world of hedge funds and private quity financing. This is like giving US investment power to the Dark Lords of Mordor. Even the Economist has had second thoughts on the Shadow world of Hedge Funds and Private Equity. But in the waning days of a Federal Administration that is working triple overtime to permanently secure “trickle down” tax braks for the wealthiest Americans most of which are not investing in the US or the new Energy Smart economy but are working triple overtime to procure more “sure thing pounds of financing flesh” (see recent buy out of Trans Alberta Utilitiesfor the latest example) – don’t expect any enlightened control or regulation from Washington.

No its Free Rein at least for 7-8 months as the Still-President lets the most discrete highest bidders settle their Wall Street Wrangle for Power. And so the Sharks of Wall Street Hedge Funders and Private Equity firms are working triple overtime to secure their positions as scott free on the Mortgage Meltdown and the new primetime Lenders of Last Resorts – “the Banks are down a $Trillion or so, so see what We can do for you out of the ‘prying eyes’ of financial regulator”. Give me Venture Capital out on the West Coast over these band of thieves any day.
So until the Still-President is replaced, there is scant hope that the US Capital machinery will right itself out of the “business” of gutting low debt equity ratio firms repackaged as “financial vehicles” and into the truly risky business of transitioning the US economy into a smaller ecological footprint(The US cannot continue to consume 1/4 of the world’s resources given it has only 1/20th of the population) and energy savvy(the World cannot continue on its environmental disaster course). But even with a McCain or Obama presidency – there is no guarantee that the US will not punt its Financial Rainmaking Power into more capable hands. All the results of replacing “Fiduciary Trust” with “Unbridled Greed is the new Might makes Right”.

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