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Brett Arends' ROI
Dec. 21, 2010, 12:01 a.m. EST
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Biggest bankruptcies weren't on Wall St.
First Take "º
Hijacking Chesapeake?
By Brett Arends, MarketWatch
BOSTON (MarketWatch) "” This was the year America finally took on the power and greed of the Wall Street banks.
And the banks won.
They dodged the bullet of real reform, probably for all time. They bounced back to post huge profits, helped by legal theft from the middle class. They completed their takeover of both political parties "” and bought themselves a new Congress even more pliable than the old one.
Middle-class America is flattened, devastated and broke. The bankers that caused it all have escaped punishment. They're raking in huge profits. Oh, and the tax cuts just got extended for high earners, too!
Our panel of star Wall Street strategists expects stocks to rise at least 10% next year, as a U.S. economic recovery accelerates.
Game over.
Of all the signs of Wall Street's gloating and arrogance this year, which one stands out the most?
The image of the president of the republic, traveling to New York to reassure them that they wouldn't suffer too much from new regulations?
Or maybe billionaire Steve Schwarzman, the private-equity oligarch at Blackstone Group /quotes/comstock/13*!bx/quotes/nls/bx (BX 13.56, +0.10, +0.74%) , complaining that any attempt to make him pay actual income tax on his income was akin to "when Hitler invaded Poland."
Not France. Not Belgium. Poland.
In the aftermath, he grudgingly issued a partial retraction.
In any civilized society he would now be pariah. He'd have to eat alone at unfashionable restaurants, and the waiters would spit in his soup.
Instead, as the year drew to a close, I saw him being interviewed on TV, the hosts hanging on his every word.
In 2010, Wall Street's year, Schwarzman's only real sin was getting caught flaunting his contempt for the nation.
Far worse went on behind closed doors.
Consider the Dodd-Frank reform act "” all 2,300 pages of it. Sure, it fills in a few regulatory gaps, ends a couple of the more gratuitous abuses. You have to throw a few scraps to the masses.
But most of the reforms are meaningless. New rule books and committees. Bah. They're like half-built fences. Anyone can just walk around them.
As for the new consumer finance watchdog? The agency that's supposed to stand up to the banks will be housed"¦ within the Federal Reserve. Literally, it will be a tenant of the banking system.
Champions of the "reforms" say this won't really matter. But if that's the case, why did Wall Street fight so hard to make sure it happened?
There are no coincidences in Washington.
Brett Arends is an award-winning financial columnist with many years experience writing about markets, economics and personal finance in Europe and the U.S. He has received an individual award from the Society of American Business Editors and Writers for his financial writing, and was part of the Boston Herald team that won two others. He was educated at Cambridge and Oxford Universities, and has worked as an analyst at McKinsey & Co. He is a Chartered Financial Consultant (ChFC) and Accredited Asset Management Specialist (AAMS). His latest book, "Storm Proof Your Money," has just been published by John Wiley & Co.
Activist shareholder Carl Icahn buys a new energy project.
3:51 p.m. Dec. 20, 2010
"Wall Street wins, Main Street pays "” again http://on.mktw.net/ianWdp" 12:53 a.m. EST, Dec. 21, 2010 from MKTWArends
"Biggest bankruptcies weren't on Wall St. http://on.mktw.net/fL1hty" 12:32 a.m. EST, Dec. 14, 2010 from MKTWArends
"The truth about California http://on.mktw.net/hXkvEL" 5:31 p.m. EST, Nov. 22, 2010 from MKTWArends
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