STOCK MARKET WATCH -- Wednesday, 25 July 2012

[Demeter]

14. How Wall Street Scams Counties Into Bankruptcy William D. Cohan

http://www.bloomberg.com/news/2012-07-01/how-wall-street-scams-counties-into-bankruptcy.html?cmpid=yhoo.view

...We are told repeatedly that when Wall Street’s deeply flawed incentive system leads to one bad outcome after another, year after year, it will never happen again. Yet it does. And you can add this vital business to the list: The way state and local government officials hire Wall Street firms to raise the billions of dollars their municipalities need to build schools, hospitals, airports and sewers, and provide other essential services.

For some reason, Wall Street never seems to get the message that bribing government officials -- and paying each other off - - to get access to lucrative municipal-bond underwriting business is illegal. Wall Street has never learned this lesson because the miniscule price it ends up having to pay for misbehaving has absolutely no deterrent value whatsoever.

Indeed, what the cartel of the major banks does over and over again to win underwriting business from local government officials, and the way the cartel then sorts out among itself who gets what fees, is a microcosm of a much wider problem of the increasing power that the Wall Street survivors of the financial crisis have over the rest of us...

VARIOUS SORDID TALES OF THE STREET FOLLOW