Recently federal prosecutors brought charges against SAC Capital Advisors for securities fraud. Insider trading is business as usual. Hundreds of millions in excess profits is business as usual. If profits are the bottom-line then the distinction between crime and business becomes meaningless. Hedge Funds are the use of investment strategies in derivatives or leveraged investments setting informal agreements between two or more parties under which payments, or payoffs, are to be made between the parties often on future investments that have not yet been secured. In order to borrow heavily then to buy still more shares to sell them at a profit. A firm with more debt than equity is leveraged. All of the above is speculating of future profits with no direct tie to jobs, community services or raising the standard of living of the bottom sixty per cent of the population.
Wall street is the problem. A large amount of liquid capital that flows on a daily basis from one firm to another is absurd. Market speculation is criminal. This speculation is not tied to any commitment to product quality of community service. Family business is in it for the long haul, good times and bad. Public employees the true heroes of America are service workers. Economies should be designed to meet the needs of real people particularly those on the bottom.
Hedge funds, overproduction, use of advanced investment strategies in derivatives, leveraged investments, unprotected selling of securities from a third party, bilateral contracts transferring risks to some one else and ultimately the government and on the backs of working class tax payers is a crime that is legal but immoral.
There should be a stiff tax levied on the financial transactions of large investment firms. There should be a double tax on all Wall Street bonuses with no deductions. Additional taxes placed on high-speed trading, on equity and bond trading, all traded derivatives all of which is part of the speculative market. Taxes should be steep on any private investments not tied directly or indirectly to real production or jobs. The body of proof should always be on the large investment holdings. Until we change our worldview from wealth and power as an end, to public service and pride in the craft crime will be legal and human decency will be utopian.
The public sector to operate efficiently and effectively needs to have a separation from partisan politics of government. We must envision public agencies operating autonomously to carry out the social reforms needed to provide the needed social services, protect wageworkers, small family operated farm and small entrepreneurial run businesses in which the owner does most of the work. The public sector along with reenergized rank and file labor unions are necessary for democracy beginning on the shop floor. The rights to form unions of one’s own choice, to bargain collectively, eliminate unemployment through expanded public works programs is but only the beginning. We need to quit worrying about what the large Wall Street investment firms think. The transfer of large amounts of liquid capital daily with no personal loyalty to products or services provided by American workers is deeply immoral. Profits beyond what is needed to make payroll, upkeep of materials, and creating more jobs is profoundly problematic. Love of the craft, product and a sense of social service should replace profits as the main motive for either business or investments. The attack on the public sector for the sake of increased investment opportunities is intensely depraved and overwhelmingly trying. I would change our economic system, but that is but the beginning. We need to have a culture of participatory democracy embedded in social responsibility.
Hedge Funds are the use of advanced investment strategies in derivatives or leveraged investments. This is unregulated and unprotected selling securities from a third party, buying the assets and selling them back or selling to another party. In order to borrow heavily then to buy still more shares to sell them at a profit. A firm with more debt than equity is leveraged. Buying up bad mortgages, in the hopes some one will buy you out, or the government will bail you out.
Collateral Debt Obligation (CDO) this credit protection allows selling of bad credit. Failure leads to super profits if you buy debts at a fraction of their original worth and then sell them still below their original value but at profit. The last guy standing hopefully will be bailed out buy the government. Either giving you loans at such low interest rates that when things turn around you own assets now worth more than what you paid or government insures your losses.
Hedge funds, overproduction, use of advanced investment strategies in derivatives, leveraged investments, unprotected selling of securities from a third party, bilateral contracts transferring risks to some one else and ultimately the government and on the backs of working class tax payers. It appears to me it is the conservatives who are all for big government when it helps investors without a conscience and against any government if it only helps real living working people.
Think about this next time you talk to a fiscal conservative talking about paying down our debts by cutting social programs, only to give more to the financial investors, i.e. the criminals who got us into this mess into the first place.
If all wealth is theft, then we need to abandon the evil global empire of the IMF, World Bank, WTO, Citigroup Inc., Hedge Funds, Derivatives, Collateral Debt Obligation (CDO).