There are no doubt a million different stories of why these people are engaged in the protests but it would not surprise me if many of the stories sound like this one from the WSJ;
"From 2006-2009 I owned a business with 12 employees," reads one, superimposed over a photo of a man and his young son, both smiling. "I closed my doors in 2009. I lost my home in 2010. I lived in my truck for six months. Now I rent a tiny room. I have no health insurance."
The last ten years have adversely affected many people, this is not news. There has been a lot of hard luck stories that have occurred (seems like more than normal) combined with events (failures) that we have not experienced before. Against that backdrop, the idea of asking some questions about what we believe is reasonable.
This is not to support their "Declaration" as there are things that would seem to not apply to Wall Street, the general leaning is much further to the left than where I land on just about any issue and I have also not been adversely affected by the financial crisis. As a quick timeout I am acutely aware of how lucky I am that the biggest hassle in my life is that my Saturday at the fire station where I volunteer was too long.
There is no way to know how many that have been disaffected were so because of their own actions or because they were somehow duped although human nature being what it is we can be sure that many people blame others. If my opinions about the economic fundamentals in the US and prospects for US market returns turn out to be anywhere close to correct then the group that perceives themselves as being disaffected will increase.
Josh Brown pointed out that the "protesters are winning." Some of the bigger financial stocks are down a lot since the protests started. Obviously they have generally been going down for years now but that does not change the fact that they are down a lot since the protest started.
Is there a social consciousness awakening because of the last ten years with Occupy Wall Street simply being the latest manifestation? If so, what are the ramifications for the rest of society? Will other demographic segments take to the streets, metaphorically or otherwise, to protest the unfair treatment they have endured?
I tend to believe that asking difficult questions is productive as is exploring other ideologies as a means for reaffirming your beliefs or as a catalyst to do things differently.
My own way of thinking might seem a little harsh but no one cares more about your own welfare than you do. Personally I have taken a couple of financial risks over the years with no expectation of a safety net provided by someone else.
When I was in college I had what I thought was a pretty sweet bicycle. I rode it to do an errand one day and it got stolen. Man, was I pissed off because it was my own fault. I was at a small store and thought it would be safe and I was wrong. A couple of days later I told my mother about it and she offered to pay for a replacement. This was my fault so I said no. Being brutally honest, the way I was raised, I should have taken the money for the bike, and while I do not know where this came from, the idea of taking the money was unacceptable. Family helped out with things when I was younger, but with something that was so clearly my screw up; I wouldn't have it.
While that was a long personal anecdote it sums up my belief that generally (there are always exceptions at both ends) we are accountable for our successes and failures which entitles us to enjoy the rewards or suffer the consequences. Trying to project one set of beliefs onto a group of people with a different set of beliefs tends to be useless as opposed to letting people draw their own conclusions. If we concede all the injustices cited by Occupy Wall Street (not my base case), there is not enough money to giveaway to fix it all--they would like all debt to be forgiven.
Sorry, I have no answers for society, only answers for myself.
37 comments:
I have yet to her a cogent statement out of any of our local, Los Angeles, "Occupy Wall Street" protestors. For the most part they seem to be the usual anti-capitalist anarchist riffraff. The only difference is they are sleeping in tents, and it's not the usual one day Socialist/big labor "May Day" parade.
You hit it on the head: PERSONAL RESPONSIBILITY.
Utterly lacking. Worse, those without these skills want to be calling the shots for the rest of us. Dictating, if you will.
I wonder when we're going to see the anti-semetic element rear it's ugly head. I am a practicing Roman Catholic and have had many a test of wits recently with religious who blame Wall Street, banks and, yes, Isreal for the world ills. If otherwise decent people express this view, are we not closer to turning this into a sinister racial conflict?
T
$5/month ATM fees, HFT, nano quotes, massive bonuses - all taken out of context obviously produces pretty harsh opinions when the spector of a national news camera is pointed at an unemployed, angry, intelligent person.
Max, if there is a consciousness awakening then I might expect it to evolve slowly.
Paul and T one element to tie both comments together is that I think what they are saying relates to the most basic fears of health, hunger and shelter. If so then it could grow in some direction including the ones you two mention.
There seems to be a symbiotic relationship between Obama's constant class warfare campaign mantra and the Occupy Wall Street protestors. Even Mayor Bloomberg picked up on this theme last week in his expressed fear of possible social and economic riots in the USA. Obama may end up reaping his own whirlwind.
