http://www.theatlantic.com/business...er-wall-street-hasnt-learned-anything/393623/It’s been said many times, in many places, even well before the Great Recession: The culture on Wall Street is terrible. It encourages bad behavior. More recently, there are concerns that the Wall Street that caused the financial crisis is back.
A new report by The University of Notre Dame, commissioned by the law firm Labaton Sucharow, which represents whistleblowers, has some alarming numbers to add to this well-trodden narrative. The report surveyed more than 1,200 people in the financial-services industry—account executives, wealth advisors, financial analysts, investment bankers, operations managers, and portfolio managers—in both the U.S. and the U.K. to look at whether increased regulations, along with calls for a cultural change, have had any demonstrable effects.
So how does the financial-services industry view its own behavior, legally and ethically? Not so great, it turns out. Nearly half of the respondents felt that it was likely that a competitor has engaged in unethical or illegal activity in order to gain an edge. Perhaps more shocking are those who say they’ve witnessed such wrongdoing: 23 percent reported personally observing or having firsthand knowledge of misdeeds. That number jumps to 34 percent when looking only at those earning more than $500,000, suggesting that enhanced status and earnings bring a higher likelihood of witnessing wrongdoing.
“People seem more aware of the regulation, but that hasn’t necessarily impacted behavior.”
“I think that the U.S. law-enforcement regulatory authorities are going to be troubled by the results of this survey, but the U.K. ones will be particularly troubled,” says Jordan Thomas, a partner at Labaton Sucharow and the former assistant director at the Securities and Exchange Commission. “This is actually indicative of an industry.”
In the survey, 25 percent reported that they would engage in insider trading if there was a guaranteed $10 million payday at the end of the line and the chances of being arrested were nil. More troubling, those with less than 10 years of experience were twice as likely to say yes to this illegal payday. Overall, the U.K. scored worse than the U.S. on ethical measures ranging from knowledge of wrongdoing to insider trading. Additionally, 10 percent of all respondents reported having felt pressure at their company to violate the law or compromise ethical standards.
Ann Tenbrunsel, a professor of business ethics at University of Notre Dame’s Mendoza College of Business, is a co-author of the report. Her research covers ethical breakdowns in corporations, looking specifically at why they happen. She says that despite significant efforts from a regulatory perspective—such as SEC fines and the Dodd-Frank Act—and money spent on ethics training, well-intentioned reform efforts just aren’t producing results yet.
“To me, as a researcher in this area, it says what we’re doing isn’t working to the extent that we wished it was,” says Tenbrunsel. “People seem more aware of the regulation, but that hasn’t necessarily impacted behavior. Then being aware of regulation isn’t enough.”
The report also looked at the factors preventing employees from reporting illegal or unethical behavior. Both Tenbrunsel and Thomas believe that whistleblowing isn’t just difficult to do in the culture of Wall Street—it’s become increasingly harder in the age of gag orders. A quarter of respondents in the survey earning $500,000 or more reported that they signed a confidentiality agreement that prohibits them from reporting illegal activities to the authorities.(WTF!) “The thing that blows my mind is that, as a former DOJ and SEC law-enforcement attorney, seeing the proliferation of secrecy agreements and policies that prevent people from reporting wrongdoing,” says Thomas.
While the SEC whistleblower program is anonymous, with monetary rewards, the fear of retaliation and blacklisting discourages people from coming forward. Additionally, workers in the financial-services industry don’t yet trust that companies will protect whistleblowers.
“The fix to it isn’t just identifying the bad apples, but to understand the bad apples.”
“Essentially, if you look at the things that are impacting people's ability to report, you have policies, agreements, retaliation, which silences other whistleblowers down the road,” says Thomas. “And then if you also see the statistics about pressure to engage in unethical illegal behavior … it's a sad state of affairs.”
