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The Unbelievably Rampant Corruption On Wall Street

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In order for a financial system to be able to function properly, it is absolutely essential that the general population has faith in it.  After all, who is going to want to invest in the stock market or entrust their money to big financial institutions if there is not at least the perception of honesty and fairness in the financial marketplace?  For decades, the American people did have faith in Wall Street.  But now that faith is being shattered by a string of recent revelations.  It seems as though the rampant corruption on Wall Street is seeping up almost everywhere now.  In fact, some of the things that have come out recently have been absolutely jaw-dropping.  The truth is that the corruption on Wall Street is much deeper and much more systemic than most of us ever dared to imagine.  As the general public digests these recent scandals, it is going to result in a tremendous loss of faith in the U.S. financial system.  Once faith in a financial system is lost, it can take years or even decades to get back.  So how is the U.S. financial system supposed to work properly when large numbers of people simply do not believe in it anymore?

Just consider some of the recent revelations of Wall Street corruption that have come out recently….

*Bloomberg is reporting that a massive network of big banks and financial institutions have been involved in blatant bid-rigging fraud that cost taxpayers across the U.S. billions of dollars.  The U.S. Justice Department is charging that financial advisers to municipalities colluded with Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers, Wachovia and 11 other banks in a conspiracy to rig bids on municipal financial instruments.  Apparently what was going on was that it was decided in advance who would win the auctions of guaranteed investment contracts, which public entities purchase with the proceeds from municipal bond sales, and then other intentionally losing bids were submitted in order to make the process look competitive.  The U.S. Justice Department claims that this fraud has been industry-wide and has been going on for years.  In fact, at least four financial professionals have already pleaded guilty in this case.

*An industry insider has come forward with “smoking gun” evidence that some of the biggest banks have been openly and blatantly manipulating the price of gold and silver.  For a time it looked like the federal government was just going to ignore all of this fraud, but after substantial public uproar some action is indeed being taken.  In fact, it has been reported that federal agents have launched parallel criminal and civil probes of JPMorgan Chase and its trading activity in the precious metals markets.

*Goldman Sachs is getting most of the press about fraud in the mortgage-backed securities market these days.  Of course Goldman is strenuously denying that it “bet against its clients” when it changed its position in the housing market in 2007.  But we all know the truth at this point.  The truth is that Goldman Sachs clearly bet against its clients and was involved in a whole lot of things that were even worse than that.  Many did not think the U.S. government would dare go after Goldman, but that is what we are starting to see.  U.S. federal prosecutors have opened a criminal investigation into whether Goldman Sachs or its employees committed securities fraud in connection with its trading of mortgage-backed securities, and it will be very interesting to see if anything comes of that investigation.

*But not everyone is being held accountable for their actions.  The guy who helped bring down AIG is going to get off scott-free and is going to be able to keep the millions in profits that he made in the process.

*Entire U.S. cities have been victims of this rampant Wall Street fraud.  In fact, it is now being alleged that the biggest banks on Wall Street are ripping off some of the largest American cities with the same kind of predatory deals that brought down the financial system in Greece.

*The really sad thing is that fraud is very, very lucrative.  Executives at many of the big banks that received large amounts of money during the Wall Street bailouts are being lavished with record bonuses as millions of other average Americans continue to suffer economically.  Even the CEOs of bailed-out regional banks are getting big raises.  It must be really nice to be them.

So does all of this make you more likely or less likely to invest in the stock market?

Do you think that the American people can see all of this and still believe that the financial system is “fair” and “honest”?

The truth is that Wall Street is full of rip-off artists and fraudsters who don’t even try to hide their greed anymore.

It is as if a thousand junior Gordon Gekkos have been unleashed and they are all trying to be masters of the universe at any cost.

But what they are doing is ripping the heart out of the U.S. financial system.

If people lose faith in the system the system will ultimately fail.

A financial system that allows open fraud and manipulation is operating on borrowed time.

So will the rampant corruption on Wall Street now be cleaned up?

Only time will tell.

But one thing is for certain.

The American people will be watching.



  • Brittany Shelley

    It was bad to trash the foreclosed home and go crazy at work but can you really judge these people? None of us know how we are going take becoming homeless.

