The Derivative Project

“A Few Beers At Grand Central Station and a Few Four Letter Words”

“A Few Beers At Grand Central Station and a Few Four Letter Words”

We apologize to our readers.  CNBC took down their article from September 2010, “A Few Beers at Grand Central Station and a Few Four Letter Words” summarizing Wall Street’s views towards Dodd Frank and any regulation that would attempt to reign in their business model that ransacked the economy for everyone, yet provided supernormal profits to the few.  It is too bad.  It was a part of the history of media, the financial crisis and Wall Street’s attitudes to block regulation that protect against fraudulent schemes that harm society overall.  CNBC, if you could reestablish the link please contact us at info@thederivativeproject.com—–The Editors at The Derivative Project, September 27, 2014.

Ms. Warren, We Are Glad Your Position is Temporary 

Professor Elizabeth Warren, congratulations on your appointment as Interim Director of the new Consumer Protection Bureau. The Derivative Project sincerely wishes you well and knows that there are several areas that the consumer needs protection.  Once you put in place the necessary rules, we plead with you to take on the real consumer issue that caused the collapse of our economy.  It was Wall Street, but it was not in credit card debt and rogue mortgage brokers, which is what one traditionally does not think of as “Wall Street.”

Education Is the Main Consumer Protection Tool for Credit Cards and Mortgage Debt

Credit card debt and fraud in mortgage lending hurt consumers and must be reigned in.It was the mortgage securitizations, with credit default swaps and fraudulent AAA ratings, that made it all a glass house, hanging on a cliff.  However, consumers do have a way around much of this.  Do not use credit card debt. It is foolish. As any financial planner will tell you, go on a cash basis and pay off the credit card balance monthly.  Only obtain a mortgage from a “well-known” bank, within your means.

It is well advised to get the public school system involved at the first grade level in teaching the basics, then a preponderance of the “consumer issues” of mortgages and credit card debt will go away.  I do not mean to minimize the numerous, abhorrent practices used by many mortgage bankers and banks’ credit card operations.  However, public education at the primary level in public schools can prevent many of the issues, while you focus on tackling a significant lack of legal foundation in the securities industry that will deter future abuses.

Lack of Legal Foundation to Enforce Securities Laws, Hold an “Entity” accountable, as Evidenced by Madoff and the Recent Collapse of our Financial System

This lack of legal foundation prevents consumers from receiving monetary renumeration when securities laws have been broken.  This lack of legal foundation has allowed every AIG executive and Wall Street executive to destroy the stability of our financial system, with no recourse to the consumer.  They got off without even a slap on the wrist and Dodd/Frank has put nothing in place to provide a legal due process for current abuses towards the individual retirement investor and for those future wrongdoings, that might once again destroy the stability of our financial system.

Ms. Warren, this is Where Consumers Need Protection, Where Education Cannot Help, Where Consumers Have No Choice and Have No Legal Due Process

Professor Warren, the little guy, the middle class, the poor, are being destroyed by Wall Street and it isn’t in the credit card and mortgage area.

Here are the Areas that, As Soon As you Finish Your Temporary Assignment, Must be Addressed

Professor Warren, your intellect, your legal background, your determination and your wish to stand-up against Wall Street for the “little guy” with no voice is critically needed in other Wall Street regulatory reform.  Here are the most critical areas, that The Derivative Project will be highlighting over the next several months, because as soon as you wrap up at the CFPB, we desperately need you to take on this most daunting task, that only you can do.

  1. Establish a legal due process for an individual retirement investor, allow a private right of action, if there has been a breach of fiduciary duty under the Investment Advisors Act of 1940, by a SEC registered investment advisor, regulated by FINRA.

  2. Have Congress grant a regulatory entity the capacity to enforce breaches under the Investment Advisors Act of 1940. (Are you aware that if a SEC registered investment advisor, regulated both by FINRA and the SEC “breaks” the law, an individual has no due process and there is no entity currently empowered to enforce the law, the Investment Advisors Act of 1940, since the individual has to go through mandatory arbitration?)  In mandatory arbitration, FINRA states Congress has not yet given them the authority to award claims to those that have been harmed by investment advisors that break the law, the Investment Advisors Act of 1940.


  3. Mutual funds, some mandated by the Department of Labor for certain employees, have no rules regarding derivative positions.  We have shown that greed on Wall Street cannot be left unchecked.  Yes, a ticking time bomb.


  4. Appoint an independent consumer advocate to set-up rules for the trading of bonds for individual retirement accounts, since  the “little guy” is being destroyed in these unregulated markets and they serve a core retirement portfolio position.


  5. Eliminate FINRA as an SRO, that mediates/arbitrates investment disputes.  Move it to the court system and set-up a new investment industry consumer protection bureau.

The Wall Street mystique, the condescending attitude, that “they are above the law” is literally correct.

As a journalist points out in a CNBC article, linked below, Wall Street believes the new Dodd/Frank Bill is incoherent and perhaps thus can be overruled by the Courts.  He has hit the nail on the head.  This is exactly what Wall Street got Congress to do for them, just like in 1940.

As the CNBC article states, what Wall Street now wants,  “We want clarity. It’s hard to plan for your business when you just don’t know what the law means, when it is open to many different interpretations,” he said.

Ironically, this is what Congress and Wall Street have always done, to protect Wall Street.  They pass financial reform that is not enforceable in a court of law.  Tomorrow, The Derivative Project will give a very concise example of this.

Wall Street’s attitude toward consumers is well – represented by this article today by a CNBC “journalist” . This sums up Wall Street, a “few beers at Grand Central Station” and a few four letter words about anyone that dares reign in their obscene behaviors.  Wall Street  knows “darn well” what Congress just passed in Dodd/Frank will not be enforceable in a court of law.

Checkmate, consumer.