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Update: October 6, 2011
It is becoming more apparent that the intentions of the protestors are not “noble” as we first wrote. The majority of the mob are run-of-the-mill anarchists who flock to any situation around the world allowing them to cause trouble and feel important or a brief amount of time.
If any impact to Wall Street practices will come of these protests, the few in the crowd who truly care about reducing financial corruption and improving democracy will have to take charge. The Beatles’ George Harrison said it best. When he was leaving his LSD-marijuana “mysticism” phase and visited the Haight-Ashbury protestors of the 60’s, he said “I got out of there fast…They were just smelly bums.”
October 1, 2011
The NY Times beat me to the punch and made their own list of talking points to help educate the kids who have encamped near Wall Street in protest of something. It is painfully clear that many of the protestors do not really understand how Wall Street caused the global depression. However, their intentions are noble, and with some leadership and basic guidance, they can possibly alter the debate ahead of the 2012 elections and get congress and The White House back to focusing on Wall Street reforms that are much overdue.
As a former Wall Street and hedge fund executive, I know better than most just how corrupt our financial systems are. Here are some basic talking points that I would suggest for all of the protestors to learn and use in slogans:
- First of all, stay peaceful. Your message will be marginalized if you turn violent. Emulate Mohandas Gandhi methods.
- Do not let the organized unions hijack your cause. They are as corrupt as Wall Street bankers and you will be marginalized, categorized, and dismissed
- Understand how the Federal Reserve, led by Ben Bernanke, has infused more than a trillion dollars of “free money” to Wall Street in the form of “Quantitative Easing or “QE2”, etc, and in the form of almost zero interest rates to banks. QE2 did nothing but prop up the stock markets briefly, feeding Wall Street. It is well recognized now to have done nothing beneficial to the economy.
- The “free money” at zero interest rate given out by Ben Bernanke and the Fed has made the U.S. Dollar weak compared to other currencies. This directly causes the price of gasoline, food, and other commodities to go up since those items are priced on the U.S. dollar. Therefore, in the Fed’s plan, it is more important to help big corporations export their products than to help the Average Joe have more buying power with their wallet.
- Understand that the Treasury Secretary Tim Geithner, or whom I have coined as Timmy the TARP Man (A new Marvel Comics super hero perhaps?), was directly responsible for bailing out the Wall Street banks in 2008, before he was Treasury Secretary. Then, under the Obama administration when he became the Treasury Secretary with his name on our dollar bills, he and super genius Larry Summers (The guy fired from his job as President of Harvard for making sexists comments) has persuaded the President to back down on tougher Wall Street reforms and to continue to allow the largest banks to exist as “Too big to fail”.
- Understand that some advisers to President Obama, like Paul Volcker (Federal Reserve Chairman under Reagan and critic of Wall Street) and Sheila Bair, Chairwoman of the bank regulator FDIC, tried to liquidate Citigroup, the largest bank and also one with so much toxic debt related to those infamous subprime mortgages instruments called “CDO’s”, but Timmy the TARP Man won the day and bailed out Citigroup with tax payer’s dollars.
- Know that none of the fat cats on Wall Street, who acquired trillions in risky debt via the CDO’s and who directly caused the global financial meltdown, economic depression, and real unemployment around 20%, none of these men have been arrested, yet thousands of protestors on Wall Street have been bused to jail.
- A “Most Wanted” list of Wall Street criminals should be memorized, starting with Stan O’Neill, former CEO of Merrill Lynch who ignored internal risk managers and loaded up with toxic debt CDO’s, and walked away with almost $100 Million in severance pay after he was fired. He drove Merrill Lynch into insolvency and the bank had to be saved by TARP and by being acquired by Bank of America. Other executives with similar stories who’s names should be mentioned on protest signs and to the media include Angelo Mozilo (former CEO of Countrywide who oversaw predatory subprime mortgages being given to millions who could never afford the homes), Dick Fuld (former CEO of now defunct Lehman Brothers), Jake DeSantis (former head of derivatives unit at AIG who took on ultra-risky credit default swaps insuring CDO’s. AIG gave out hundreds of millions in bonuses to employees in 2009 using federal bailout money in a deal approved by Timmy Geithner), Robert Rubin, and others.
- Robert Rubin was the Co-Chairman of Goldman Sachs before being appointed as the Treasury Secretary by Bill Clinton. After his Treasury Secretary post, he went back to Wall Street and ran Citigroup as it accumulated countless levels of toxic CDO’s that caused Citigroup to become insolvent. He walked away, after being forced out, with a reported $126 Million severance package.
- Understand that Wall Street banks became “Too big to fail” as a result of actions by the Clinton administration. In 2000, under the guidance of Larry Summers and Robert Rubin, Clinton signed the of the Financial Services Modernization Act of 1999 (also known as Gramm Leach Bliley) that repealed the 1933 Glass-Steagall Act and allowed wall Street banks to merge with regular consumer banks and insurance companies. Behemoths like Citigroup, JP Morgan Chase, and Bank of America were born.
- Understand that the Wall Street banks make most of their money on the backs of the masses. The banks get money at no interest rate from Ban Bernanke’s Federal Reserve, and turn around and loan it to consumers through credit cards or other loans for more than 12% interest.
- Understand that “derivatives” are unregulated financial instruments that have ballooned into such a global problem that famed investor Warren Buffet called them “Weapons of mass destruction“. Some estimate the value of derivatives at more than $700 trillion. Translation: there is no way the global economy could ever in a million years pay off these debts should they turn into bad deals like the CDO’s of 2008. Wall Street lobbyist money has effectively thwarted any attempt by congress to regulate derivatives.
- After the Wall Street collapse in 2008 through 2009, the only legislation that was passed to attempt to reform the “moral hazard” of Wall Street taking risks knowing that the government will bail them out was the Dodd-Frank law (also known as Wall Street Reform and Consumer Protection Act). The lobbyists watered down the law and the law has not been enacted yet as details still need to be addressed. The vast majority of Dodd-Frank is being stalled in congress.
- The most important provision of Dodd-Frank yet to be implemented is the Consumer Protection aspect via the Bureau of Consumer Financial Protection. This was championed by a Harvard professor named Elizabeth Warren. The Wall Street lobbyists were so effective that they made it impossible for President Obama to appoint her as the leader of the very agency she created. Elizabeth Warren is now running for Senate in the state of Massachusetts.
There are two tangible political goals the protestors should have. The “Occupy Wall Street” camps and others around the country might help Elizabeth Warren get elected to the Senate (not that Scott Brown is a bad person). Also, the fate of the Dodd-Frank law is another outcome that mass protests can influence going into the 2012 elections.