What Business is Wall Street In Anyway?

That was the question that Mark Cuban—yes THAT mark Cuban was writing about when I opened my Seeking Alpha alert this morning in my email. It is a well written and gets right to the heart of the current problem in the financial markets. I highly recommend it to you so read it.[1]

That there is volatility in the financial markets is not new news.  That technology enables speed and efficiency in executing trades is good news.  That the two conspire with all the unintended consequences we fear should be enough to provide a warning to all that we need clear rules for investing and different rules, as Mark Cuban suggests, for trading to make sure everyone knows which is which in any transaction.

The trade press reported recently that JPMorgan (JPM) and Goldman (GS) reported a loss-free first quarter for their trading units, JPM averaged a daily profit of $118M and GS earned $25M daily profit.  But the profits just paint a target on the backs of these firms and encourage the Administration and Congress to continue funding their insatiable appetites for spending with bank taxes knowing that even proposing such taxes is sufficient to reap HUGE political contributions.

How is it possible that these big firms have honed the technology to such precision that while the rest of us sweat through daily market volatility they score a perfect game every time the umpire yells ‘play ball’?

Don’t get me wrong!   I am not one of those redistribute the wealth disciples, but I do think we need to revisit the rules of the road for investing, trading and other financial lines of business to restore transparency and confidence in the markets.  But my instincts tell me we’ll be better off waiting until after the mid-term elections to tackle that problem.


[1] http://seekingalpha.com/article/204160-what-business-is-wall-street-in?source=email