Friday, 2 September 2011

Gordon Gekko - Wall St, Money Never Sleeps

The Speech.

You are all pretty much screwed. You do not know it yet, but you are the ninja generation. No income, no job, no assets. You’ve got a lot to look forward to.

Someone reminded me the other day that I once said, greed is good. Well it appears greed is not only good, it is legal. We are all drinking the same Kool-aid.

But it is greed that makes my bartender buy three houses, he cannot afford with no money down. And it is greed that makes your parents refinance their 200,000 dollar mortgage for 250,000 dollars. Now they take that extra 50,000 dollars and go to the shopping mall so they can buy a new plasma TV, cell phones, computers and an SUV. And hey, why not a second home while we are at it. (sound familiar?)

Gee Wiz, we all know the prices of houses in America always go up. Right? (just like Australia!)

It is greed that makes the government of this country cut the interest rates to 1% after 9/11 so we can all go shopping again.

They got all these fancy names for trillions of dollars for credit, CMO, CDO, SIV, ABS. You know I honestly think there are only 75 people in the world that knows what they are.

But I will tell you what they are, they are WMDs. Weapons of mass destruction.

When I was away, it seemed that greed, got greedier. With a little bit of envy mixed in.

Hedge fund managers came home with 50 to 100 million bucks a year.

So Mr. Banker, he looks around and says.

My life looks pretty boring.

So he starts leveraging his interest up to 40%, 50% to 100%. With your money not his.
Yours. Because he could.

You are supposed to be borrowing not them.

And the beauty of the deal is no one is responsible.

Because everyone is drinking the same Kool-aid.

Last year ladies and gentlemen, 40% of all corporate profits came from the financial services industry.

Not production, not anything remotely to do with the needs of the American public.
The truth is we are all part of it now.

Banks, consumers they are moving the money around in circles.

We take a buck, we shoot it full of steroids and we call it leverage. I call it steroid banking.

1 comment:

  1. Taleb certainly sheets home blame to the financial sector.

    So do I. Well, regulatory authorities could have grown balls as well.