Despite 39 percent of the respondents feeling that regulatory agencies are ineffective at policing the financial-services industry, 89 percent reported that if they were offered protection, anonymity, and monetary rewards, they would report wrongdoing. Tenbrunsel believes that the way forward is understanding the incentives people currently have to cheat, along with dismantling the culture of stifling whistleblowing. As salaries and bonuses on Wall Street bounce back, if old-fashioned shame isn’t working, then the hope is that cultural change and the right incentives will.
“The fix to it isn’t just identifying the bad apples, but to understand the bad apples,” says Tenbrunsel. “It’s not just a few evildoers … the widespread nature of this. There’s a lot of ways that individual organizations can contribute to the unethical culture potentially unaware that they’re doing so.”
Seven Years Later, Wall Street Hasn't Learned Anything
- Thread starter CHL
- Start date
Bernie Madoff
Banned
Umm, they learned how to keep making money... Its the average Joe who hasn't learned shyt
Bernie Madoff
Banned
What's up Joe?
Get paper 
newworldafro
DeeperThanRapBiggerThanHH
What lessons learned or increased regulations/oversight implemented?? 
http://www.globalresearch.ca/the-si...the-global-economy-hits-a-record-high/5384096
The Size of the Derivatives Bubble Hanging Over the Global Economy Hits a Record High
By Michael Snyder
Global Research, May 27, 2014
Economic Collapse
The global derivatives bubble is now 20 percent bigger than it was just before the last great financial crisis struck in 2008. It is a financial bubble far larger than anything the world has ever seen, and when it finally bursts it is going to be a complete and utter nightmare for the financial system of the planet. According to the Bank for International Settlements, the total notional value of derivatives contracts around the world has ballooned to an astounding 710 trillion dollars ($710,000,000,000,000). Other estimates put the grand total well over a quadrillion dollars. [Background.] If that sounds like a lot of money, that is because it is. For example, U.S. GDP is projected to be in the neighborhood of around 17 trillion dollars for 2014. So 710 trillion dollars is an amount of money that is almost incomprehensible. Instead of actually doing something about the insanely reckless behavior of the big banks, our leaders have allowed the derivatives bubble and these banks to get larger than ever. [Background.] In fact, as I have written about previously, the big Wall Street banks are collectively 37 percent larger than they were just prior to the last recession. “Too big to fail” is a far more massive problem than it was the last time around, and at some point this derivatives bubble is going to burst and start taking those banks down. When that day arrives, we are going to be facing a crisis that is going to make 2008 look like a Sunday picnic. [For background on why derivatives are so dangerous, read this, this and this.]
If you do not know what a derivative is, Mayra Rodríguez Valladares, a managing principal at MRV Associates, provided a pretty good definition in her recent article for the New York Times…
A derivative, put simply, is a contract between two parties whose value is determined by changes in the value of an underlying asset. Those assets could be bonds, equities, commodities or currencies. The majority of contracts are traded over the counter, where details about pricing, risk measurement and collateral, if any, are not available to the public.
In other words, a derivative does not have any intrinsic value. It is essentially a side bet. Most commonly, derivative contracts have to do with the movement of interest rates. But there are many, many other kinds of derivatives as well. People are betting on just about anything and everything that you can imagine, and Wall Street has been transformed into the largest casino in the history of the planet. After the last financial crisis, our politicians promised us that they would do something to get derivatives trading under control. But instead, the size of the derivatives bubble has reached a new record high. In the New York Times article I mentioned above, Goldman Sachs and Citibank were singled out as two players that have experienced tremendous growth in this area in recent years…
Goldman Sachs has been increasing its derivatives volumes since the crisis, and it had a portfolio of about $48 trillion at the end of 2013. Bloomberg Businessweek recently reported that as part of its growth strategy, Goldman plans to sell more derivatives to clients. Citibank, too, has been increasing its derivatives portfolio, despite the numerous capital and regulatory challenges, In fact, its portfolio has risen by over 65 percent since the crisis — the most of any of the four banks — to $62 trillion.
