Galleon Paid Hundreds Of Millions Annually For Information

Well, this Galleon probe has turned into a doozy. Supposedly the firm spent $250 million - often much more - annually, obtaining information that would give it and edge. Information not available to the general public. This is reminiscent of the time leading up to the collapse in the Great Depression where manipulators of stock pools and bucket shops scammed investors. Wall Street's fraud is endless and just about the only constant fixture in American history. Its power and corruption needs to be busted up. Forever. As we have highlighted before, a distributed electronic capital model would serve democracy substantially more efficiently. And take the innovation and creation away from capital gatekeepers on Wall Street and put it into the hands of those who deserve it - the creators of capital.

This mess highlights how important transparency is. As we have remarked many times on here, companies like Goldman Sachs, Citi and others were not successful because they were brilliant, they were successful because they rigged the game.

When anyone pays government officials millions of dollars to nearly guarantee the outcome by rigging rules to manipulate markets, be it Wall Street or defense contractors or insurance companies, you are going to make money. And loads of it. At the same time, you are taking away competition and economic vibrancy. Why? Because you are in the market before the general public and even competitors realize the rules to the game. Or you are forcing competitors out. As the other participants catch on to the rules and seek to participate, you can always be at least one step ahead and leave your competitors holding the bag. I view this as the dynamic that was in play which took down Merrill Lynch, Bear Stearns and Lehman. Goldman was the leader in the game of many exotic debt instruments which took down Wall Street. Other firms were trying to follow the leaders. By the time these firms were heavily into the game, some of the other firms were already on the opposite side of many trades. It wasn't brilliance which put them on the opposite side of the game. It was because this is a rigged scam.

We need complete transparency into markets and Washington. Our economy will eventually heal itself when this dynamic is dealt with.