[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Sign-in]  [Mail]  [Setup]  [Help] 

Status: Not Logged In; Sign In

“The government wants to make sure that that does not come out. A huge part of our political system is predicated on blackmail,”

You Know What Happens Next

Cash Jordan: Half-Built Tower Abandoned… as ICE Deports Entire ‘Migrant Workforce’

Heavy rainfall causes flash flooding Tuesday night, some cars stuck in high water on Chicago's West

Biden Doctor PLEADS THE FIFTH, Refuses To Testify To Congress, Biden Pardons ARE VOID

Joe Rogan says FBI director Kash Patel played him for a fool and maga for fools with the Jeff Epstein files

Elon's AI System "Grok" Went Rogue And Has Been SHUT DOWN in an Emergency!

Earthquake Swarms at One of the MOST DANGEROUS Volcanoes in the USA

Ben Shapiro Declares Epstein Case CLOSED: ‘Facts on the Ground Have Changed’

Iran receives 40 Chinese J10-C Fighter Jets

China’s Railgun Is Now Battle-Ready, Thanks to Nuclear Power

Chinese Hypersonic Advancements! Deadly new missile could decimate entire US fleet in 20 minutes

Iran Confirms Massive Chinese HQ 9 B Missile Deal

Why Is Europe Hitting 114°F And Still Rising?

The INCREDIBLE Impacts of Methylene Blue

The LARGEST Eruptions since the Merapi Disaster in 2010 at Lewotobi Laki Laki in Indonesia

Feds ARREST 11 Leftists For AMBUSH On ICE, 2 Cops Shot, Organized Terror Cell Targeted ICE In Texas

What is quantum computing?

12 Important Questions We Should Be Asking About The Cover Up The Truth About Jeffrey Epstein

TSA quietly scraps security check that every passenger dreads

Iran Receives Emergency Airlift of Chinese Air Defence Systems as Israel Considers New Attacks

Russia reportedly used its new, inexpensive Chernika kamikaze drone in the Ukraine

Iran's President Says the US Pledged Israel Wouldn't Attack During Previous Nuclear Negotiations

Will Japan's Rice Price Shock Lead To Government Collapse And Spark A Global Bond Crisis

Beware The 'Omniwar': Catherine Austin Fitts Fears 'Weaponization Of Everything'

Roger Stone: AG Pam Bondi Must Answer For 14 Terabytes Claim Of Child Torture Videos!

'Hit Us, Please' - America's Left Issues A 'Broken Arrow' Signal To Europe

Cash Jordan Trump Deports ‘Thousands of Migrants’ to Africa… on Purpose

Gunman Ambushes Border Patrol Agents In Texas Amid Anti-ICE Rhetoric From Democrats

Texas Flood


Science/Tech
See other Science/Tech Articles

Title: The Next American Revolution: Main Street vs. Wall Street
Source: [None]
URL Source: http://seekingalpha.com/article/118 ... ion-main-street-vs-wall-street
Published: Feb 3, 2009
Author: Mark McQueen
Post Date: 2009-02-03 09:17:27 by tom007
Keywords: None
Views: 340
Comments: 14

The Next American Revolution: Main Street vs. Wall Street by: Mark McQueen February 03, 2009 Mark McQueen Mark McQueen Add to Your WatchlistAbout this author:

The stories are well known:

* American Automaker executives flying to Washington in private jets to beg for government handouts. * Two hundred thousand dollar California spa bills at AIG (AIG), even after the U.S. taxpayers had to bail that insurance company out of certain bankruptcy. * Eliot Spitzer and his difficult three diamond session. * Citigroup (C) taking delivery of its new $50 million Falcon after receiving more than $40 billion of preferred share capital from the U.S. Treasury to keep the world’s Financial Supermarket from the annals of Receivership.

The impetus for the French Revolution can’t be summarized in a blog post, but there were two core elements that strike me as perfect parallels for the ongoing lack of judgment among some elites south of the border. I’ve always thought that average Americans shared many of the ideals of The Enlightenment, particularly equality and freedom of the individual.

