Wall Street Finally Making money again

As indicated in the last post ... I was browsing through the AM bands and came across Bloomberg radio who were reporting that after 5 years, and $12B in fines, Wall Street firms are finally showing a profit again.

I think there are two interesting points to this, one public and one very personal.

The first is the elephant in the living room ... these $12B in fines are a result of the massive fraud and corruption perpetrated against hard working Americans during the Clinton years. Clinton kool-aid drinkers will never stop talking about how great the economy was under der Schlickmeister ... but these $12B in fines are the proof of half of my theory on the economy of the 90s ... basically that a lot of what was going on was a house of cards built by Wall Street brokers. People were paying obscene amounts of money for paper, and brokers were (criminally) hyping the value of that paper. It turned out to be the world's biggest ponzi scheme ... and not only did Clinton's Justice Dept and SEC ignore it (ignoring Fed Chief Greenspans' alerts), but key players in his administration were pocketing millions in the various scams that were going on.

To add insult to injury, consider the fact that we (people who had investments) all got screwed, and yet once again the government is the beneficiary.

On the personal side ... I called the whole thing way back in 2000. For those of you that were not around back then ... there was a massive email swap going on (what ended up being the predecessor to this blog), and I laid out the case that the stock market would collapse (with a caveat), there would be a significant recession, etc. In fact, I finished with the statement that I could not understand why anybody would want to inherit the mess that Clinton's disasterous presidency would leave behind, particularly a Republican who would get all of the blame.

This turned out to be exactly what happened. What has been amazing is that GW Bush has managed to salvage the economy despite the monstrous additional problems that came up (9-11, hurricanes, never-ending run of natural disasters, etc.), and things are roaring now. This speaks to the amazing job that GW has done in his terms : given the dire situation the country was in at the end of Clinton on virtually every front, it would have been WAY too starry-eyed to predict back then that anybody could pick up the pieces left behind. If you want to scare the heck out of yourself ... could you imagine how bad off we would be right now if Gore had been successful in the Florida 'overthrow'?

Regarding the caveat to the market crash ... the one buffer I believe is built into the system now is the retirement accounts ... there are millions of dollars that buy up stocks every single week automatically, so any major problems in the market will be buffered as a result.

Have we learned any lessons?

Let us hope and pray that we have learned our lessons. Let us hope that we never elect another totally morally bankrupt disaster like Clinton, or his wife!

Unfortunately, we may do so precisely because (it seems that) only people like myself are pointing out the obvious (that the massive corruption and fraud CAUSED much of the boom), have you seen one article talking about it? Don't hold your breath.

No big deal ... the Republicans should be front and center pointing out this stuff, right?

Hello? anybody out there?