What Business Is Wall Street In?

[girl gone mad]

I dislike Mr. Cuban for personal reasons, but he wrote a fairly solid piece here..

What Business Is Wall Street In?
Mark Cuban

(snip)

The only people who know what business Wall Street is in are the traders. They know what business Wall Street is in better than everyone else. To traders, whether day traders or high frequency or somewhere in between, Wall Street has nothing to do with creating capital for businesses, its original goal. Wall Street is a platform. It’s a platform to be exploited by every technological and intellectual means possible.

The best analogy for traders? They are hackers. Just as hackers search for and exploit operating system and application shortcomings, traders do the same thing. A hacker wants to jump in front of your shopping cart and grab your credit card and then sell it. A high frequency trader wants to jump in front of your trade and then sell that stock to you. A hacker will tell you that they are serving a purpose by identifying the weak links in your system. A trader will tell you they deserve the pennies they are making on the trade because they provide liquidity to the market.

I recognize that one is illegal, the other is not. That isn’t the important issue.

The important issue is recognizing that Wall Street is no longer what it was designed to be. Wall Street was designed to be a market to which companies provide securities (stocks/bonds), from which they received capital that would help them start/grow/sell businesses. Investors made their money by recognizing value where others did not, or by simply committing to a company and growing with it as a shareholder, receiving dividends or appreciation in their holdings. What percentage of the market is driven by investors these days ?

I started actively trading stocks in 1992. I traded a lot. Over the years I’ve written quite a bit about the market. I have always thought I had a good handle on the market. Until recently.

Over just the past 3 years, the market has changed. It is getting increasingly difficult to just invest in companies you believe in. Discussion in the market place is not about the performance of specific companies and their returns. Discussion is about macro issues that impact all stocks. And those macro issues impact automated trading decisions, which impact any and every stock that is part of any and every index or ETF. Combine that with the leverage of derivatives tracking companies, indexes and other packages or the leveraged ETFs, and individual stocks become pawns in a much bigger game than I feel increasingly less comfortable playing. It is a game fraught with ever increasing risk.

Read more: http://www.businessinsider.com/what-business-is-wall-street-in-2010-5#ixzz0nZTm05WL

[JuniperLea]

1. Gambling is the business...

Don't ever let them tell you differently... it's a crap shoot unless you are in on the take.

[fasttense]

9. But a specific task in the gambling industry - book making. n/t

[PM Martin]

2. As long as they can buy of politicians,

they will get away with more and more and more and more and more...........

[truedelphi]

7. K & R. That is the key point.

We have as a consumer state, been totally sold out.

The banks have many many quasi legal tactics to insert unnecessary fees between a consumer and their bank account.

We are told that our debit cards are the "same as cash" but that is not true (When your balance at the bank is below one hundred or one hundred fifty bucks, and you buy gas here in Calif, your debit card has a quick and nasty seventy dollar "hold" placed on your funds. How could you ever end up in that predicament with cash? You couldn't. And since you don't necessarily even know about that hold, you can end up bouncing checks that would have cleared!!! At over thirty bucks a pop!

Now Wall Street is nothing but an insider con game with gambling as its main activity. And people have their retirement funds held in stocks traded in this casino, without even realizing that this is where their retirement and future security and well being now lies.

[dotymed]

12. Check this out

This is a report about a hedgefund called the "wolf pack" that is currently destroying Greece. Their next target (they have admitted) is Europe. They said they plan to "end up" in California.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x464274

This is unregulated wallstreet/ unregulated capitalism. Notice in this video, the "wolfpack" paid itself an amount equal to the debt of Greece, last month. This is all about destroying the world economy for a huge payday. It is LEGAL for them to force us all into serfdom to the elites, while they profit. They should be in prison. Instead they are the "Titans of Industry." Fuck this, We need to take to the streets just like the people of Greece until this shit is stopped.

[Po_d Mainiac]

3. When insiders start bitching you know the house/dealer never loses n/t

[bemildred]

4. Same business as your state Lotto.

Different odds, different rules, same business. The computer trading guys don't even rise to that level, they are just gaming the system to skim whatever they can get, looking for flaws and weaknesses to exploit.

[Art_from_Ark]

10. State lottos are designed to provide for the public good

and make it more palatable to pay "taxes", with a promise of a payoff to a lucky winner. Although players should recognize that their chances of winning are next to nothing, and many if not most do, there are some who truly believe that they will win the jackpot. Wall Street, on the other hand, is becoming increasingly a Las Vegas casino where the house always wins, but all the players are still confident that they will come out winners.

[bemildred]

13. Right. The public good.

I can go along with the reservation casinos, native americans deserve anything they can get, but the notion that catering to a disastrous public appetite for lottos serves the public good is too funny for words. Like taking food from the mouths of children serves the public interest. If our lawmakers gave a shit about public schools they would raise taxes sufficient to fund them properly.

[Art_from_Ark]

14. Do you you solid evidence that state lottos take food out of babies' mouths?

Or is it a gut feeling? Would the lotto ticket buyer just use that money for booze or cigarettes instead, if the lotto did not exist? Personally, I would rather see lotto take up the revenue slack, rather than raising property taxes on little old ladies, or raising state sales taxes from, say, 7% to 10%

[AdHocSolver]

5. Ponzi schemes, fraud, corruption, and large-scale theft.

That is the main business of wall Street.

[flyarm]

6. Leading us into fascism and fucking us everyway they can???????

and drinking Martini's on their very expensive Yachts and laughing at us????????

[truedelphi]

8. i am very impressed with this piece. Note that Cuban doesn't just rant

And rave -- he even posits definite solutions.

Get this -
My 2 cents is that it is important for this country to push Wall Street back to the business of creating capital for business. Whether its through a use of taxes on trades, or changing the capital gains tax structure so that there is no capital gains tax on any shares of stock (private or public company) held for 5 years or more, and no tax on dividends paid to shareholders who have held stock in the company for more than 5 years.

However we need to do it, we need to get the smart money on Wall Street back to thinking about ways to use their capital to help start and grow companies. That is what will create jobs. That is where we will find the next big thing that will accelerate the world economy. It won’t come from traders trying to hack the financial system for a few pennies per trade.

That is sound thinking, right there.

[Scuba]

11. Agreed. If our markets can't be trusted, who will invest?

please see my related post... http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x78672