Confirmation that a “rogue” trader somehow lost $2 billion making “unauthorized” trades at UBS “will test the faith of investors, clients and regulators,” says Wall Street Journal. It should also test the credulity of anyone who would still argue that traders and investment bankers are fundamentally different from degenerate blackjack players with a lot of money to lose.
Matt Taibbi gets to the heart of the matter:
… The reality is, the brains of investment bankers by nature are not wired for “client-based” thinking. This is the reason why the Glass-Steagall Act, which kept investment banks and commercial banks separate, was originally passed back in 1933: it just defies common sense to have professional gamblers in charge of stewarding commercial bank accounts.
Glass-Steagall was scuttled in 1998 with the help of corrupt hustlers in high places, including Phil Gramm, Robert Rubin, Larry Summers, Alan Greenspan and yes, Bill Clinton, who probably bears as much responsibility for our current financial mess as any Republican hustler you can name. As Taibbi notes:
… We now have a situation where trillions in federally-insured commercial bank deposits have been wedded at the end of a shotgun to… career investment bankers from places like Salomon Brothers (now part of Citi), Merrill Lynch (Bank of America), Bear Stearns (Chase), and so on. These marriages have been a disaster. The influx of i-banking types into the once-boring worlds of commercial bank accounts, home mortgages, and consumer credit has helped turn every part of the financial universe into a casino.
Here’s the sad truth about the casino analogy: Casino degenerates can gamble away their own money, or their families’. The degenerates at the investment banking arms of commercial banks can gamble away your money, and that of thousands of other people.