T personal resposibility comment applies to both sides. Similarly justice should also apply equally to both sides. Minor offenses carry major penalties while billions in money siphoning and much white collar crime is treated by looking the other way. Unless there is equality there will continue to be deterioration of Democracy. "In democracy every one is equal but some are more equal than others" is a phrase that often describes us. LOL
You may want to check Barry Ritholtz's blog today on his post titled:
HFT/Algo Trading Alert Systems
It should be coming clear by now to most market participants that the game is rigged and the non-wall streeters really don't have a chance anymore.
I believe what these young people(im 26) are acting out against is a what they perceive as a fixed game. The last 20 years have seen real wages stagnate for the vast majority of american workers. This has not been the case in America since Henry Ford introduced the $5 day.
The pain of the resulting inequality is compounded by the government's perceived continued and unwavering support of the banks. The young people were a big factor in getting Obama his job, now they feel betrayed by him supporting the banking status quo while they languish jobless without prospects. They may not yet be able to articulate themselves, but their anger is real and will only spread
on the one hand, hundreds of banks have gone bankrupt --- the TARP plan just protected the biggest banks --- WAMU went bust, Wachovia went bust, mass layoffs in the financial services sector and notable true wall street firms lehman and bear stearns went bust. so there has been significant pain on wall street.
the disgusting part where I can sympathize with the protesters is that the government should have forced Goldman Sachs to take large haircut on the bailout and significantly penalized them for their lack of ethics in the mortgage disaster. allowing GS to go back to business as usual with huge paychecks is pretty scummy.
Goldman got paid off 100 cents on the dollar for a industry they helped bankrupt (AIG, Lehman).
Goldman is a great company and much of the firm is ethical --- however, they blew it on management oversight in 2006-2009 and then got paid off at full price. Its a crock.
otoh, TARP has been essetnailly entirely paid-off. the general public thinks those dollars went to banks as charity. it did --- but it was a loan and occupywallstreet has no clue what their argument is....
end
There just seems to be a lot of general resentment around. I saw several stories along the lines of "We were promised a nice middle-class life as long as we did the right things". Well, that was never the case, and people are disappointed. Protesters in Greece are saying similar things - "We had a nice lifestyle (some might say debt-fueled), it's gone, and we want it back". There's no good solution for that.
Max is right. Things could easily get out of control.
Without knowing the circumstances of the business owner mentioned, this is pretty common, even in good times. I know several people that own small businesses. As an investor, I see them taking incredible risks, probably without realizing it. Guess it's the only way to grow.
Rich
JBacon, if the young people feel betrayed by Obama now, how do you think they will feel in 10-20 years (maybe sooner) when politicians raise their taxes and blame the tax increases on having to pay for the current Obama largess es?
Don't get me started defending banks, but right or wrong, they are thoroughly interwoven with US business and the economy. If BofA or Citi fails, it will take ages to fix the mess. If people think they're close to going under, we will see the greatest bank run the world has ever experienced, especially after it's discovered the FDIC has $1.39 in the till (that's a joke, but it's still small) insuring $10T of assets.
Protesters need to be careful what they wish for.
Rich
A complex problem but surely a great deal of it can be traced to this: For two-score years after WWII we grew together; for the past two-score years we have grown apart, in some ways subtly, in others like a slap in the face; e.g., http://tinyurl.com/5t5o6hh
As Rich (Anon 7:53) intimate, a sense of loss is not a small thing. People are struggling to find meaning in their woe. Wouldn't surprise me in the least if some former tea party folks joined the crowds out there; much of that earlier heat got siphoned off by plutocrats and put into the service of the Republican Party but serving as shock troops while leadership wheels and deals in the back room is scant fodder.
This is like a fire burning in the roots and, as a forest firefighter like Roger well knows, these are not easily quenched. Not simply because their source is hard to reach but because they tend to be incoherent, spreading everywhere seemingly at random, until finding fresh oxygen and leaping again into the air, there, there and there. This current outbreak may flame out ...or not, who knows; chaos is not predictable.
NB: And, as Anon 7:27 points out, responsibility does indeed cut both ways and it could be argued that responsibility is greatest for those in leadership who received greatest reward and benefit from things as they were. Certainly those who bear primary responsibility for the crisis collected rich dividends instead of paying dues; when failure is rewarded, and rewarded greatly, you can hardly expect to receive anything else.
