02/24/10 Stockholm, Sweden – Matt Taibbi of the Rolling Stone has released his latest rant against Wall Street’s dirty dealing, and it’s a doozy. The pummeling of financial markets as a result of the crisis has done little to stave off Wall Street’s insatiable greed… and has instead done a great deal to amplify the creativity of banks to find new ways to extract profit from easy prey like the bumbling or complicit US government and the blindsided US taxpayer.
From Taibbi in Rolling Stone:
“There’s even a term in con-man lingo for what some of the banks are doing right now, with all their cosmetic gestures of scaling back bonuses and giving to charities. In the grifter world, calming down a mark so he doesn’t call the cops is known as the ‘Cool Off.’
“To appreciate how all of these (sometimes brilliant) schemes work is to understand the difference between earning money and taking scores, and to realize that the profits these banks are posting don’t so much represent national growth and recovery, but something closer to the losses one would report after a theft or a car crash.
“Many Americans instinctively understand this to be true — but, much like when your wife does it with your 300-pound plumber in the kids’ playroom, knowing it and actually watching the whole scene from start to finish are two very different things.
“In that spirit, a brief history of the best 18 months of grifting this country has ever seen”
Taibbi then launches into a detailed and colorful description of each of the seven greatest financial atrocities he’s witnessing. He likens each unsavory strategy in the world of international high finance to one of seven popular scams run every day by regular con men in the street…
- CON #1 THE SWOOP AND SQUAT
- CON #2 THE DOLLAR STORE
- CON #3 THE PIG IN THE POKE
- CON #4 THE RUMANIAN BOX
- CON #5 THE BIG MITT
- CON #6 THE WIRE
- CON #7 THE RELOAD
He also pulls in quotes from knowledgeable industry players that have their own independent critiques of the swindles currently underway. For example:
“Had AIG gone bankrupt, Goldman would have likely lost much of the $5.9 billion that it pocketed as collateral. ‘Any bankruptcy court that saw those collateral payments would have declined that transaction as a fraudulent conveyance,’ says Barry Ritholtz, the author of Bailout Nation.”
Ritholtz is an occasional contributor to The Daily Reckoning as well as a speaker-alum of the Agora Financial Investment Symposium. He’ll be back in Vancouver again this year… and you can learn about how to attend here.
Taibbi’s latest article is again a must read if you’re at all interested in how banks are making record profits in the worst economy since the Great Depression. Rolling Stone has the entire article entitled, Wall Street’s Bailout Hustle.
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of The Daily Reckoning. Previously, he was founding publisher of UrbanTurf and RFID Update, which he operated from Brazil, Chile, and Puerto Rico, and associate publisher of FierceFinance. He specialized in direct marketing at MBI, facilitated MIT Sloan School of Management programs, and has been featured on CBS. Vega graduated with honors from Harvard University, where he was on the board of Let’s Go Publications and directed business programs involving McKinsey, Goldman Sachs, and Harvard Business School faculty. He is also enrolled at the Stockholm School of Economics.
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Nice Rocky, one of your better posts.
Time to get a new plumber(s).
If the Top Bankers did this to the mob or in many countries, next Monday the banks would have a new set of Top Bankers and the old bankers would be feeding the fishes!
This would encourge the new Top Bankers to be more carefull with other peoples money.