After watching "Liar's Playing Cards", I rekindled my passion for Wall Street. At that time, when I was walking on this street, passing by the New York Stock Exchange and JP Morgan Building, I was full of awe and yearning for Wall Street. At this time, after being baptized by ideology, I discovered how unsightly the rules of the game in that world are. This is the gap between ideal and reality!
Rule NO.1: If you want to survive on Wall Street, you can't have other beliefs, you can only believe in money! If you want to survive in Washington, you can't have other beliefs, you can only believe in rights!
Rule NO.2: Always remember Rule NO.1!
"Too Big to Fail", "The Big Short", "Steal Yourself", and "Ultimate Business" take the 2007 global financial crisis as the background, and focus on how Wall Street and Washington participate in the harvest of ignorant ordinary people from different perspectives. Of course, including some economists from Harvard, Columbia, and the University of Chicago!
It all started with Lewis Lagley of Salomon Brothers Mortgage Bonds: the man who created the road to destruction in the mortgage bond market, and since then financial derivatives CDOs have become Wall Street's weapons of mass destruction, sweeping the world, and the subprime mortgage crisis has directly triggered the global The financial crisis has caused the world to lose tens of trillions of dollars, and China has also caused more than 10 million people to lose their jobs. But what did we do then? We don't even know what a CDO is! We had diarrhea before we even had the cake! George Soros, a master of financial speculation, bluntly said that he did not understand this kind of gameplay at all, and felt out of touch with the times.
After decades of financial regulation, Wall Street and Washington suddenly reached an agreement and decided to amend the law to repeal the Glass-Steagall Act (anti-monopoly act), encourage financial enterprises to become bigger and stronger, and at the same time cancel the restrictions on financial institutions. The regulation of derivatives products has made the next series of bottomless god operators famous (Pier Ponte Morgan will cry in the toilet if he sees this situation. President Roosevelt introduced Glass-Steier to limit the Morgan consortium. The Guer Act, abruptly split the Morgan consortium into JP Morgan, Morgan Grenfell, and Morgan Stanley). Greenspan, then the chairman of the Federal Reserve, was the initiator of the financial crisis. He once participated in the financial fraud in the 1980s as the chief economist of Charles Keating! During their tenures, Clinton and Bush, for the sake of votes and public opinion, did whatever it takes to stimulate the economy, fool the ignorant people, and fuel the burst of the big financial bubble. There may be a deeper reason: they can take office because of the generous funding of the big financial groups behind them, so once they are in power, they must repay these behind-the-scenes promoters, and it is very logical to blatantly gang up on Wall Street under the guise of stimulating the economy. . When you need to regulate the financial industry, use Keynesianism to talk about it, and when you need to deregulate the financial industry, use Hayek's laissez-faire capital market as a prevarication!
The real estate securitization model created by the father of mortgage bonds, Lewis Lagley, was later improved by some extremely smart mathematicians, and a financial derivative CDO was created through a financial mathematical model. Loans, car loans, and credit card debts are all packaged into this compound financial derivative. From 2001 to 2007, 5 investment banks, 2 consortiums, 3 insurance companies, and 3 credit institutions on Wall Street monopolized this financial fraud game. All the financial institutions involved have made a lot of money. The game rules of this strange combination are astounding: first, the lending institution pays a high guarantee fee to the guarantee company to obtain a guarantee certificate, and the guarantee company will of course issue a certificate in order to make money. Real estate loan contracts are sold to investment banks (Goldman Sachs, Morgan Stanley, Lehman Brothers, etc.), and then the investment banks package them to create CDO derivatives, and at the same time, investment banks pay to find rating agencies (Moody’s, Standard & Poor’s, Fitch) for CDOs The products are rated and scored (of course, they all score 3A), and finally the investment bank sells these CDOs to customers, including insurance companies, funds, and retail investors. As a result, lenders, investment banks, rating agencies, and guarantee companies all got on the same boat of thieves, and investors had no tickets.
There is always a time when the bubble bursts, not to mention such a huge super bubble! The question is who will bear the consequences when the music stops? This time, the financial fraud co-starring Wall Street and Washington was finally paid by the American people and participants from all over the world, and Washington and Wall Street could stay out of it so freely.