According to official government numbers, the top 25 banks in the United States now have a grand total of more than 236 trillion dollars of exposure to derivatives. But there are four banks that dwarf everyone else. The following are the latest numbers for those four banks… JPMorgan Chase Total Assets: $1,945,467,000,000 (nearly 2 trillion dollars) Total Exposure To Derivatives: $70,088,625,000,000 (more than 70 trillion dollars) Citibank Total Assets: $1,346,747,000,000 (a bit more than 1.3 trillion dollars) Total Exposure To Derivatives: $62,247,698,000,000 (more than 62 trillion dollars) Bank Of AmericaTotal Assets: $1,433,716,000,000 (a bit more than 1.4 trillion dollars) Total Exposure To Derivatives: $38,850,900,000,000 (more than 38 trillion dollars) Goldman Sachs Total Assets: $105,616,000,000 (just a shade over 105 billion dollars – yes, you read that correctly) Total Exposure To Derivatives: $48,611,684,000,000 (more than 48 trillion dollars) If the stock market keeps going up, interest rates stay fairly stable and the global economy does not experience a major downturn, this bubble will probably not burst for a while. But if there is a major shock to the system, we could easily experience a major derivatives crisis very rapidly and several of those banks could fail simultaneously. There are many out there that would welcome the collapse of the big banks, but that would also be very bad news for the rest of us. You see, the truth is that the U.S. economy is like a very sick patient with an extremely advanced case of cancer. You can try to kill the cancer (the banks), but in the process you will inevitably kill the patient as well. Right now, the five largest banks account for 42 percent of all loans in the entire country, and the six largest banks control 67 percent of all banking assets. If they go down, we go down too. That is why the fact that they have been so reckless is so infuriating. Just look at the numbers for Goldman Sachs again. At this point, the total exposure that Goldman Sachs has to derivatives contracts is more than 460 times greater than their total assets. And this kind of thing is not just happening in the United States. German banking giant Deutsche Bank has more than 75 trillion dollars of exposure to derivatives. That is even more than any single U.S. bank has. This derivatives bubble is a “sword of Damocles” that is hanging over the global economy by a thread day after day, month after month, year after year. At some point that thread is going to break, the bubble is going to burst, and then all hell is going to break loose. You see, the truth is that virtually none of the underlying problems that caused the last financial crisis have been fixed. Instead, our problems have just gotten even bigger and the financial bubbles have gotten even larger. Never before in the history of the United States have we been faced with the threat of such a great financial catastrophe. Sadly, most Americans are totally oblivious to all of this. They just have faith that our leaders know what they are doing, and they have been lulled into complacency by the bubble of false stability that we have been enjoying for the last couple of years. Unfortunately for them, this bubble of false stability is not going to last much longer. A financial crisis far greater than what we experienced in 2008 is coming, and it is going to shock the world. ———- A former Washington, D.C., attorney, Michael Snyder runs a number of websites, including:
http://www.globalresearch.ca/the-si...the-global-economy-hits-a-record-high/5384096
The Size of the Derivatives Bubble Hanging Over the Global Economy Hits a Record High
By Michael Snyder
Global Research, May 27, 2014
Economic Collapse
The global derivatives bubble is now 20 percent bigger than it was just before the last great financial crisis struck in 2008. It is a financial bubble far larger than anything the world has ever seen, and when it finally bursts it is going to be a complete and utter nightmare for the financial system of the planet. According to the Bank for International Settlements, the total notional value of derivatives contracts around the world has ballooned to an astounding 710 trillion dollars ($710,000,000,000,000). Other estimates put the grand total well over a quadrillion dollars. [Background.] If that sounds like a lot of money, that is because it is. For example, U.S. GDP is projected to be in the neighborhood of around 17 trillion dollars for 2014. So 710 trillion dollars is an amount of money that is almost incomprehensible. Instead of actually doing something about the insanely reckless behavior of the big banks, our leaders have allowed the derivatives bubble and these banks to get larger than ever. [Background.] In fact, as I have written about previously, the big Wall Street banks are collectively 37 percent larger than they were just prior to the last recession. “Too big to fail” is a far more massive problem than it was the last time around, and at some point this derivatives bubble is going to burst and start taking those banks down. When that day arrives, we are going to be facing a crisis that is going to make 2008 look like a Sunday picnic. [For background on why derivatives are so dangerous, read this, this and this.]
