Derivatives – the new dimension of the reality


From Greece to Britain and the USA – trillions in bailouts disappear into the black holes of the overspending government bureaucracies and irresponsible corporations. It is amazing that the stock markets are still functioning. May be it is because the Wall Street stopped reflecting the reality long time ago. Instead the market invented the new dimension of reality – the derivatives of all kind.

Wall Street is trading crap – the derivative markets are like trading shares for vacations on asteroids, because Obama said he has a plan to go there, when the economy recovers and he gets revenues from future cap-and-trade and sales taxes. What if the economy does not recover soon and new taxes are not imposed and we don’t step on asteroid and there is no hotel there. You just don’t understand, they say, it is about taking risk. We thought you go to Vegas to do that.

It is against the common sense – Greece is sinking today like it was sinking yesterday (I don’t mean global warming sinking, but economically collapsing), but the markets are happily jumping because the bailout is coming. Don’t worry – you just have to wait, it looks bad today, but it is a great deal in the future. Ah, the future-watchers-in-chief!

It is like parents telling a kid: “Don’t worry; everything will be alright!” (the ultimate derivatives slogan), while maxing out their credit card because they hope their unemployment will be over soon. Only year later they still don’t have income and they are losing the house.

Wall Street is turning into some kind of Matrix where computers trade stock – real and derivatives. When Lehman Brothers collapsed the simple folks on the street realized there is no Lehman brother that was losing money. There was no old fashion banker jumping from the top of the Empire State Building in disgrace. There was a CEO with golden parachute made of millions of dollars.

Wall Street is turning into communism enterprise. There is no Goldman and there is no Sachs. There is an elite class of executives spending other people’s money. Even worst! We are at the point where the US government is picking the CEOs who will be spending other people’s money. The bigger the corporation the more the voice of the individual shareholder is diluted. The small shareholders have about the same power in Goldman Sachs as the individual voters in presidential elections.

It was the romantic time when Rockefeller and Carnegie competed (and there was really a person named J.P.Morgan); when Bill Gates owned Microsoft. Today when the Trump Taj Mahal is bankrupt Donald Trump gives press conference and explains that it is not even his casino.

Shareholders take the personal responsibility and the CEO of the failed enterprises get seven digit bonuses.

The spirit of America is saved in the small business owner, who has his family existence and future on the line.

Government too big and business too big just give elected politicians and board members too much power over other people’s money. Bureaucrats and CEOs become greedy and suck more and more resources until they get to the point where they destroy their hosts: the tax-payers and the shareholders.

To the Wall Street fat cats: guessing the future is fun, but ignoring the reality is suicidal.

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