Much has been written these past few days about allegations of impropriety at Goldman Sachs. For example, I commented on the Parasitic Behavior of Goldman to Its Clients.
Some defended Goldman, however, there really is no defense. Worse yet, the problem goes far beyond Goldman to Merrill Lynch, Citigroup, Bank of America, Morgan Stanley, and for that matter everywhere else one looks.
I will get into specifics in a bit, but first consider an email from Timothy who writes
Hello Mish,
I just had to comment on your post. My dad lost 100’s of thousands in GM bonds. He was a 30 year client of Merrill Lynch.
His portfolio is always 100% invested. That’s the Wall Street psychology.
Timothy
Yes Timothy, that is the philosophy because it benefits Wall Street, not the client. Moreover, I am not surprised in the least by the pimping of GM.
Underwriters get paid to pimp garbage. They do not care what fools, pension plans, or widows on their last dime they sucker in. All they are concerned with is pimping the bond, pimping the IPO, and pimping whatever "trading" portfolio the corporation has to whatever suckers they can find.
Moral Bankruptcy of Wall Street
Flashback Aug 5, 2008.
Please consider General Motors and the Intellectual and Moral Bankruptcy of Wall Street by by Karen De Coster and Eric Englund on Lew Rockwell.
On June 25, 2007, Wall Street powerhouse Morgan Stanley put out a “buy” recommendation with respect to General Motors' common stock. Robert Barry, Morgan Stanley's star analyst, proclaimed a 52-week target price of $42 per share. Less than five months later, on November 7, 2007, Wall Street analysts were stunned by General Motors' staggering third-quarter (9/30/07) loss of $39 billion — one of the largest bookkeeping losses in history, which was mostly related to the writedown of deferred tax assets.
Fifty-three weeks after Morgan Stanley's buy recommendation, GM's stock hit a 54-year low of $9.98 per share — on July 2, 2008, after Merrill Lynch's recommendation had gone from a “buy” to “underperform” (i.e., sell) on that day. In one
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Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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