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Paul B. Farrell Archives | Email alerts
March 13, 2012, 12:01 a.m. EDT
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By Paul B. Farrell, MarketWatch
SAN LUIS OBISPO, Calif. (MarketWatch) "” Yes, Wall Street will crash. Has to. They're gambling addicts. Dodged the bullet in 2008. But learned nothing. Now killing reforms. Teamed up with the Super Rich, CEOs, lobbyists, and crony politicians. It's only a matter of time.
Yes, they'll crash, again. No matter how anemic the recovery. No matter how much more debt they pile on taxpayers. No matter who's president. Crash.
How do I know Wall Street will hit bottom? First off, most American know somebody who's trapped in addictive behavior. I got a front-row seat years ago as a professional helping a few hundred addicts, alcoholics and gamblers getting help from the Betty Ford Center and others like it.
Guess what: Wall Street's behavior is exactly like all other addicts, trapped in denial, they'll risk destroying family, friends, health, careers and even America before stopping. They're obsessed, hooked, blind, addicted to gambling.
Second, the Treasury secretary and his wife warned us. Seriously, Tim Geithner highlighted her in a recent Wall Street Journal op-ed, "Financial Crisis Amnesia," that made clear how addictive and clueless Wall Street and their team are: "My wife looks up from the newspaper with bewilderment at another story about people in the financial world or their lobbyists complaining about Wall Street reform."
Yes, amnesia. Wall Street's got a bad case of denial, blind to "the lessons of the crisis and the damage it caused to millions of Americans." So it'll happen again. And soon. Why? Mr. Secretary's diagnosis: "Amnesia is what causes financial crises." Look closely.
Yes, Wall Street insiders need treatment. They're like addicts who will resist treatment till the bitter end, insisting there's no problem, protecting their business as usual high-life. Their addiction has control of them, they're in denial, in amnesia, blind to the long-term damage they're doing to America.
So yes, Wall Street must crash, will hit bottom. America cannot reset the economy because Wall Street won't go willingly. So here, you do the full diagnosis. Here are 10 characteristics of this self-destructive addictive personality type. Think about what is happening on Wall Street today, stuff like their war against the Volcker Rule. See why Wall Street's collective mental state is so damaged it's on track to hit bottom, crash and burn, in a meltdown more damaging than 2008, as they take down the rest of America.
Don't believe me? Check out Wall Street's 10 personality traits today:
Begin with Geithner diagnosis Wall Street's addiction: Banks have "no memory of extreme crisis, no memory of what can happen when a nation allows huge amounts of risk to build up outside of the safeguards all economies require." Amnesia makes Wall Street deaf. Can't hear. Remember, bank insiders are short-term thinkers who naturally discount long-term costs to zero, pass them on to taxpayers and future generations.
Since the dot-com crash of 2000, when the Dow peaked at 11,722, to today with the market hovering around 13,000, Wall Street's lost an inflation-adjusted return of about 20% of your retirement money. And economist Gary Shilling sees no growth through the next decade ... Nouriel Roubini warns of a decade of dark days ... Pimco's Bill Gross sees a long "new normal" of lower returns "¦ GMO's Jeremy Grantham predicts "Seven Lean Years" "¦ Martin Weiss warns that a "historic world-changing event is about to crush the U.S. economy and stock market." Still, Wall Street lives in a fantasy land, ignores warning signs, pushing mega-IPOs, risky junk. Protect yourself.
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Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The... Expand
Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The Millionaire Code," "The Winning Portfolio," "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology. Collapse
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