The role of Goldman Sachs Group in this financial crisis is even more fascinating. From the results, Goldman Sachs has more sophisticated skills, and its background is obviously much stronger than that of Lehman Brothers! Goldman Sachs, while packaging and selling toxic CDOs, also bought a $22 billion gambling contract from AIG to insure itself. At the same time, they also realized that AIG might go bankrupt, so they went to the insurance company to buy double insurance. The movie "Ultimate to the Sea" starring Kevin Spacey alludes to Goldman Sachs Group. They were informed of the financial crisis earlier than their peers. They were so shameless that they sold all their clients. They sold almost all their toxic assets to clients in half a day. Even my mother betrayed! Goldman Sachs CEO Henry Paulson's salary in 2005 was as high as 310 million US dollars. In 2006, he got out of the shell and was promoted to Secretary of the Treasury by Bush. According to the regulations, he must sell all Goldman Sachs shares before taking office. Bush also opened a special tax avoidance channel for him, so that Paulson avoided $50 million in taxes. Paulson has become a veritable king of the leek harvest! In 2008, Henry Paulson presided over the aftermath of the financial crisis. It is conceivable how Goldman Sachs Group could be in such troubled waters? The scapegoat can only be Lehman Brothers, see "Too Big to Fail"! Henry Paulson transformed from leek harvester to financial crisis savior, "I bought a bag last year!" When AIG was about to collapse, the government took over it, Henry Paulson and Bernanke asked Congress to raise 700 billion The U.S. dollar bailed out the banking industry. When AIG was bailed out, Paulson and Bernanke forced AIG to pay the full amount of the gambling position owed to Goldman Sachs at the first time, and no bargaining was allowed! AIG's bailout cost taxpayers $150 billion, and Goldman Sachs is the biggest beneficiary! What's more, Henry Paulson forced AIG to waive its right to sue Goldman Sachs and other banks for fraud. AIG was beaten alive by the Federal Reserve and the Treasury Department!
Afterwards, the group of protagonists who caused the financial crisis retreated, only Lehman Brothers went bankrupt, but none of their executives were held accountable for the wealth they had earned before; the CEO of the National Financial Corporation earned $470 million and left ; The CEO of Merrill Lynch earned $90 million in 2006-2007, and the board approved his resignation and took a severance package of $160 million; AIG’s financial product division lost 11 billion, and the financial director was not fired but served as a consultant, with an annual salary of more than 1,000 It is reasonable to say that Wall Street should be restrained after this crisis, but instead of being regulated by the Trust Act, those banks have become larger and larger through mergers and acquisitions, and the financial industry has recruited 5 times the number of members of Congress, which has a political impact on Washington From 1998 to 2008, the financial industry spent 5 billion US dollars on congressional lobbying and political donations. After the financial crisis, it intensified its investment in manipulating Congress. Economics professors and even presidents at top schools like Harvard, Columbia, and the University of Chicago have also contributed to the feast, earning big bucks by serving as advisors to the financial industry. I am glad that my idol, Professor Daniel Kahneman, did not participate in this benefit distribution. Perhaps it is more reliable to say that behavioral economics professors like Kahneman are doomed not to enter Wall Street, because they are always in conflict with traditional economics. Scientists sing the opposite.
The above facts have long been history and are well known in the industry, but this history is no coincidence. Does Wall Street and Washington's rioting only happen in the US? Absolutely not. All capitalist worlds play like this. The difference is that some places are not as big as the Yankees, and some places don’t let the common people know the truth. This is the capitalist world, which is very in line with the rules of the game of evolution: there is no right or wrong in this world. , only natural selection, survival of the fittest, survival of the fittest, and natural selection!
Now look to the financial markets of the next few decades, will they repeat the same mistakes? I think it will, because human nature remains unchanged, the pressure of this slow accumulation to cause a crisis is huge, but I don’t know when and where it will happen again? Life is like a strong X, if you can't break free, learn to enjoy it! This is the truth that evolution teaches us. Today, if you asked me if Wall Street was the dirtiest place in the world, I would say no, because I think Washington is better! The Democratic Party Obama criticized the Republican Bush for creating the financial crisis, and threatened to take a series of financial reforms. It was just a political show to pave the way for his own presidential election. How will Obama formulate measures to suppress his backside after taking office? the gold lord? Years later, Trump re-enacted this political show. The current competition between the Republican Party and the Democratic Party will not have the slightest impact on the dominance of Wall Street. The two parties are just assigning their respective Oscar best actor to the post of President of the United States!
The pattern of the "Bronze Age" was broken and caused itself to be annihilated by human nature, while the "Blue Space" learned the truth that the person who knows the times is a hero: don't try to test human nature, because human nature can't stand the test...
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