Privatize Losses. Socialize Gains.

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Following the close of another miserable day for traders and equity markets, Bob Pisani noted in his comments on CNBC.com, that due to “Less Business, Less Pay and Less Reward”, that Wall Streeters are thinking about getting out altogether.

So here is is what I am reading into this whole mess. Wall Street wants to offload all those worthless and toxic debt instruments that they created to Main Street, and are now concerned over dramatically limited compensation for executives and management! Oh, and did I mention that the two remaining investment banks, Goldman Sachs and Morgan Stanley, now want to convert from an investment bank to a commercial bank.

I think that the smartest comment that I have heard in the past 72 hours came from Tom Barrack, Chairman and CEO of Colony Capital. Today I caught his short interview on CNBC.  He talked about how Colony Capital was formed in 1991 to acquire commercial real estate assets from the Resolution Trust Corporation. He commented that “we need to privatize losses, and socialize gains” and not “privatize gains, and socialize losses.” 

I could not agree more.

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