Wall Street Throws A Tantrum

I appear to be the skeleton at the feast. I do NOT think this is a great column, largely because there is no discussion of what should be done.

The parenting analogy is debateable. However, if we accept it, any parent knows that positive reinforcement of good behavior is at least as important as allowing the negative reinforcement from the natural consequences of poor behavior to procede without impedance.

So what is desirable behavior, Mr Gross? Does positive reinforcement come from regulation? Wall Street may throw the biggest tantrums, but we all pay for these messes, no matter what is done. Anbd the other commentors are right --rich people are likely to pay less than their "fair share".

So tell me what you think should happen and why. Don't just moralize. It makes you sound like Bernanke .

Daniel, your article is right on! As an "older" financial planner who's seen a lot of financial turmoil over the years, this current situation is extreme in the reactions coming from not only those responsible for much of it, but also those responsible for reporting it to the public! As I watch the "market mavens" on CNBC and other financial news programs, your article applies as much to those commentators as much as the traders and financial professionals directly connected to the markets. A prime example is commentator Dennis Kneale on CNBC. Obviously a "newbie" to these financial turmoils, his rantings against the fed and Ben Bernake are infantile. Others like Mark Haines have a much more reasoned and mature approach, but his rationale is often overcome by the sheer inertia of the whiners like Dennis Kneale, Jim Cramer and others.

Unfortunately the column is completely accurate, but it shouldn't be limited just to Wall Street. It applies to all Republicans and their business interests. Republicans applaud market forces when there are profits but want the government to bail out their losses

Wall Street has a point. The traders are taking a short-term outlook, it seems but what about the mature rich? People wonder why the economy has tanked, particularly now. This article
http://www.scragged.com/articles/why-the-market-crashed.aspx
explains that stocks are going down because rich people are selling out and buying gold. Rich people want to stay rich, so they grabbed their wallets and climbed into lifeboats.

here, here! I couldn't agree more. The stock market is nothing more than legalized gambling. In this case, let a few knees get broken. Let a few firms go under. Pain is not a bad thing - it reminds us that we did something stupid.

I'm a taxpayer who is personally wiling to ride out whatever impact this has - I'm sick of footing the bill for Charles Prince and these other idiots who made bad decisions. Let them lose their homes. Let the stockholders forego dividends (God forbid!) and see share prices fall. Isn't that what a free market is?

Call me crazy, but I'm a Democrat who's starting to think Ron Paul's cal to eliminate the Fed makes sense.

If I'm not mistaken, the comment attributed to Wendy Mogel -- "Good judgment comes from experience and experience comes from bad judgment" was actually made long ago by Will Rogers.

If I'm not mistaken, the comment Mr. Gross attributes to Wendy Mogel: "Good judgment comes from experience and experience comes from bad judgment" was actually made long ago by Will Rogers.

I am more than a little fed up with "the Street". Mr. Gross is correct - these people on Wall Street think all they have to do is whine loud enough and the government will come running to their aid. So far this is working - but at what cost and what long term ramifications. He is also correct when he says - the economic fixes are more about Wall Street than Main Street. There hasn't been anything about Main Street in a very long time. This the government can fix - by getting out of bed with big business and considering what it can do about a domestic policy. This fix we are all in is all about greed - from the Street, from the big banks, and from the government which sets the standard. Wake up - greed just isn't "in" anymore...have a tantrum over that.

It's easy to jump on the bandwagon to knock Wall Street (as easy as GOP candidates pandering to the party base by knocking Hollywood). But look at the stock price of financial shares; it's not as if investors in these companies, of which a large part are the companies' employees themselves, haven't lost a lot money as well. Financial companies have by far been the worst performers over the last year, by some measures the worst performance by banks relative to the market since the great depression. We've entered the realm of systemic risk and if the fed didn't ease or inject liquidity into the system some very large institutions, which many of these readers trust for their banking needs, would go bankrupt (they still might). This isn't your small regional bank, it's the likes of Citigroup and Merrill Lynch. I widespread bust in the banking system without Fed easing is what led to the Great Depression as well as the moribund growth that has characterized Japan for the last 18 years. If you want to point the blame somewhere, point it at Greenspan and the Fed for too low interest rates in the 2002-2004 period, and too lax regulation of the banking system in the first place. You can also blame foreign central banks' whose massive intervention in their currency market (artifically keeping their currencies weak and the dollar strong) was a significant contributor to the OECD housing bubble (as many of these currency reserves are invested in government bonds like treasuries, depressing long dated interest rates and in the process keeping mortgage rates lower than they otherwise would have been, which encouraged the housing boom. The unfolding subprime crisis in the banking sector is just a symptom of that environment. It's too easy for news magazines and politicians to blame Wall Street; who is blaming the millions of Americans who recklessly speculated on overvalued property? They were just as guilty as Wall Street of trying to get rich quick.

Yep and the worst actors have offshored, like Halliburton, to get beyond the reach of the law.

Excellent article. Refreshing to have someone suggest that taking responsibility for your own actions might be a good idea. The Fed and the rest of Washington need to stop pandering to the "victims" who caused this mess. Rewarding bad decisions by bailing out these speculators will only enlarge their entitlement attitudes.

Add to this great article, our sniveling snot child of a President who only responds to other Wall Street infants.

Amen! The Federal Government has become the "Great Enabler" of the spoiled rich in our country. If you are born to wealth and privilege, the government will bai you out when your profits are threatened. If you are middle or lower economic class, then the government suddenly becomes the beacon of "free market forces" and "personal accountability." It is clearly true that in America the only "invisible hand" at work in our economy is NOT that of Adam Smith's free markets, but the one hidden in the pockets of corrupt political and big business leaders' pockets. It is time for radical change to occur to restore fairness to this system.

This is a great article; both the fed and wall street should take heed and learn from it.

Tight on target - as usual, they mess up, we pay, they get golden parachutes, we get shafted.

right on target - we have the most arrogant, self indulgent, self worshipping ceo's and financial people ion the world. A pox on all of them for what they have done to this country....

Spot on. Fantastic article.

Spot On. You are absolutely right about your convictions. Those of us who didn't make these mistakes should not be paying for them with our tax dollars. Tax dollars ironically I will not get back in the stimulus package because I make too much money. How is that for irony.