If you do not know what a derivative is, Mayra Rodríguez Valladares, a managing principal at MRV Associates, provided a pretty good definition in her recent article for the New York Times…
A derivative, put simply, is a contract between two parties whose value is determined by changes in the value of an underlying asset. Those assets could be bonds, equities, commodities or currencies. The majority of contracts are traded over the counter, where details about pricing, risk measurement and collateral, if any, are not available to the public.
In other words, a derivative does not have any intrinsic value. It is essentially a side bet. Most commonly, derivative contracts have to do with the movement of interest rates. But there are many, many other kinds of derivatives as well. People are betting on just about anything and everything that you can imagine, and Wall Street has been transformed into the largest casino in the history of the planet. After the last financial crisis, our politicians promised us that they would do something to get derivatives trading under control. But instead, the size of the derivatives bubble has reached a new record high. In the New York Times article I mentioned above, Goldman Sachs and Citibank were singled out as two players that have experienced tremendous growth in this area in recent years…
Goldman Sachs has been increasing its derivatives volumes since the crisis, and it had a portfolio of about $48 trillion at the end of 2013. Bloomberg Businessweek recently reported that as part of its growth strategy, Goldman plans to sell more derivatives to clients. Citibank, too, has been increasing its derivatives portfolio, despite the numerous capital and regulatory challenges, In fact, its portfolio has risen by over 65 percent since the crisis — the most of any of the four banks — to $62 trillion.
According to official government numbers, the top 25 banks in the United States now have a grand total of more than 236 trillion dollars of exposure to derivatives. But there are four banks that dwarf everyone else. The following are the latest numbers for those four banks… JPMorgan Chase Total Assets: $1,945,467,000,000 (nearly 2 trillion dollars) Total Exposure To Derivatives: $70,088,625,000,000 (more than 70 trillion dollars) Citibank Total Assets: $1,346,747,000,000 (a bit more than 1.3 trillion dollars) Total Exposure To Derivatives: $62,247,698,000,000 (more than 62 trillion dollars) Bank Of AmericaTotal Assets: $1,433,716,000,000 (a bit more than 1.4 trillion dollars) Total Exposure To Derivatives: $38,850,900,000,000 (more than 38 trillion dollars) Goldman Sachs Total Assets: $105,616,000,000 (just a shade over 105 billion dollars – yes, you read that correctly) Total Exposure To Derivatives: $48,611,684,000,000 (more than 48 trillion dollars) If the stock market keeps going up, interest rates stay fairly stable and the global economy does not experience a major downturn, this bubble will probably not burst for a while. But if there is a major shock to the system, we could easily experience a major derivatives crisis very rapidly and several of those banks could fail simultaneously. There are many out there that would welcome the collapse of the big banks, but that would also be very bad news for the rest of us. You see, the truth is that the U.S. economy is like a very sick patient with an extremely advanced case of cancer. You can try to kill the cancer (the banks), but in the process you will inevitably kill the patient as well. Right now, the five largest banks account for 42 percent of all loans in the entire country, and the six largest banks control 67 percent of all banking assets. If they go down, we go down too. That is why the fact that they have been so reckless is so infuriating. Just look at the numbers for Goldman Sachs again. At this point, the total exposure that Goldman Sachs has to derivatives contracts is more than 460 times greater than their total assets. And this kind of thing is not just happening in the United States. German banking giant Deutsche Bank has more than 75 trillion dollars of exposure to derivatives. That is even more than any single U.S. bank has. This derivatives bubble is a “sword of Damocles” that is hanging over the global economy by a thread day after day, month after month, year after year. At some point that thread is going to break, the bubble is going to burst, and then all hell is going to break loose. You see, the truth is that virtually none of the underlying problems that caused the last financial crisis have been fixed. Instead, our problems have just gotten even bigger and the financial bubbles have gotten even larger. Never before in the history of the United States have we been faced with the threat of such a great financial catastrophe. Sadly, most Americans are totally oblivious to all of this. They just have faith that our leaders know what they are doing, and they have been lulled into complacency by the bubble of false stability that we have been enjoying for the last couple of years. Unfortunately for them, this bubble of false stability is not going to last much longer. A financial crisis far greater than what we experienced in 2008 is coming, and it is going to shock the world. ———- A former Washington, D.C., attorney, Michael Snyder runs a number of websites, including:
Richard Wright
Living Legend
Lunatic
Bernie Madoff
Banned
Thanks
Domingo Halliburton
Handmade in USA
What lessons learned or increased regulations/oversight implemented??
