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<p>Unfortunately, I believe that it has been shown that the net effect of negative campaigning is actually to depress the vote overall. People ultimately choose to vote for no one.</p>
<p>Not that that has anything to do with Wall Street. (Well, it actually does at some level, but that’s another conversation.)</p>
<p>Agreed that it does not really have anything to do with it… in an election, all you have to do is look a little better than the other guy. Wall Street is just trying to figure out how to fleece the rest of us or the rest of the world, and either do it in a way that is not illegal (yet) or obfuscate what they are doing so they don’t get caught.</p>
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<p>Has to be. An aquaintance of mine owns a retail business that went public. Their kid, who couldn’t get the internship, got hired by the investment bank shortly after going public. The assignment? Retail sector. Seeing their company stocks swing widely before and after the earnings, I have to assume it would help to have their kid in the retail sector.</p>
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<p>I think most of the people who complain about Wall St aren’t comparing it to hedge funds in countries with less regulations. They’re comparing it to other sectors in this country. When you just say “is Wall Street one of the most ethical places to work?” the comparisons that jump to my mind are completely different professions, like being an engineer or an elementary school teacher or a lawyer or a firefighter or whatever. Not is Wall St in the US more ethical than Singapore?</p>
<p>I am not making a generalization about everyone who works on Wall St. One of my high school friends is now in ibanking and it’s all she ever wanted to do. Because her definition of success is to make the most money possible. I remember when we were around 14 her talking about how she really could care less about companies making unethical decisions like child labor and she could easily make those decisions without a second thought because she knew that she’d have to step on a lot of people to get to the top. I’m not saying she picked ibanking because she wanted to be unethical (it was because she wanted to be rich) but she obviously was not thinking ethics would be a big consideration in her career. Unless you definite ethics as following SEC rules I suppose.</p>
<p>I would love to hear what those of you condemning “Wall Street” workers are actually doing for a living. Full disclosure, that is what is required in finace.</p>
<p>I’ll make a qualification that I think one major problem (not just with wall street but with many Americans in general) is that ethics are mostly determined by what is legal and illegal. For example, hiding liabilities and expenses on corporate balance sheets is ethical as long as its legal (i.e. Lehman Bros.) but unethical if its illegal (i.e. Enron). Also, businesses are less transparent and CEOs are more protected then ever before. I’ve done some research and noticed that market rumors back in the 1980s were much more common then today. Fraud would have been nearly impossible to hide and while it did happen it didn’t have the effects of today. For example, while Crazy Eddie was a scam most investors actually didn’t lose much money. IMO we would have much less fraud if the media and public didn’t hate successful investors (particularly activist investors and activist short sellers) so much. For example, Carl Icahn was vilified for trying to take over companies in the 80s yet no one vilified the incompetent CEOs he went after. Finally, the SEC is way too focused on investor fairness (The mantra at the SEC should be “Successful investors cheat. Unsuccessful investors are being cheated)” Based on how they treated David Einhorn for calling out allied capital (a company that had assets on its Bal. Sheet that didn’t even exist), why would any investor (particularly one without a billion in the bank and an army of lawyers) want to call out a fraud? </p>
<p>The following is a great article about how the SEC vilifies successful investors:
[The</a> SEC Warns Hedge Funds: If You Beat The Market By 3%, We Are Looking Into You - Business Insider](<a href=“http://www.businessinsider.com/the-sec-warns-hedge-funds-if-you-beat-the-market-by-3-we-are-looking-into-you-2011-3]The”>The SEC Warns Hedge Funds: If You Beat the Market by 3%, We Are Looking Into You)</p>
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Could you describe your research? How did you reach that conclusion?</p>
<p>(Not disagreeing, just curious.)</p>
<p>Companies would regularly have to respond to bizarre stock prices movements. For example if takeover rumors were swirling the media usually had a lot more data about what was going on compared to today. Also, if things were going poorly (i.e. the deal was likely to fail) market rumors were more common to drive the price down more slowly compared to the methods of today (price shoots up when deal is announced; price collapses when deal is called off). It was much harder for companies then to do X and say Y. Why, I dunno. Maybe journalists were more intrusive?</p>
<p>OP - pick up a copy of this month’s Vanity Fair (June) and read the article on hedge funds and recent scandals. </p>
<p>If even a fraction of the report is true (which given the number who quickly turned informant, it seems likely), it’s a scary indictment of unregulated/poorly monitored hedge funds (ie., they are regulated, of course, but internal procedures apparently did nothing to prevent the fact that business as usual at SOME - not all - meant regular insider trading in the normal course). This is very recent. The impact on small, two-bit investors (you and me) is enormous when stuff like this trickles down.</p>
