With all the seedy bank behavior that has been exposed since the financial crisis, it’s stunning that there’s still dirty laundry left to be aired. We’ve had predatory subprime lending, fraudulent ratings, excessive risk-taking and even clients being taken advantage of in order to unload toxic mortgages. Yet even with these precedents, the Libor scandal still manages to shock. – Joe Nocera, “Libor’s Dirty Laundry,” The New York Times
According to a survey by the whistleblower law firm Labaton Sucharow, 24% Wall Street executives believe they need to engage in unethical or illegal behavior to succeed. Thirty percent said their compensation plans created pressure to compromise ethical standards or violate the law.
And now just in the last few hours comes word that another futures broker, PFG Best has put it’s consumers accounts on hold, as “accounting irregularities” are investigated after the owner, “attempted suicide”. Zero Hedge has bird-dogged an NFA affidavit indicating that $220 million is missing. And the custodial bank, drum roll please, is JP Morgan. Banks are like giant fuck you machines (The Daily Report).
Consider that Morgan Stanley Smith Barney, Merrill Lynch, Wells Fargo Advisors and UBS Wealth Management Americas control $2.1 trillion in $5 million and over accounts. No wonder there is so much rainbow and lollipop one-trick-pony-sistema investing going on. My hunch is that these advisers as part of a script have overly piled clients into the income bond bubble, and income substitutes like farmland [Crops Burning Up] , REITs and other suspect asset classes like art, wine, and Lord who knows what else. When these markets really blow, I can’t even imagine how much wealth will be destroyed.
About The Author - Russ Winter is a veteran investor, financial writer, world traveler, and he blogs at Winter Watch. (EconMatters author archive here)
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
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