  • bgreen

    some unasked questions

    how are small and medium businesses (the job creators) to raise capital now that lending incentives keep money in an incestuous spiral between the Fed, Treasury and wall st? notice the decline in retail and institutional participation on the markets.

    is wall st (and other financial centers) more corrupt now, if so are biz schools implicated in their filtering and teaching system?

    when will our need for incompetent celebrities to lead companies (and other institutions) mature into a realization that great managers neither need nor demand 500x the average workers pay? teams work better.

  • Andy waters

    Well, lets see…. Our sec. of the tresury is a tax cheat and our Pres is a son of Kenya….. don’t count on anything but a phony show when it comes to cleaning up this mess. You know it’s really sad, when Clinton defiled the oval office they said it didn’t matter. They said character didn’t matter. Well folks we are about to realise character matters an awful lot. A free society only works with a moral people.The only thing that will bring real reform is total collapse, and it is coming , like it or not.

  • kolchack

    @ – Do you think that the American people can see all of this and still believe that the financial system is “fair” and “honest”?

    Sadly, I know a number of people who still have their retirement money fully invested in the stock market despite the fact that it should be obvious by now that the whole thing is a scam. Even when I’ve suggested that since they have earned back much of what they lost in the crash of ’08 and now would be a good time to flee to safety, the advice has fallen on deaf ears.

    “The American Hologram” of the American mainstream media, as author Joe Bageant calls it, is a very power propaganda tool for the elites and they use it very well.

  • Matt

    Jefferson was right.

  • sharonsj

    I’ve read that Goldman Sachs and others have, for the last four months, made money on every day of trading. That’s right, not a single loss. Isn’t that what Bernie Madoff claimed too? It doesn’t take a genius to know something is wrong but the question is why our government isn’t doing a thing about it?

  • Lisa

    I’ve been reading your blog and I think what you are doing is awesome! I am just a middle class person working for $75,000/year and putting 20% of paycheck in my 401k (like the governemnt has all trained us to do). If Wall Street is corrupt, where are we supposed to put our money? I’ve started to invest in real estate and believe that it might be the safest place. I’ve also heard silver and gold can be safe? should we all start putting our money in gold and silver? I don’t understand all this investing mumbo-jumbo, probably like the majority of americans. That’s why Wall Street can take advantage of unsuspecting americans. It’s awful. How can we fight this? Where can we put our money so those greedy bastards can’t get it?

    • Michael

      Thank you for visiting the blog Lisa!

      It is really hard to know where to put your money these days. One thing you may want to think about is to make sure you have enough food and supplies for when economic times get really hard. In addition, you want to be sure to get out of debt as much as possible.

      As far as investments go, that is tough. There is no place that is truly 100 percent “secure” these days.

  • Brittany Shelley

    Michael when do you think the next depression will happen? I plan to graduate by 2014 and move to Australia.

    • Michael


      Anyone who tells you that they can predict exactly when the next economic crash is coming is not being entirely honest.

      We can all see it coming, but there are a number of ways that it can play out.

      There are a lot of moving parts, but the truth is that it all will come crashing down at some point.

      Right now I think that we will be entering a period when there will be a significant global economic slow down over the next two years. Once all of these “austerity measures” start kicking in around the globe it is going to create quite a bit of deflationary pressure.

      Eventually the temptation for governments around the world to print their way out of this mess will become too great and that is when we could see substantial inflation start to kick in. When exactly that will be is hard to say.

      So what should your plans for 2014 be?

      I would say that you should be very, very flexible. The world economic situation will likely look a lot different at that point than it does today.

  • Rudy A

    Add to this that the regulators actually “cancelled” some of the trades from the 1000 point market drop. They said some of these trades were “mistakes”. Hey, I made a “mistake” recently when I bought a stock, does that mean I can get my trade cancelled? The corporate media has not even picked up on this HUGE issue.

  • Save the Republic

    This is the best idea I can come up with: Everybody take your money out of these markets. Then these companies won’t have any “suckers” to prey on for more profits, and they’ll only be able to feed on themselves, which will give them no net gain. Use the money to pay off debts, then invest in tangible assets (things that have REAL value), not speculative pieces of paper. Don’t use these “investments” for retirement either, because the elite will arrange for values to drop, and the coming inflation will ensure that the money that you get back will hardly be worth more than you put in, if even that much.

