5 depressing ways the 1 percent is strangling the US economy

[applegrove]

5 depressing ways the 1 percent is strangling the US economy

By Paul Bucheit at Salon

http://www.salon.com/2013/10/08/5_depressing_ways_the_1_percent_is_strangling_the_us_economy_partner/

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4. Finance is Outrunning Society, and Taking the Money with Them

Americans once trusted the financial industry to safeguard their retirement money. But high tech has transformed high finance, at a much faster rate than the average investor can understand the changes.

Rolling Stone reports on the loss of $2.3 billion in pension money in Maine — and the simultaneous billing of $2.1 billion by the hedge funds, private-equity funds and venture-capital funds. Another report tells of local funding crises caused by indecipherable “structured finance” deals sold by bankers with promises of big returns. In 2007 a hedge fund manager (John Paulson) made $3.7 billion by conspiring with Goldman Sachs to create packages of risky subprime mortgages, so that in anticipation of a housing crash he could use other people’s money to bet against his personally designed sure-to-fail financial instruments.

The high-speed high-tech chicanery continues in the stock market, where programs can intercept ‘buy’ orders and in a few nanoseconds purchase the stock and then complete the ‘buy’ order for a few pennies more.

The bankers and hedgers and hustlers have made up new rules for making money, and our government representatives don’t know what’s going on, or don’t care, or don’t want to stop the financial games that ultimately generate campaign funds. Finance is quickly printing its own new money. In less than ten years, the world’s wealth has approximately doubled, from $113 trillion to $223 trillion. Much of that is sheer speculation: the derivatives industry is worth over $1 quadrillion. But those speculative transactions get cashed in as real money.

It’s a dizzying high-speed fantasyland that redistributes the real money of the middle class to the super-rich while inventing new forms of fees and bonuses along the way.



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[Turbineguy]

1. The teabaggers will take revenge for you.

If the US defaults the 1% will be slightly touched.