I Think We've Got the Wrong Sin City

I suppose Las Vegas' title of "Sin City" is well earned. People have put a lot of time and effort into the partying that has gotten it that name, so I don't want to strip them of their tightly lightly.

However. I'd like to nominate Wall Street for the title of Sin City. I know it's only a part of a city, but I believe it looms large enough in the world's imagination to be considered a city. Whatever it's actual status as a city, Wall Street has enough bad behavior to make Las Vegas strippers blush. I'd like to thank
Satellite Sisters
and
This American Life
for giving me the evidence I needed to make this nomination.

I learned from Julie, or maybe Liz, Dolan, that the CEOs of Fanny Mae and Freddie Mac will receive a combined severance package of 23 million dollars! Did you catch the word severance in that last sentence? They are being paid 23 million dollars to go away! They are being paid to go away because they and those who work for them nearly crashed the entire world's financial markets. That has got to be the craziest business thing I have ever heard, except that it sounds vaguely familiar. I think that the CEOs of the big telecom companies that crashed a few years ago walked away with a lot of money as well. How is that not a crime?

I also learned, from Alex Bloomberg, that Paul Cox, who is the head of the Securities and Exchange Commission, Wall Street's police department, doesn't think that he needs more regulations to help prevent the kind of melt downs we're seeing today, nor does he need more money to enforce the regulations he's got to work with now. I heard him tell the Senate Committee that was offering him both of those, "No thanks." If you want the title of Sin City, having a police department that's not interested in enforcing any laws should go a long way towards earning you that moniker.

It sort of seems like there is an active, intentional campaign to steal Las Vegas' nickname because Wall Street insiders have even given some of their shady practices seemingly dirty names. The two that I learned about this week are "Asset Stripping" and "Naked Short Selling." The best that I can understand it is that Asset Stripping is when you buy a company, fire everyone, and sell off everything else and hope to make a profit. You do this without concern for the actual humans involved in the company. Naked Short Selling seems even more criminal to me. This is when a broker sells a stock that he thinks is going to drop soon, then when it does drop, he buys it back and makes a profit. The sneaky thing here is that the broker sells stocks that he doesn't even own! The practice grew out of regular short selling which involved borrowing the stock that showed promise of dropping, then selling it, then buying it back, then returning it to the person from whom you borrowed it. Somewhere along the line the brokers went naked and dropped the borrowing step. How do these people sleep at night?

So, while Las Vegas sure makes a flashier Sin City, what with all the lights and the sparkly tassels, I think that Wall Street certainly has a fighting chance of stealing the title. Stay tuned....