Friday, November 13, 2009

Oligarchs Defend Retail Banking & Trading Territory

British professor John Kay commented on financial oligarchs defending their multi-headed hydra. Bloomberg reported:

Investment bankers are wielding their political influence to override popular support for legislation to break up lenders’ trading and retail operations, economist John Kay said.

“I’m struck actually when I talk to an audience like this, or indeed to people in the City who are not investment bankers, how much support for breaking up the banks there is,” said Kay, who was speaking after a debate in London.

“There’s something unreal about where we are at the moment,” Kay said

While he spoke of the London financial houses, his words apply to Wall Street. There is no reason for taxpayers to backstop Goldman Sachs' trading floor. Firms that want to play high risk games should do so outside America's banking structure.

Indications are Congress will throw a life preserver around the financial system, effectively protecting today's oligarchs. Goldman Sachs and $5 billion investor Warren Buffet have the connections to keep regulatory wolves at bay.

The latest wrinkle is "blind pools", led by ex-banking CEO's. They want to scoop up bad banks. Did any ex-CEO's lead us down the dark path, using their incentive pay flashlight?

Guess who's backing "blind pools.?"Goldman Sachs, JP Morgan, etc. It's unreal, a veritable fractal of oligarchy.