SAINT OR SCOUNDREL? "No need to regulate derivatives, its lovely. Its the most beautiful creation since the Mona Lisa and the Sistine Chapel", said the regulators, investment bankers and professors of economics. Well, in 2008, the halo of sainthood broke amidst the increasing defaults by American homebuyers who were deceived by predatory lending practises into taking loans and mortgages that they would never be able to repay. "Come on... there's NO WAY the price of your house would stagnate or fall. Its going up, up and up!" sang the chorus of lenders while keeping quiet on the fact that the teaser rate of low interest will end in 2-3 years time, and the poor borrowers may end up having to pay TWICE their monthly instalment coming into year 3.
TWICE THE SCOUNDREL. Not satisfied defrauding the borrowers, Wall Street financial 'wiz kids' cobbled together subprime mortgage bonds, credit default swaps, Collaterized Debt Obligations and Synthetic CDOs (God knows what they are!) to essentially play Russian Roulette with the American Economy (and ergo, Global Economy). When the going was good nobody complained and the American public had no say... "You guys are too simple" they intoned, "You cannot grasp the complexities of these trades" they said condenscendingly, "Trust us", they pleaded. Then in 2008, everything went belly up, and a huge stinking whale of almost a Trillion Dollars ended up on the shore of America.
INDIVIDUAL SUCCESS AND SOCIAL FAILURE. Now suddenly, it's "a social problem", and the US government needs to bail out these gentlemen. I leave you with this quote from Michael Lewis's book ("The Big Short") - "The ability of Wall Street traders to see themselves in their success and their management in their failure would later be echoed, when their firms, which disdained the need for government regulation in good times, insisted on being rescued by government in bad times. SUCCESS WAS INDIVIDUAL ACHIEVEMENT; FAILURE WAS A SOCIAL PROBLEM." Wow.
Problem? What problem?
Problem? What problem?
OBAMA. Now, I am not an American, but I don't see things changing at all under Obama's presidency. Its like watching a horrid bloody road accident and later seeing the same dangerous drivers being given a new set of car keys, without even a demerit on their licenses. And them shiny new cars are all paid by the American Taxpayer. Oohh... my head hurts thinking about it.
FINANCIAL INDUSTRY IS NOT AN INDUSTRY. You know, I am all for individual responsibility. After all, nobody forced the low-credit borrowers to take up the loans. But nobody also forced the bankers, rating agency and Wall Street traders to take a gamble too. I think there is a pattern here. Where consumerism and unbridled greed becomes the norm in a poorly regulated industry, prepare to see the least appealing of our human nature. We must face the fact that men are not angels, and a miniscule percentage of us are saints, the rest of us being the Mr. Typical Joe willing if tempted, to make a quick buck, especially if we are betting with someone else's money.
THERE IS ALWAYS HOPE. I hope America will be able to recover its traditional base - hard working Americans in manufacturing, research and innovation (which they are still capable cleary capable of doing, see their world-leading ICT industry). And the financial services industry being a 'support and services' sector to REAL trade and industry, instead of the uncontrollable nightmare-machine that it is now.