RW, I think that's a big part of it. What I'd LOVE to see is:
1. sensible regulation. And honestly I'm tired of debating the need for regulation with people who don't understand what happened in 2008 and want to repeal Dodd-Frank, etc..
2. A fix in income equality. Now,I have zero idea how to do it. But I have a very good understanding of where my income has gone in the last 10 years (I have a yearly salary discussion with my manager about it compared to inflation. It's not her fault, but she needs to understand).
I honestly don't directly blame Wall Street for all, or even most, of this. I understand that, for instance, the job of a GS (as one example) employee is to make cash. AS much as he can. I just think there needs to be a lot more limits on what they can do/get away with - then the GS employee can do whatever he wants within those limits or regulations.
If the demonstations accomplish something, good for them. I don't really think they will.
Stephen,
I agree generally but I would draw sharp distinction in one part -- it is not anyones job to just make money. Making money needs to be in ethical ways. Goldman Sachs effectively blew itself up when AIG couldn't pay them. It was bad debt made whole by the US Gov't. Goldman Sachs would have likely been bankrupt if AIG were allowed to go bankrupt.
It should not have happened -- Goldman Sachs should have made better long-term decisions and not put itself in this position. It should have had middle and upper level managers simply saying NO to short-term profits (and bonuses). This wasn't just unethical, it was bad long-term business that would have blown them up.
At least the Obama's aren't feeling the pinch.
http://www.usnews.com/news/blogs/washington-whispers/2011/10/04/michelle-obamas-africa-vacation-cost-more-than-432142
I'm not quite sure that "stuff happens, get over it" is the right response to someone who gets hosed. I do think you are right, if you were impacted directly (i.e. your main income and/or housing lost) you'd look at it differently. The "life isn't fair" term helps people learn and cope, but it doesn't mean the culprit wasn't wrong. Since you left your bike out, I guess the thief must have been morally obligated to take it from you.
"morally obligated" to take my bike? interesting comment. my stupidity created an opportunity for a bad person to do something bad.
Precisely. Now imagine how worse someone feels when they didn't do something stupid and they got hosed.
The way in how you deal with something is a related but separate issue than what created the problem in the first place. Just because someone is voicing frustration over unnecessary suffering caused by wreckless greed. Helping to cause a change to a massive problem I believe is a better reaction than laying down and taking it from others.
even better would be a combination of speaking out and solving your own problem.
Yes it is a shame many unfortunates have taken all the right steps and still have been caught up in this. Obviously (in retrospect) there was a lot of excess and speculation in the system - on individual as well as corporate levels - which had to be purged from the system in order to achieve longer-term stability.
A rational, cold-hearted way to look at people who are desperate, but when hasn't there been an unfortunate section of the population who are down on their luck? Even during the booming 80s homelessness and inequality, particularly for ethnic minorities, was rife and very apparent.
Now we're more connected and memes and attitudes can spread much more easily, leading to a greater likelihood (in my opinion) of mass demonstrations or even pitch-fork battles and mob rule. Whilst unemployment levels are near or below current I think the likelihood of worsening behaviors is almost non-existent. Add another 5% to unemployment levels, though, and surely lawlessness will increase markedly.
I wasn't aware that all the people who were impacted are sitting around waiting for help. That's a poor generalization.
I personally got hit, and within a few weeks I found a new job. I was fortunate. Yes some are might not have had the same drive or ability to fix it, but many have. That's obvious with any population set.
Much of their frustration is in the difficulty of finding an opportunity when little to none exist. The ones frustrated about the bank with the loans try the best they can and get nothing, only to watch the banks get thrown billions of (their own taxpayer) dollars to help them loan out to individuals but see the banks not loan them and sit on it. While giant bonuses continue to be paid.
It stings to many. You might be too close to it to see it.
would you hire any of those people protesting?
Wanna be hippies. Get over yourself.
I don't think that was a generalization, i did not say all those protesters... I said a combo of speaking up and creating your own solution would be best.
as fire as hiring any of the protesters...depends on the job.
i can support the idea of people taking a position I may not agree with and asking some tough questions but I can't get behind the ones (whether a large or small number) waiting for a solution handed to them as the demands seem to want, like all debt forgiven.
I believe the political aspect of this began with Bush saying "Let's go to War......and we don't even have to pay for it!!!!! and.....I am reducing taxes on the prominent citizens".
