What the US banking industry is and what has happened as a result.
This column in Wall Street on Parade by Pam Martens and Russ Martens is worth reading. From the column:
. . . Let’s recap what the public has learned over the past eight years about the Wall Street banking model from hell. (1) The greatest housing collapse since the Great Depression resulted from Wall Street banks muzzling their internal whistleblowers who wrote memos to management and shouted from the rafters that the banks’ mortgage loan departments were ignoring their own compliance rules and buying up tens of thousands of mortgages with wildly overstated incomes by the mortgage holder. (2) The banks then knowingly bundled these toxic mortgages into pools and paid the ratings agencies, Standard & Poor’s and Moody’s, to assign triple-A ratings to the offerings (called securitizations). (3) The banks knew these toxic mortgages would fail but they sold them to their customers as sound investments. (4) The banks also used their insider knowledge that the mortgages were going to fail to place bets (short sales) and reap billions of dollars in profits as the U.S. housing market collapsed and families were thrown into the streets.
Last December, “The Big Short” movie began to play in theatres across America, allowing millions of people to see how the unchecked, insidious greed of Wall Street had destroyed the nation’s economy along with the reputation of Wall Street, the ratings agencies and the revolving door regulators. (See video below.) The movie was based on real-life people on Wall Street and adapted from the book by the same title by author Michael Lewis, an authoritative source through his previous career on Wall Street.
Years before the movie made it to the big screen, thousands of activists around the country created the Occupy Wall Street movement to advocate for a realignment of their democracy and a radical overhaul of what Wall Street had become: a thinly disguised wealth transfer system for the one percent, being propped up by a corrupt political campaign finance system. After commanding news headlines for months and being carefully monitored by government surveillance, a brutal police eviction was orchestrated against Occupy Wall Street, journalists covering the protests and even New York City Council Members attempting to monitor what was happening. Congressman Jerrold Nadler sent a letter on December 6, 2011 to Attorney General Eric Holder at the U.S. Department of Justice requesting that an investigation be undertaken. Nadler’s description of the events were reminiscent of a police state protecting the criminals: . . .
The column explains what this toxic culture has done to IPOs. And do read the whole thing: it’s good to be reminded of the sort of society in which we actually live.