Friday, February 20, 2015

Humbling Wall Street: So it happened

They said it wasn't going to happen. Wall Street controls Washington. Guess the pundits were wrong and I have waited long enough for this to become popularly wrong.

We have to be patient with America, which loves to learn the most important lessons the hard way. Even as I write this, I recall articles I just read about Obama telling a meeting of leaders against terrorism a strategy remarkably similar to ours. They had as usual begun with using the military to nix the unsolvable problem. After more than a decade they are finally learning.

People now worry about sub prime coming back here and there especially in automobile financing but I think that is exaggerated. I don't know for sure. The nature of this business is even if I know I won't say so publicly because it will do funny things to your thinking. Very rarely are you almost completely sure.

Update: Feb 23 10:00 pm

Most telling for this behemoth.


  1. Don't be deceived. They just move on to another plane. Just take a look at this article "Too Big To Fails" have stopped being banks

    1. Thanks, but keep it simple, stupid. Just look at the bonuses. They have shrunk. Then go find out who if any are getting those payouts. That blog article you pointed out was sensationalizing and misusing information.

    2. Not sure whether Timothy Geitner sounds too simple but just stupid. He mentioned about substantially reducing risks while cutting profitability by half. That does not also necessarily also means reducing losses by half.

      In the spirit of the new year, it is probably not that cordial to call anyone stupid as it hints of a closed mind and it defeats the real intent of sharing information and views.

  2. Probably true to the extent George Washington blog tends to be hyper critical on the subject. One pretty "balanced" obsever, Mayra Rodriguez Valladares, writes regularly for the American Banker on the financial scene in US. Her latest piece is "Why The Problem of Too Big To Fail Just Won't Die"

  3. Basel I, II, III and IV on the way, have never been simple but in various instances, stupid (which is why the earlier editions failed to address the financial crises, one after another)
    Bonuses have shrunk - they should be, since they will be starkingly obscene when many have been retrenched from the financial sector alone and productive economic activities have shrunken. With the many law suits coming down hard on the banks (and select executives) - and not forgetting the IRS - it is unwise to flash big paychecks. There are always other ways to get the equivalents.

  4. We have our own "too big to fail" problem in Singapore. It is political and designed to be that way. Very sinister. Really needs a super group of statesmen to sort this one out.

  5. Once there is over-concentration of power and resources, TBTF will be a killer disease. That is why we see the development of the 1% v 99% state of mal-distribution, the phasing away of lack of integrity and proper work discipline into one of KPI- "die die must produce" even at the cost of faking and destruction of other co-workers . Despite all the calls for transparency and governance, a TBTF state only facilitates coverup and creates a vicious cycle that will herald the destruction of civilisation.