http://www.globalresearch.ca/the-si...the-global-economy-hits-a-record-high/5384096
The Size of the Derivatives Bubble Hanging Over the Global Economy Hits a Record High
By Michael Snyder
Global Research, May 27, 2014
Economic Collapse
The global derivatives bubble is now 20 percent bigger than it was just before the last great financial crisis struck in 2008. It is a financial bubble far larger than anything the world has ever seen, and when it finally bursts it is going to be a complete and utter nightmare for the financial system of the planet. According to the Bank for International Settlements, the total notional value of derivatives contracts around the world has ballooned to an astounding 710 trillion dollars ($710,000,000,000,000). Other estimates put the grand total well over a quadrillion dollars. [Background.] If that sounds like a lot of money, that is because it is. For example, U.S. GDP is projected to be in the neighborhood of around 17 trillion dollars for 2014. So 710 trillion dollars is an amount of money that is almost incomprehensible. Instead of actually doing something about the insanely reckless behavior of the big banks, our leaders have allowed the derivatives bubble and these banks to get larger than ever. [Background.] In fact, as I have written about previously, the big Wall Street banks are collectively 37 percent larger than they were just prior to the last recession. “Too big to fail” is a far more massive problem than it was the last time around, and at some point this derivatives bubble is going to burst and start taking those banks down. When that day arrives, we are going to be facing a crisis that is going to make 2008 look like a Sunday picnic. [For background on why derivatives are so dangerous, read this, this and this.]
If you do not know what a derivative is, Mayra Rodríguez Valladares, a managing principal at MRV Associates, provided a pretty good definition in her recent article for the New York Times…
A derivative, put simply, is a contract between two parties whose value is determined by changes in the value of an underlying asset. Those assets could be bonds, equities, commodities or currencies. The majority of contracts are traded over the counter, where details about pricing, risk measurement and collateral, if any, are not available to the public.
In other words, a derivative does not have any intrinsic value. It is essentially a side bet. Most commonly, derivative contracts have to do with the movement of interest rates. But there are many, many other kinds of derivatives as well. People are betting on just about anything and everything that you can imagine, and Wall Street has been transformed into the largest casino in the history of the planet. After the last financial crisis, our politicians promised us that they would do something to get derivatives trading under control. But instead, the size of the derivatives bubble has reached a new record high. In the New York Times article I mentioned above, Goldman Sachs and Citibank were singled out as two players that have experienced tremendous growth in this area in recent years…
Goldman Sachs has been increasing its derivatives volumes since the crisis, and it had a portfolio of about $48 trillion at the end of 2013. Bloomberg Businessweek recently reported that as part of its growth strategy, Goldman plans to sell more derivatives to clients. Citibank, too, has been increasing its derivatives portfolio, despite the numerous capital and regulatory challenges, In fact, its portfolio has risen by over 65 percent since the crisis — the most of any of the four banks — to $62 trillion.
