21 Feb 2012

Reformed Broker on the Financial Virtues of Entrepreneurship, Bankruptcy and...Plastic Surgery?

It's D-Day for Greece, at least that's what the headlines say. Euroone finance ministered are meeting today to supposedly sign off on a 130 billion euro "bailout." We are used to this...back and forth...back and forth. So instead of being pulled by the nose wherever the establishment wants to take us, we ask a different question: what does a Greek default have to do with an exit from the eurozone? We do a reality check on the factually false notion peddled by the mainstream and Greek politicians, that if Greece doesn't throw itself onto the alter of man-made depression by signing away its sovereignty and future to the troika, that it must also exit the eurozone, suffer a disorderly bankruptcy of its banking system, and collapse into chaos. Fact is, Greece can default and still remain in the Eurozone.

And although Europe seems to be all the rage these days, we don't want to forget about the good ol'USA, where the debate over the now infamous "Volcker Rule" continues to "spark debate"...Yea right! This is the rule that's supposed to reign in risk on wall street right? This is the rule that was supposed to roll back some of the damage done by the repeal of Glass-Steagal after the merge of Citi and Travelers back in the late 1990's. This is the rule that's suppose to bar the big banks from trading with their own money, which is another way of saying YOUR MONEY. So what's the hold up? Well, Wall Street is crying, and usually, when wall street cries, uncle sam listens. Only this time, the battle has been joined by Occupy Wall Street (actually, by Occupy the SEC to be exact) which has produced a 325 page letter breaking down how and where the Volcker rule is being watered down and how it can be strengthened. One of the group's members, Alexis Goldstein, was recently on MSNBC making some GREAT points about the fact that there are so many other financial institutions or even financial start-ups that would love to have a piece of the market now controlled by a 5-firm oligopoly of Wall Street's biggest banks. The banks constantly tell us that any attempt to regulate them or break up their cartel would adversely affect "liquidity" and hurt the broader economy. Really? Maybe they mean it would hurt them, and their ability to make outsized profits at the expense of everyone else. So maybe this isn't about saving capitalism and free markets. Maybe this is about anti-competitive practices that the banks engage in by hook or by crook (or maybe just by crook) because they are just too big, too fat, and too old to move in a free market. We will speak with Joshua Brown, founder of thereformedbroker.com, to get his take on all of this. We will also ask Joshua what he thinks of the hemline indicator, the boob indicator, and what the deal is with indexing social mood.

And lastly, Alyona will be joining the crew of capital account today at the end of the show to give us her take on squashing innovation -- since we are on the topic of entrepreneurship and free markets. Ryanair has brought a lot of innovation and entrepreneurial thinking to an airline industry almost as fat and anti-competitive as wall street, with a combination of super low fares and certain flare when it comes to eye-catching advertising. Some of their latest ads are banned in Britain now. Are UK regulators unfairly crushing competitive edge??