“49% of corporate profits came from financial services. Not production. Not anything remotely to do with the needs of the American public”. That is said by Gordon Gekko.
Jerome Kerviel was a young trader who made a loss of 7 billion dollars to the Societé Genérale bank and went to jail for unauthorised trading. His work was to bet on the stock exchange that German companies would lose value. So the markets were like a casino but with one big difference as after a bad night at the tables, casino gamblers do not expect the government bail them out. So the traders made money betting on the losses of companies.
The result of this crazy whim of the markets created by bets and rumours was unemployment, businesses going to the wall, inflation and banks saved from ruin by taxpayer’s money.
(See the video from the 11:30 minut to the 13.06 minut. Film: WALL STREET: MONEY NEVER SLEEPS part 2. 2010)
-Let’s go! Let’s go! Let’s make some dough!
-I can’t! It’s not up to me!
-Give me a favour. Don’t ask me dumb questions. Stay on top of Harry. He’s driving me crazy. You got it, boss.
-I thought maybe the news out of London would’ve wrecked the mood.
-Don’t tell me about London. They tell me they got a $ 125 million profit, right? I look at the same lousy spread, to me, it looks like a buck and a quarter loss. Then they tell me, “Don’t worry about it”. We are making money on the losses. How do you make money on losses? You tell me. I am just an old dinosaur.
Buying frenzy on Wall Street
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