  • The world elite are on a Mission and its not Pro Capitalism .

    You have to gain control over the principles of life through religion in order to install population control ;

    watch this video pay attention to what he says about curbing population growth ;

    The past Presidents have been tickling this issue for decades But the pressure to do something has now become a worldwide fervor ;

    The ideologues that are trying to cram Marxism legislation down the throats of Free People are doing so because they believe the world has reached its carrying capacity in terms of human numbers , and are now embarking on a plan that will restrict overall use of resources and slowly reverse the number of born through Planned parenthood and other methods , and by restricting the usage of medicines on the end of life . The czars that are advising the President are experts in these fields and have wrote tons of materials on these methods for decades .
    this is our top cereal grains breeder read what he says in the paragraph down towards the bottom of this page , and look at the grain yield charts , and also read the reversal on unsustainable population growth Norman Borlaug is said to have , but in the middle of this reading there is a statement by the current advisory team advising our President like John Holdren and his Co author Paul R. Ehrlich who are quoted here as saying , ” The effort to continue to feed the world is over ! “

    read these sites the same people in these site are who is advising our President today , they have been planning this time for years ……

    fits into the plan of the population reduction

    Population control called key to deal , I think this is why we saw the health care bill target elderly folks with restrictions on treatment with Medicare cuts .

  • Think about the changes in the ” NEW ” Financial Regulations Bill making its way through Congress and what the 1300 page Document might have in it that is designed to Dismantle Capitalism as is whats said here in this website about Capitalism ???

    These are the same experts that are advising the President on international efforts to bring about a One World Order ……Read the story here and tell me that we are not seeing a One world order trying to evolve for the sake of what some think is a world carrying capacity thats reached its limit – read what is said on this site and tell the Investor that the Plan is Pro Capitalism …. The Investment Brokerage Firms need to be truthful to their Investors and tell them what the Plan is For Free markets and capitalism !!!!!!!!!!!

    The “goal” of our society should be to make our citizens healthy and happy while using as few natural resources as possible (especially energy). The methods needed to attain this goal can be determined by teams of medical doctors, scientists and engineers. Capitalism should be dismantled as gracefully as possible and any natural resources that are not required health and happiness, should left to nature.

    With modern technology, probably less than 5% of the population could produce all the goods we really “need.” A certain number of qualified “producers” could be selected by a peer group to produce for five years. The rest can stay home and sleep, sing, dance, paint, read, write, pray, play, do minor repairs, work in the garden, and practice birth control.

    There is so much we are not being told about whats going on with Economic transformation ; read this site , under the Title ” Global Situation ” link on the website page between the Titles ” Preamble ” and , ” The Way Forward ” ,
    in this they talk about a Predictions coming from the physical sciences foresee disturbances in the geomagnetic, electromagnetic and related fields that embed the planet causing significant damage to telecommunications and impacting many aspects of human activity and health.

    Ervin Laszlo and David Woolfson
    for the Club of Budapest

    and then check the quotes out at this site , scroll down and see what Ted Turner has to say …..

    these 2 links are promotions of Marxism , which the Green Revolution is based around as is laid out here ; pay attention to the words Karl Marx and how they try to blend it with Capitalism ….

  • The Governments of the world are just printing their own operating money while the transform the economies into one world fashion to deal with what they see as a worldwide problem , over population .
    Bill Gates spells it out here , people are the largest contributor of CO-2 , the progressives biggest fear of contributing to climate change .

  • This might be a good change in state banking to compete with the Too Big To Fail Banking Institutes ?

  • sharonsj

    Some of the other financial sites are talking about how the stock market is controlled by computerized high-speed trading. The average length of time a stock is held before traded is 11 seconds. These people are only concerned with making immediate money They do not care about anything, especially the average citizen or even this country.

    The financial reform bill doesn’t do much of anything, so it’s business as usual. Unless the population rises up and forces the politicians and big business to change, I have no hope things will improve.

