Wall Street 2 - Remembering Sept 08 (Part 2 of 3)

Watch Michael Douglas aka Gordon Gekko says, "Greed for lack of a better word is good, greed is right, greed works..... It may not depict the Stock Exchange but certainly some of those involved in its trading.

Humankind had evolved from the nomadic hunters/gatherers into civilised settlements producing a stable basket of food. Harvesting surpluses (due to efficiencies and economies of scale) they created the market and started bartering and selling and buying. Imagine those markets along the Silk Road or the Fertile Crescent sandwiched by the Tigris and Euphrates Rivers! I love going to the markets of the countries I visit. It gets my fingers on the pulse of the nation. These markets later developed into the stock exchanges of today. Wall Street perhaps is the most famous.

In capitalistic societies a stock exchange is a must for investments (big and small) to flow in and out. Its capitalism life-blood. There is nothing wrong with markets. Its in how it is regulated with some hindsight and foresight as well as the will to enforce these regulations. However it can never be perfect. Temptations to steal from companies and the marketplace are strong. Passing off sub-primes to the unsuspecting by masking it with new packaging was just last September news but its impact still reverberate through the economic structure of the world.

Remember the movie named Wall Street released in 1987 where Michael Douglas won an Oscar for Best Actor? How about Gordon Gekko played by Douglas? Gekko was a loose representation of Ivan Boesky who was convicted for share-trading fraud in 1987 and Michael Milken the junk bond king (a kind of sub-prime) who was indicted with 98 counts of fraud and racketeering in 1989. At the height of Boesky's skills he amassed a fortune of USD200 million and appear in Time magazine! The long arms of regulatory enforcement may have purged and frightened the living day lights of that generation. It was good!

But a short decade plus later history repeated itself in cooking up the books and insider trading. Greed and its minions have a short memory. The Enrons, Tyco, Worldcom and Waksal wiped out billions of dollars and thousands lost their jobs. The perpetrators went to jail. The Regulatory was doing their job. It was good.

Then in a short half-decade greed has mutated into something much more sinister - resulting in September 2008 financial meltdown. And then to cap it off the Madoff's scam came to to the fore. Greed has given the Regulatory the slip once again and it won't be the last. Washington wanted adult supervision for Wall Street. Will new pre-emptive laws treat greed? I doubt so.

We may have a chance to re-live September 2008 ala Hollywood-style. Next year in April, the sequel to Wall Street the movie, will be released. Dubbed Wall Street 2, it is in production now. Douglas will reprise his role as Gekko. Will there be another memorable line? Like, "Greed is good, but don't get caught!"