According to official government numbers, the top 25 banks in the United States now have a grand total of more than 236 trillion dollars of exposure to derivatives. But there are four banks that dwarf everyone else. The following are the latest numbers for those four banks… JPMorgan Chase Total Assets: $1,945,467,000,000 (nearly 2 trillion dollars) Total Exposure To Derivatives: $70,088,625,000,000 (more than 70 trillion dollars) Citibank Total Assets: $1,346,747,000,000 (a bit more than 1.3 trillion dollars) Total Exposure To Derivatives: $62,247,698,000,000 (more than 62 trillion dollars) Bank Of AmericaTotal Assets: $1,433,716,000,000 (a bit more than 1.4 trillion dollars) Total Exposure To Derivatives: $38,850,900,000,000 (more than 38 trillion dollars) Goldman Sachs Total Assets: $105,616,000,000 (just a shade over 105 billion dollars – yes, you read that correctly) Total Exposure To Derivatives: $48,611,684,000,000 (more than 48 trillion dollars) If the stock market keeps going up, interest rates stay fairly stable and the global economy does not experience a major downturn, this bubble will probably not burst for a while. But if there is a major shock to the system, we could easily experience a major derivatives crisis very rapidly and several of those banks could fail simultaneously. There are many out there that would welcome the collapse of the big banks, but that would also be very bad news for the rest of us. You see, the truth is that the U.S. economy is like a very sick patient with an extremely advanced case of cancer. You can try to kill the cancer (the banks), but in the process you will inevitably kill the patient as well. Right now, the five largest banks account for 42 percent of all loans in the entire country, and the six largest banks control 67 percent of all banking assets. If they go down, we go down too. That is why the fact that they have been so reckless is so infuriating. Just look at the numbers for Goldman Sachs again. At this point, the total exposure that Goldman Sachs has to derivatives contracts is more than 460 times greater than their total assets. And this kind of thing is not just happening in the United States. German banking giant Deutsche Bank has more than 75 trillion dollars of exposure to derivatives. That is even more than any single U.S. bank has. This derivatives bubble is a “sword of Damocles” that is hanging over the global economy by a thread day after day, month after month, year after year. At some point that thread is going to break, the bubble is going to burst, and then all hell is going to break loose. You see, the truth is that virtually none of the underlying problems that caused the last financial crisis have been fixed. Instead, our problems have just gotten even bigger and the financial bubbles have gotten even larger. Never before in the history of the United States have we been faced with the threat of such a great financial catastrophe. Sadly, most Americans are totally oblivious to all of this. They just have faith that our leaders know what they are doing, and they have been lulled into complacency by the bubble of false stability that we have been enjoying for the last couple of years. Unfortunately for them, this bubble of false stability is not going to last much longer. A financial crisis far greater than what we experienced in 2008 is coming, and it is going to shock the world. ———- A former Washington, D.C., attorney, Michael Snyder runs a number of websites, including:
I can't even go into how stupid it is quoting notional values of derivatives.
Domingo Halliburton
Handmade in USA
You might want to stop worrying about wall street and worry about your government leveraging your economy on the back of demand from China and coal.
newworldafro
DeeperThanRapBiggerThanHH
Enlighten us Domingo Halliburton ...
-2008 TARP = Troubled Asset Relief Program, which was a nice way for saying derivatives. In other words all those trillions went to bail the banks out. It was a nice gesture, under pressure, to keep things afloat. Although if Debra's Bakery franchiese goes out of business, the government will not bail out her cookie dough (don't ask me how) enterprise
-2014 The FDIC insures derivatives in that Omnibus bill, in other words, mandating/legalizing that the government bail the banks out for their derivatives on-goings..
http://www.forbes.com/sites/robertl...n-on-trading-derivatives-backed-by-uncle-sam/
DEC 13, 2014 @ 11:35 AM
"Wall Street banks like Citigroup and JP Morgan Chase have flexed the power of their influence to pressure Congress and the White House into a key change in the law that will allow the trading of risky financial derivatives in bank operations that are insured by the Federal Deposit Insurance Corp. This means the nation’s largest banks used the deadline for passing the Omnibus spending bill as pressure to reverse a key section of the Dodd-Frank bill of 2010 that was meant to prohibit a federal government bailout of swaps entities."