It's a free-for-all
Roger
I could solve my problems if it were a level playing field
maybe it never was, but it is much worse for joe average
11:59, your partisan BS does not advance the conversation at all. For as many bad things that could be said about Bush, we could match that jab for jab about Obama. They are both terrible for different reasons.
12:05,
so what are you going to do?
I sometimes associate comment count here with market performance. Comments go up during nasty performances. Think yesterday's drop hit a chord with people?
I dunno..
Good and varied comments here today.
I'll add a bit more. The protestors. or whatever they call themselves, appear to be folks whom are neither hungry or homeless (maybe, by choice).They are quite well educated in the sense that they expect society, perhaps life itself, to always be fair and just, which is at best whimsical and at worst an indictment of their education. They appear to have been taught that someone else will always be at hand to give out something for nothing, that jobs out of the realm of their interest or economic wants is not worth taking, and that if only the "right" person or group was in charge, all societal ills and their individual wants that are unsatisfied would vanish.
Stalin, Hitler, Mussolini, Castro, Pol Pot and Mao would fit this template for leadership. Many intellectuals heartily supported them, and many of these well-educated, yet myopically selfish intellectuals profited from their leadership. More,sadly, ended up in the Gulag, an oven, in front of a firing squad or in a re-education camp.
Of course, it took useful idiots to set these heinous regimes up....and we see a slice of this now in NYC and elsewhere.
We may have a dysfunctional system, but one person/one vote is how to solve it. Make that one LEGAL vote. Messy, yes. Better than all the other alternatives, you betcha.
T
Is this the American Spring? I can't help but think that these protestors feel sympatico with their Arab brethren who rage(d) against the system.
I worry that the seeds of some kind of class warfare are being sewn here. It's worse when unions throw their support behind the protestors, and if the liberal media start to fan the flames, watch out. This could quickly get bigger than anti-Wall Street greed.
WOW
I Ignored this post due to issues in my day.
But, I still think we have not CLOSED below a a level to declare this a bear market.
Previous technicality a side I hate this market also.
What will the future hold? a coin may predict better than me or others.
All that said I view this market a BUY. So I have not sold and will not sell. I also hope my indicators are correct.
SEG
T:
Your comment about protesters expecting fair - that's what happens when, starting in first grade, you teach children playing games or taking tests, that there are no losers, and everyone is a winner. Everybody gets an award.
Just couldn't resist.
Rich
Roger any insight on Peter Brimlows column this AM....."The danger with an average investor joining this game with inverse funds and inverse index ETFs is that you can easily become a victim of a short-covering squeeze, where high-volume traders (the Fed’s dealer and investment banks) can load up on cheap calls and then shuffle stocks between each other, spiking prices up and forcing those with short positions to engage in panic buying to cover their short positions, usually after they have given back much of their gains.”
My take is we need policies initially started as Reganomics but on a much larger scale - increase government debt into quadrillions, and transfer the money created into the private sector -Rich will be happy and poor will be satisfied with crums thrown at them too- Problem solved.
For those of you who don't understand, please send me my multi-million bonus for bankrupting my bank and getting the multi-billion dollar bail out. You can make it up by cutting child nutrition and someone else's health care.
our ISP is down and commenting through my phone is a hassle. I'm at Yavapai College to try to catch up
have not read the Brimlow piece, if I read you correctly then I think part of the solution is the good sense of moderation.
Charlie, you're not really bringing much to the table but emotional rants which don't move the conversation forward.
Hmmm
If someone lies, cheats, steals, manipulated, bribes and generally doesn't play by the rule of law and shows utter contempt for their fiduciary responsibilities to their clients then it is perfectly reasonable and logical for those said clients to be pissed off.
Specifically I am referring to the FED and Congress which have legal fiduciary responsibilities to the American people. Wall Street has taken advantage of the outright corruption of the FED and Congress and translated into obscene profits. Generated not by dint of hard work and perserverence but by the above mentioned methods.
Oh and what in world has anti-semitism got to do with fraud on Wall Street, the FED and the banking industry in general? In short nothing but it sure sounds like a good way to discredit the movement.
People I have a suggestion, it is time for some of you to take a good long look in the mirror. But before you do, take off those rose colored glasses. Again in truly random markets it is impossible for the same small group of Wall Street insiders to make money ALL the Time without lying, cheating, stealing, bribing etc......
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