Wall St Collapses

As you can well imagine I am dancing on the graves of Merrill Lynch and Lehman Brothers. For years I have written about the greed and avarice of big business and the antics of Wall Street. I enjoyed claiming that the N.Y. Mercantile Exchange and Wall Street traders were simply cowboys. Yesterday, I almost “threw up” when I heard N.Y. Mayor Bloomberg telling his audience he is so saddened to see so many of “our” smart, young, talented, highly qualified people losing their jobs. Sure he was sad; not only is he heavily invested in Wall Street, but as mayor he loved those thousands of highly compensated dirtbags spending their $millions in annual earnings in the most highly taxed municipality in the world, Manhattan. Knowing these cowboys were also highly leveraged trying to turn their $millions into tens of $millions, I am sure over the next few months there will be a flood of forced mortgagee sale Hamptons mansions and no doubt all those gleaming red, yellow and black Ferraris and Lamborghini’s will be back on dealers’ lots at fire sale prices.

Wall Street is singularly responsible for incentifying and encouraging American companies to shut up all but administration operations at home and export the jobs overseas. The most glaring example is Wal-Mart. When I first arrived here twenty years ago, in store banners proudly told the shopper all merchandise was “Made in USA”. Today, the opposite is the case. Oh yes, fifteen years ago Wall Street told us America was going to be better off becoming a “service” orientated country and let Wall Street extend its tentacles over the world through Globalization to make the real money. I want to see these now worthless “Wall Streeters” applying for a hotel bell hop’s job at $7.50 per hour plus tips and see how they will get on. In L.A. we are used to seeing budding actors as waiters. Many an actor knows what it is like starting at the bottom. Won’t it be fantastic tipping an ex millionaire twenty-five-year-old trader a buck for parking your car or telling an ex Lehman executive, now a waiter, “Hey you, take the meal back, it is too cold?”

My belief has always been that a country’s wealth can be measured by its industrial strength. Turning raw materials into finished goods adds real value. Bundling up sub-prime mortgages into bonds then adding a 100% markup, in the end to hock them off to unsuspecting 401K plan holders is simply criminal. To me that was what Wall Street became; a bunch of thugs inventing and creating financial instruments to line their pockets and when it all failed, simply look to Uncle Sam to bail them out. Turning iron ore into steel and building a Caterpillar earth mover is the only way true way wealth can be created. Remember back ten years ago when Wall Street divided American business into two; naming them the “old economy” companies and “new economy” companies. They scoffed at the Proctor and Gambles (old economy) but idolized every start up Internet venture. In two short years the NASDAQ index climbed past 5000 only to land on its head in 1999 and settle back at 1700. Today that index sits at not much more while the venerable and responsible corporations have produced real profits year on year since then and anyone who invested in them are sitting very pretty right now. If only we had followed Germany. Today by dollar value, Germany is the largest exporting nation in the world. Yes, as best it could it kept its industry intact and of all the worlds’ stock markets hit by the demise of Wall Street’s investment banks, Germany’s stock market is the least affected. Through 2008, Shanghai is down 67%, Moscow (its market has been closed for the last two days) is more than 50% down as is India. So much for Asia being the new back bone of the world!

This morning I could not believe what I read that the three top idiots at Merrill Lynch would receive golden parachutes to the tune of hundreds of $millions as the Bank of America moves in to take charge of its latest acquisition. Until nonsense like this is totally eradicated, we will continue to founder and government will have to further intervene to correct bad behavior of all publicly traded companies. Yes, our only solution to the continuing Wall Street woes is regulation and plenty of it followed up with major policing. Maybe we could hand over a few of those TSA airport “policemen” as guardians of commerce. They are well trained for terrorism and with that mindset they would be perfect for Wall Street!

Tags: 401k, Asia, bail out, Bank of America, Bloomberg, Caterpillar, Germany, globalization, India, Lehman Brothers, Merrill Lynch, Moscow, NASDAQ, NY Mecrcantile Exchange, Proctor and Gamble, Shanghai, TSA, United States, Wal-Mart, Wall Street