On America's birthday, A Brief Reflection on the Same Old Same Old...
By Brett Sherman; The Sherman Law Firm
How and why do we let them get away with it?
By "them" I mean the world's most powerful financiers. By "it" I mean shrugging their shoulders, playing dumb, and walking away out of the ashes with their personal fortunes secure when, inevitably, the bubbles they create blow up.
Booms, as a rule, are very good for the personal bank accounts of the lords of finance. Bubbles are even better.
Why are bubbles so good for Wall Street aristocrats? Because (a) the longer the good times last, the longer the paydays keep coming, and (b) a bubble is a boom that lasts longer than it should based on an informed and realistic analysis of the underlying economy. (A bubble is, in other words, is a boom that keeps booming beyond the point in time when, rationally, it should be over.)
And so, knowing that bubbles ALWAYS go bust, the titans of Wall Street have -- again and again and again throughout the history of this great nation -- prodded booms into bubbles like ranchers prodding cattle to the slaughter.
From real estate to railroads to stocks (and just about any other item on which human beings can speculate), the controllers of the businesses that control the money have created and seized opportunities to enrich themselves at the expense of others.
We can excuse John and Jane Doe on Main Street if they fail to grasp the nuances of market cycles generally, and of asset bubbles in particular. Not so the syndicate in command of the banking world. After all, it is the job of these people - the Wall Street elites - to manage their companies theough the ups and downs of the market's predictably unpredictable cycles.
Was it the Fifth Dimension that sang that 70's classic "What goes up must come down..."? While (given the time period) they may not have singing about the capital markets, Wall Street's top executives certainly understand that, in finance, what goes up truly does eventually come down.
Still, these people shrug their shoulders and claim to be victims themselves (as an aside, we invite anyone who wishes to take the position that Jimmy Cayne actually lost $1 billion to a debate via the comments section below). And then, when their bank and brokerage statements arrive each month, oh how they must smile.
Wall Street was once in the shadow of the Statue of Liberty. Now Wall Street casts its own shadow, not just over the iconic statue, but from sea to shining sea.
Unlike the 4th of July, the boom-bubble-bust cycle is nothing for most of us to celebrate.
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