The Most Dangerous Stocks In The Market

The brilliance of Wall Street's investment banks is never more evident than through the bonuses at Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS). The arcane and complex world of high finance taught the foreigners to lower Manhattan an invaluable lesson as the dust settled from the market meltdown of 2008. The mighty investment banks cradled along Water and Wall Street are the emperors of everyones money and they have no cloths.

The bright eyed business school graduates joining the ranks of Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) learned the definition of arbitrage at their Ivy League universities as the simultaneously selling of similar securities in different markets to instantly create a profit, and to most interlopers that definition makes one feel to stupid to even ask what it means. The actual definition for arbitrage in 2008 was a simple transaction where 10 tax payers lost a dime and the bankers at Goldman or Morgan made a buck. Wall Street would argue, and over nearly a century their rhetoric was unquestioned, that they are the engineers of capitalism. What we learned last year is that like arbitrage the working end of a trading desk is as uncomplicated as a dice table; a credit derivative is a lot like the dice at a craps table, the players, like American International Group (NYSE: AIG) keep rolling the dice with borrowed money, increasing the size of their wagers as the losses mount and the house, the likes of Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) keep lending the money to play. When it was all said and done American International Group (NYSE: AIG) the former Bear Stearns& Co., the former Lehman Bothers Inc and other less notables simply got drunk at the table and were propped up with the house's money.

When the losses and exposure grew unaccountable through what can be easily termed, bald faced lies by the makers of mortgages and mortgage products, the government stepped in to stabilize the market and stem the worst financial panic in the history of the United States, throwing a trillion dollars at what was a black hole.

Fast forward a year and the bailout money found its way onto the balance sheets of the surviving Wall Street banks. The money that bailed out American International Group and so many others was simply transfered from the taxpayer to those companies who were bailed out, and then after inexplicable bonuses were paid to utter failures of fortune, it was transfered once again to Goldman and Morgan where truly outrageous bonuses were crowned among the brilliant.

There is a steady thunder rumbling on the horizon and the world that Wall Street once knew and loved is coming to an end. Senator Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee is just starting the push to end what is a uniquely American phenomenon of public greed. As the debacle of 2008 continues into 2010 on the backs of the unemployed and middle class it will be impossible to allow the engineers of this global meltdown to pay themselves colossal bonuses that were only made possible by the taxpayers of America. The status quo is changing on Wall Street and the greatest tell tale is that the graduating classes of America's greatest universities are looking for work in a more noble arena. Soon the profits that once drove kingly bonuses will be beaten back the way the wind fall profit tax did to the oil companies.

The giants of Wall Street are on the wrong side of history and are headed in to dangerous water.