So its good riddance to Gordon Gekko. Maybe it is. I confess Im stumbling about in the dark on it but this is big, man. Wall Street in crisis: Last banks standing give up investment bank status. The move spells the end of Wall Street as it has existed until now.. is the mother of all headlines. Goldmans and Morgan Stanley have rushed to take shelter under the Fed before the crunch destroys them is how I read it. Surrender to the cops and plea bargain before the posse catches up. Have Goldmans moved first to forestall tighter regulation? The Reuters financial snap covers it best so far. So what happens now to hedge funds and derivatives, do they go out of business? If the new banks from now on rely on equity based finance and their existing deposits, all very prudent, is risk-taking a thing of the past and will the whole world economy slow down? Might we look back wistfully to the old days of Bluebeard the hedge fund pirate in a month or two? And note this: (There is a possibility that China’s sovereign wealth fund China Investment Corp could increase its stake in Morgan Stanley, according to sources familiar with the situation. Another sign of these revolutionary times. (if youre a banker). Gordon Gekko quotes below the fold
The richest one percent of this country owns half our country’s wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It’s bullshit. You got ninety percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you’re not naive enough to think we’re living in a democracy, are you buddy? It’s the free market. And you’re a part of it. You’ve got that killer instinct. Stick around pal, I’ve still got a lot to teach you.
Former BBC journalist and manager in Belfast, Manchester and London, Editor Spolight; Political Editor BBC NI; Current Affairs Commissioning editor BBC Radio 4; Editor Political and Parliamentary Programmes, BBC Westminster; former London Editor Belfast Telegraph. Hon Senior Research Fellow, The Constitution Unit, Univ Coll. London