Game Over for Wall Street
Game is over for Wall Street. It is not because that a few financial firms were wiped out or the Dow was down several hundred points for the past week. It is the changes in the financial market structure and the finance’s role in the economy that seal off the ill fate of the Wall Street. The lucrative business models supported by the financial derivative trading or the structured financial debt (deals) are collapsing in front of our eyes. Even after the whole mess is over, there will be no glorious days, or just shiny days, returning on Wall Street. As I pointed out much earlier, banks are no smarter than any other businesses or industries– by taking in and lending out money– to make huge profits, without the help of derivatives or leverage. Those derivatives or leverages are simply gone.
So what will happen next? We will probably find ourselves stand on ground zero after clean out the rubbles. No doubt hard days will come for many people. But that is a process that we want to avoid but are unable to shun. The real economy has to suffer and that is the collateral damage of the fallout of this financial episode. We will not go anywhere without this recourse.
So much for financial magic to play with.
