WALL STREET

Would the world be happier without it ? by Capricorner Hard to answer. Wall street is where the New York Stock Exchange is, and because every kind of Financial activity is to be found in that area it came to pass that Wall Street stood for FINANCE, much like the CITY OF LONDON stands for Finance. No Wall Street is not a Municipality with its own Mayor, like the City of London is. Wall Street in finance-speak is all about F i n a n c e. It is Goldman Sachs, Morgan Staley, CITI et al. Wall Street is Banking and Investments. It creates Investment opportunities and Investment instruments. It employees the best and the brightest from America’s top Business schools as well as Mathematicians who help create “tools”  strategies and “products”. Wall Street is useful in that it provides the Capital companies need, for whatever reasons, as well as advice when companies, or Pension Funds are considering moves involving finance. Wall Street is Mergers, Acquisitions, friendly or hostile Take Overs, Insurance, Hedge Funds and of course the Rating Agencies like S&P, MOODY’S, FITCH and some lesser known. Wall Street is Portfolio Management for individuals and institutions with Trading as one of its big income generators. It is trading that provides bulky profits and it is trading that brought Wall Street down in 2008 triggering the crisis on Main street. Wall Street, however is all too powerful to ignore so the US Government came to its rescue. Wall Street trades in conventional and in NEW products, like Bonds consisting of Home Mortgages “packaged” and sold as Bonds. When the Banks, which had extended mortgages to people who could not afford them and the mortgages were not serviced, began foreclosures the value of the Bonds consisting of mortgages started melting and that set the stage for the general melt down of the “new” financial products, the result is known. Bear Sterns was the first to go, followed by Lehman Brothers. The others were lucky. Uncle Sam was alarmed at the sight of the avalanche and came to their rescue because they were considered too big to fail. Their loss would create an unmanageable (?) crisis (for whom?). There were other composite “products” as well which even the traders did not quite understand, but which they traded none the less. They came to be known as TOXIC financial “products. The losses from these compounded the problems for Wall Street whose games made people talk about the Wall Street Casino Economy. The US taxpayers kept Wall Street alive with the money loaned to the Banks and soon Wall Street was safe and back to its old ways that had brought about its near downfall and the crisis on Main Street. It repaid the loans and the interest on them, so the taxpayers got back their money with a profit. Wall Street was free to resume its games. Main Street is the reflection of the Economy, the physical Economy, the real Economy, not the invisible paper Economy of Wall Street, which creates colossal sales and profits, however with a