Now that American taxpayers are bailing out many of the elites of their society, the parallels to pre-Revolution France begin to appear. Louis XVI took power during a financial crisis. France was nearing bankruptcy and the costs of the government exceeded tax revenues. Some of the most blessed in society didn’t pay tax.

After several years of deficits, the U.S. government has been forced to dig even deeper to ensure that Citigroup, Morgan Stanley (MS), GE Capital, General Motors (GM), etc., stay solvent just long enough for the economy to recover. In the meantime, President Obama is in the unhappy position of having to respond to the spectacle of Wall Streeters taking in $18.4 billion of bonuses even as the TARP funds continue to flow.

And this is where the prospect of a virtual revolution kicks in. If you work at a technology company that is in dire straights and hits the wall, your severance and benefits are an unsecured liability, you might get zippo from your employer. At Merrill Lynch (MER), for example, insolvency was only staved off by the intervention of the U.S. Treasury. But that didn’t prevent John Thain from recommending (and paying) $4 billion in bonuses just prior to the closing of the Bank of America (BAC) acquisition. And that patent unfairness will be the genesis of this modern day revolution.

It isn’t that average citizens reject the idea that risk-takers should be rewarded. Americans have none of that “Tall Poppy” syndrome that we see here in Canada. But this situation is different. Even failed risk-takers are being rewarded: that’s something that will not go over well in coffee shops across the 50 States. The idea that “we need to pay people to retain them” is just poppycock in this situation. The company is insolvent — you don’t have anything to pay them with. And, since the rest of Wall Street also took TARP funds, they probably can’t hire these teams away from you, either. The notion of pay-for-retention is a hollow argument.

There won’t be torches and pitchforks in this revolution; it will be the tax system and compensation caps that are brought to bear instead. But elected officials will have to make a choice: Pick the side of Wall Street or Main Street.

The choice will be an easy one to make.

Post Comment   Private Reply   Ignore Thread  


TopPage UpFull ThreadPage DownBottom/Latest

Begin Trace Mode for Comment # 6.

#1. To: tom007 (#0)

Even failed risk-takers are being rewarded: that’s something that will not go over well in coffee shops across the 50 States.

The real "risk takers" aren't being rewarded. The real risk takers (Investors) have already lost their risk capital and are now being taxed to reward those that risked their capital foolishly.

Let's get it right. The retirement and money market investors have been robbed already, and are now being asked to reward the thieves through taxation.

One last comment here. The sub-prime mortgage debacle is not the huge problem as it's being portrayed. The derivatives fraud is the elephant in the living room.

noone222  posted on  2009-02-03   9:29:50 ET  Reply   Untrace   Trace   Private Reply  


#3. To: noone222 (#1)

. The derivatives fraud is the elephant in the living room.

According to some sources, some banks have something like 400:1 leverage if derivatives are fully accounted for.

And a few smart folks feel nearly all large US banks are insolvent.

tom007  posted on  2009-02-03   9:42:58 ET  Reply   Untrace   Trace   Private Reply  


#6. To: tom007 (#3)

And a few smart folks feel nearly all large US banks are insolvent.

There's no 'feel' about it, my man. It's a fact.

US bank deposits total $7 trillion. Assets total $275 billion. That leaves the banks $6.725 TRILLION short. FDIC can cover about $40 billion. Do the math.

Esso  posted on  2009-02-03   9:53:03 ET  Reply   Untrace   Trace   Private Reply  


Replies to Comment # 6.

#7. To: Esso (#6)

Checked my bank (sock) this morning, two bucks safe and secure.

Cynicom  posted on  2009-02-03 09:55:21 ET  Reply   Untrace   Trace   Private Reply  


End Trace Mode for Comment # 6.

TopPage UpFull ThreadPage DownBottom/Latest


[Home]  [Headlines]  [Latest Articles]  [Latest Comments]  [Post]  [Sign-in]  [Mail]  [Setup]  [Help]