  • Belle

    The banks have been caught colluding and bid rigging the same way the insurance companies were. The insurers are frauds. The banks are frauds, and the not-Federal Reserve is the biggest fraud of all. All the faux reform gave them is more power. More power, more money and more enabling non-regulating regulators to operate like a farm system for the big leagues. The folks cashing the checks in Washington are going to be the last people in the country to wake up to the organized crime destroying our country. Their hair should be on fire, but they’re too busy pretending more corrupt legislation will fix the problem.

  • j r

    I read today that more people are contributing to their 401K with most of the money going to stocks. How stupid can these people be?

  • They are all great vampire squids, to paraphrase Matt Taibbi in his Goldman expose.

  • Jan Hoppe

    I never believed that communists were right about how rotten is capitalism.
    But it looks that they were right.
    Add to that corruption moving jobs to China and alike, forcing American consumer to buy dangerous products made in such a countries.
    This looks like a slowly working concentration camp.

    • Gargoyle

      Nothing wrong with capitalism. We have corporatism now. That is where we have been sold out. Off shore jobs, production and all the visas for places like Microsoft. They have no morals at all. Go visit Seattle and tell me who gets all the jobs for Microsoft. Or mostly.

  • angryinadk

    You forgot to mention the worst investment scam of all, high frequency trading. the investor does not have a chance.

  • Jon

    INVEST IN DEPENDS DIAPERS! Wall Street is going to need all the Depends they can get their hands on in the coming years.

  • WS

    Excellent commentary. I would like to add, however, that while there may be “investigations” into illegal and corrupt banking and government behavior, the fact is 99.99% of the time these so-called “investigations” are nothing more than the same old corrupt behavior witnessed by the perpetrators. In other words, most of the so-called investigations are nothing more than “dog and pony” shows to give the public the impression that the regulators are doing their job in order to restore public confidence. The reality is these investigations are run by the same criminals that took part in the fraud. The SEC is one of the most corrupt government organizations in the world; they will NEVER prosecute large banks or government organizations that participate in the daily fleecing of the public. The fact is, the SEC justifies their lack of prosecution by believing that it is in the publics interest not bring down these criminals. Moreover, most of crimes that are committed daily against the public benefit the large banking oligarch and government to the extent that if they were exposed and/or prosecuted, the government feels it would be harmed. In fact, it would be harmed as 1000’s of corrupt government officials would have to resign and/or face prison time. These bureaucrats will do everything necessary to preserve themselves, even if it means continuuing the fraud and protection of private corruption and fraud.

    I could go on and on, but the takeaway is don’t get excited when you hear the government going after corruption—-in virtually all cases these public relations announcements are nothing more than the deceiving the public into believing that the corruption is being addressed—-it is not and will not.

    The only way to “fix” the system is to allow it to collapse, and that is not going to happen. Instead, it will continue to be pasted over with more fraud and corruption.

  • All of this corruption going on with wall street still leaves me in a neutral feeling with investing in the stock market. Because corruption generates bear markets, and more money can be made during bear markets.

    Of course, just being an everyday conservative investor, it’s imperative that I don’t gamble the way these huge institutions go about naked shorting things in the market. That’s gambling. and I don’t like to gamble.

    I’ve hedged myself against potential crashes, and my portfolio is decentralized enough to not get reamed in the event that someone blows Wall Street’s corruption out of the water. And they should, too.

  • Henry

    goldman sachs annual report shows that 79% of its profits come from betting and gambling on the markets — ooops, sorry, trading on its own account and being “entrepreneurial”. Only 21% of its profits come from traditional investment banking fees. Yet the treasury and the fed gave billions of $ to bail out a company that is basically playing for itself and whose greed got it in deep doo-doo.

  • zorbaka

    some of the problem with financial firms and corporations in general is this. One person for instance will be on the board of directors of not one company but of several companies. these people serve to rubber stam large bonuses for ceos and other executives in return for a bonus of their own. They exchange favors by being on each others boards. Mitt Romney’s wife is on the board of directors of several corporations.

  • zorbaka

    many, many people know what the problem is but no one is able to fix or change the situation because it is so entrenched. It will take years to change if at all. If not fixed we are headed for a government run by wealthy autocrats. they will continue to improve robots until they can replace us down here at the lower income levels.

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