<p>However, i agree with you (I think this is what you’re saying) that the SEC is really trying hard to stay on top of illegal (and by it’s nature, of course, unethical) practices. I also agree that, in my experience from the 80’s anyway, which is narrow by it’s nature since it’s only my experience, fraud was hard(er) to hide.</p>
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<p>Some of us actually work in ways that help companies develop and market goods and services so that the financiers have something to finance. I don’t “condemn” Wall Street, but I don’t see what’s so preferable about being the person who moves money around compared to the person who actually develops and innovates something of value.</p>
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To be fair, “something of value” is very much in the eye of the beholder.</p>
<p>[Is</a> Hedge-Fund Titan Steve Cohen Going Down? | Vanity Fair](<a href=“http://www.vanityfair.com/business/2013/06/steve-cohen-insider-trading-case]Is”>http://www.vanityfair.com/business/2013/06/steve-cohen-insider-trading-case)</p>
<p>The SAC fiasco is a prime example of everything wrong with how regulation works. Are their bad apples at SAC, yes. However, Steven Cohen has been watched by the feds for a decade and nothings happened. So far, I haven’t seen any evidence that he himself has done anything wrong. Also, creative research methods (i.e. tracking corporate jets, spying on the corporate headquarters, etc.) are NOT illegal. The only reason why people hate Cohen is because he makes WAY too much money (i’ll admit to that) and is possibly the best trader is history. The average investor at his etrade account sees Cohen 30% returns (really 60% before fees) and must think cheating.</p>
<p>Also, how many HFs are doing what SAC is being accused of doing but isn’t being investigated because they don’t beat the market (from the “business insider” article I posted)? Trying to nail SAC because its successful is equivalent to the PGAtour saying Tiger Woods cheated because he won too many tournaments.</p>
<p>Well, he’s either not cheating and never has cheated, so that’s why he hasn’t been caught, or he’s so ridiculously smart at insulating himself (just bring me the best deals, but don’t tell me why the odds are so good, I don’t wanna know), that THAT’s why he’s never been caught. So far.</p>
<p>I don’t think you can deny that the culture of: “succeed way beyond expectations of the norm if you want to keep this job” drives people to cut corners and step over that line in many industries, but wall street (hedge funds in particular) may have more than it’s fair share. </p>
<p>One man’s “creative research methods” (your words) are another man’s violation of insider trading laws.</p>
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<p>Some amount of financial services are necessary for an efficient economy where innovators and such can actually handle financial transactions with customers and investors efficiently. Where people may have qualms about the finance industry appears based on whether they see its behavior is seen as being more extractive or rent-seeking (perhaps based on asymmetric knowledge or power relationships compared to those who need to use it services), rather than just providing the useful service of improving the efficiency of financial transactions and capital markets.</p>
<p>Well, of course it’s necessary. It’s just that there is nothing to finance unless people make, market and sell actual, real products.</p>
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<p>I do not condemn Wall Street as a whole - that would be equivalent to shooting my own foot. My line of work is related to turning biotech innovations into therapeutics, medical devices, and diagnostic products… with the help of VCs and capital markets… :)</p>
<p>I absolutely don’t condemn Wall Street as a whole, nor do I think that the majority of people who work there are unethical (there are some unethical people everywhere). I do think people mostly work there for reasons other than ethics and I don’t think it’s “one of the most ethical places to work” although that does not mean that there aren’t plenty of great people there being ethical.</p>
<p>I work in a non-profit. I was really looking for mission driven work, and I love it. That said, I work in development and I know well how much we need our generous ibankers and hedge fund managers to help us be able to do the work that we do. We have some great donors who contribute quite a lot of time and money and they are certainly under no obligation to do anything.</p>
<p>I’m not condemning anybody, though. I shared the story of my friend as one person’s motivations.</p>
<p>Been holding off commenting on this thread, as I decompress after ‘retiring’ from this world nearly 2 months ago…</p>
<p>Like everywhere in this world, there are people in and around Wall Street who would sell their mother to make another $ and there are people with the highest ethics out there. </p>
<p>What drove me out of fixed income 6 years ago was the presence of the hedge funds in the unregulated credit default swap (CDS) market. In many bonds, there was 10+ times volume of CDS than cash bonds. Traders would make a big bets and then post they were looking to buy/sell the cash bond at a spread that moved the CDS even more. It was a game that everyone played. Forget the nonsense that results in the GFC, if you were in the market, you knew it was a house of cards and not a matter of ‘if’ but ‘when’. </p>
<p>I dealt with SAC people and wouldn’t turn my back in their presence and never voiced an opinion on the investment. Bank loans are another unregulated market that the hedge funds jumped all over, as SEC rules don’t apply since they are not securities. </p>
<p>You need a thick skin to last on Wall Street and I just couldn’t take it anymore…</p>