On paper, a movie about the 2008 financial crisis should have limped out of the theaters by now. Even as Stars Wars: The Force Awakens continues to break modern box office records, The Big Short has showed real staying power in the theaters and in the minds of audiences. And this is a problem for Wall Street.
A film that clocks in at 2 hours and 10 minutes and relies on celebrities to explain what the devil a mortgage-backed security and a CDO is should have been box office poison. Instead, audiences seem to have an appetite for a snappy recreation of the stomach-churning days when Bear Stearns and Lehman Brothers collapsed and nearly took the U.S. economy with them.
Those events may have occurred less than a decade ago but they are starting to feel very real again. With no one left to layoff in the back office, Wall Street is continuing to cut into the sales desks and the trading floor. The market volatility pushed by cheap oil and a cooling Chinese economy are stoking recession fears among analysts and business news talking heads. Want to make a quick profit? License pictures of anxious and forlorn traders and floor brokers to Getty Images. You might make a mint.
And the pharmaceutical price-gouging shenanigans of hedge funder Martin Shkreli dont help one bit. No wonder Bernie Sanders campaign is humming along while Hillary Clinton finds her footing.
In this edition of Traders, I spoke with Lou Carosa, head of equity trading at Wells Fargos wealth management division. He has seen volatility and cheap oil before but as a veteran of Wachovias wealth management team, he has seen what a near collapse looks like, too. He tells us how he trades, what tools he uses and how he keeps calm while others lose their cool. Also in the issue, we look at the promise of Blockchain and its role of clearing trades. Its years away but firms are keeping their eyes on this settlement innovation.
Wall Street, hedge funds and the U.S. capital markets have been a punching bag for a long time. It might be time to reflect on what role it can play in saving its own image. Even as we approach the precipice of another economic slowdown, now might be the perfect opportunity to behave with honor and dignity.
Remember, this is the clients money youre dealing with.
Phil Albinus
Editor, Traders
