Because opacity and rigged markets produce the desired goal of enriching the one percent who now own 44% of the wealth of the nation. ...

January 3, 2008 | How Wall Street Evolved from a Trading Epicenter to an Offshore Manufacturer of Black Holes | The Free Market Myth Dissolves into Chaos | By PAM MARTENS

With each new revelation of multi-billion dollar losses from the largest Wall Street firms, there has been this nagging question as to how these Masters of the Universe got stuck with these massive write-downs. Isn't Wall Street supposed to execute trades for others; not build huge inventories of toxic, non-trading securities for themselves?
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How could a layered concoction of questionable debt pools, many of dubious origin, achieve the equivalent AAA rating as U.S. Treasury securities, backed by the full faith and credit of the U.S. government, and time-tested over a century of panics, crashes and the Great Depression? (Despite the political rogues that come and go in Washington, we, the American people, show an inordinate and historical willingness to suffer fools and still pay our income taxes for the greater good of our fellow citizens. It doesn't hurt either that, in most cases, the tax is removed from our paycheck before we get it.)

How could an opaque instrument made up frequently of more than 100 hard to track pieces be safe enough for pension funds, insurance company funds and, disguised as commercial paper, stashed to the tune of over $50 billion in Mom and Pop money market funds?

How did a 200-year old "efficient" market model that priced its securities based on regular price discovery through transparent trading morph into an opaque manufacturing and warehousing complex of products that didn't trade or rarely traded, necessitating pricing based on statistical models?
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The danger with Alice in Wonderland securities concocted by the invisible hand of a rigged machine, is that all it takes to start a panic is for some sober looking types in scholarly garb to step into the public square and yell "the Emperor has no clothes!"
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Efficient markets need transparency and alert cops on the beat. Why is that so difficult to achieve? Because opacity and rigged markets produce the desired goal of enriching the one percent who now own 44% of the wealth of the nation. This one percent, in turn, keeps Congress on a short leash by holding the purse strings to campaign funding.

Wall Street is a two-sided market. The Wall Street firms' losses were another party's profits. Until we know where and how these profits were booked and the details of how the losses occurred, we are choosing to be the idiots of crony-capitalism. We are choosing to hand our country over to the robber barons. ...