Wednesday, December 7, 2011

Why we need tight regulation of our financial markets

I initially posted this on my financial and trading blog, back in April 2009. Re-reading it this evening, I am simply SHOCKED that Republicans like Richard Burr even attempt to make an argument that we must roll back Dodd-Frank regulations over the financial industry. My take after re-reading this post ... SCREW RICHARD BURR AND HIS STUPIDITY. WE NEED SIGNIFICANTLY MORE FINANCIAL REGULATION OVER THE WALL STREET CLOWNS:


Michael Osinski was a computer programmer on Wall Street. He wrote software that Investment Banks used in managing their trades of mortgage backed securities. Michael recently wrote a riveting story in New York Magazine. It's a must read.

Two things struck me in thinking about this article. The first was just how interesting it was to follow Michael's career progress as he continued to develop and migrate this software to handle ever increasing levels of complexity for the development and trading in these securities.

The more shocking aspect of the article though had to do with his descriptions of the multi-million dollar traders who controlled this market. Here's an exert from his article that is most shocking:

"The world around me, though, had become bizarre. At the time, I had an odd sensation that mortgage traders felt they had to outdo the loutish behavior in Liar’s Poker. The more money they made, the more juvenile they became. What do you expect from 30-year-old megamillionaires whose overwhelming aspiration was something vaguely called Hugeness? They had wrestling matches on the floor. Food-eating contests. Like little kids, they scrambled to hide the evidence when the head of fixed income paid his rare visits to the floor.

Now that I was spending more time on the floor, I wondered why the men’s room always stank. Then one afternoon at three, when I was in there taking a leak, I discovered the hideous truth. Traders had a contest. Coming in at eight, they never left their desks all day, eating and drinking while working. Then, at three o’clock, they marched into the men’s room and stood at the wall opposite the urinals. Dropping their pants, they bet $100 on who could train his stream the longest on the urinals across the lavatory. As their hydraulic pressure waned, the three traders waddled, pants at their ankles, across the floor, desperately trying to keep their pee on target. This is what $2 million of bonus can do to grown men."

These are the people who Alan Greenspan (Republican Chairman of the Federal Reserve Board) expected to be able to execute a program of self-regulation of our financial markets? These are the people who our representatives and regulators in Washington DC believe always act in a legal, above-board manner?

Who in the hell are we kidding? These people lie, cheat and steal daily in an effort to take your money and make it theirs. These people exist all over Wall Street. Accept the fact that Wall Street is dominated by juvenile crooks. Once you accept the reality of who occupies the trading turrets of Wall Street, it then becomes an easy step into the realm of accepting the need for very tight regulation of our securities markets, and all of its participants.

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