A peek at Wall Street Reality (Naked Capitalism)

FRIDAY, APRIL 23, 2010

E-mails From Mordor

A 15 year veteran of Wall Street who put us on to Magnetar disappeared unexpectedly, much to our concern. He resurfaced recently and gave us a bulletin:

Sorry I’ve been out of touch so long.

It’s just that I’ve become quite disappointed/disaffected by the whole thing. We have failed and “they” have won. All the good that could have come out of the debacle has been lost… and it has broken my
heart. The Powers That Be have no inclination to learn anything or correct any of the imbalances. What is even more soul crushing? They are actively and desperately attempting to wrench things back to the
way they were. That would be “Mission Accomplished” and it disgusts me.

Every day I go to work in the Bubble that is Wall Street. A bunch of self-important ass clowns that think they somehow deserve or have earned their outsized compensation. We move paper from one side of
the desk to the other and call it “PnL”… and the idiots in this business think they’re talented enough in doing so that they *deserve* to make $4mm bucks a year for doing so. Its a joke. I suppose what
makes it harder to swallow is the fact we had such an amazing opportunity to correct those imbalances… and that opportunity was stolen.

What throws me over the edge is the trend line of where things are headed. All the garbage the people find so offensive — CDOs, proforma loan origination with risks shuffled off to the dumb money via securitization, a culture of insider trading where the playing field is anything but level — is but months away from again becoming the status quo. AND THAT IS EXACTLY WHAT THE AUTHORITIES WANT!!

We have lived through the single greatest injustice in the history of mankind. And it all played out in shockingly clear detail. Yet nothing is going to be done about it. No ill-gotten gains will be disgorged, no rules will be meaningfully changed, and not a single person who caused this will be asked to answer for their misdeeds. The American people have been robbed at gunpoint… and no one cares.

I spent six months unable to fathom all of this. I sat there like it was 1945 saying to myself like I’m sure people at the time said of the Holocaust: “given the evidence we’ve all seen, its just a matter of
time…” But its not going to happen… they want to put Humpty Dumpty back together again like nothing ever happened.

Now I’ve moved on. We’re now in the biggest bubble of all time… and I’m more confident than ever that I know how this ends. This ends in tragedy, in a way where no one will be left standing. They’ve turned
what would have been a complete collapse of the private sector economy into something that at some point will be a complete collapse of our system as we know it. These sorts of imbalances — economic, social, and political — can not be sustained indefinitely. They will destroy us… I have never been more sure of anything.

Until then however, I’ve given up. They have won and it has broken my heart.

Yves here. Before some of you start moralizing that the author is still working for Big Finance, consider a lesson from the Holocaust. Because I am in London and can’t access my files, I am doing this from memory.

I read a book review in the New Republic on the Bulgarian leadership in World War II. Bulgaria was alone of all the Nazi states in that it refused to turn its Jews over to Germany for extermination. The review had an exceptionally eloquent paragraph that mused on how unblemished virtue may be ineffectual, that the sort of “good” that can make a real difference, like saving lives, may of necessity tainted by evil.

A second e-mail from our correspondent:

The one caveat I want to make clear is this: I’m not complaining about my predicament. I do what I continue to do of my own free will… clearly. I suppose there’s a few reasons why I’ve stuck around. First, as maddening as this whole thing is, I expect I’d be frustrated to death if I didn’t have an inside seat. Making sense of it all through the MSM and the blogosphere I think would be impossible. I suppose I get some sense of personal satisfaction seeing everything play out first hand. At least that way I can see the pieces moving and have some sense of how and why they’re doing
what they’re doing.

Second, I still think I can do more good as part of the apparatus as opposed to being on the outside. People still listen to me… and just maybe with every day I have a small soap box there’s one
additional person I can convince how rotten Business As Usual truly is. I expect I’m being optimistic on this part… but I can keep my fingers crossed and hope.

Yves again. Camus said, “Il faut imaginer Sisyphe heureux.” Sometimes I think that is my motto.