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Occupy Wall Street—Report

September 27, 2011

This is a guest post by FogOfWar.

I was originally going to lead with a tongue-in-cheek comment (later in the post now), but then the NYPD did something colossally stupid.  If you haven’t seen it, here’s the video from this last weekend. It pretty much speaks for itself.

There’s a lot to be said about freedom of expression and police overreaction.  I’ve been to see the protests a number of times, and they’ve never been violent and in fact seem pretty well trained in the confines of freedom of assembly in the US legal system.  Using mace against an imminent threat of violence is OK for the police, but the video seems to show no threatening moves made at all (and it runs for a good period before the police attack so it wasn’t edited out).

I’d suggest the NYPD be shown the following video (taken from the protests in Greece) to demonstrate when things reach a level where force might be an appropriate response. Note that the crowd is attacking with sticks, Molotov cocktails and a fucking bowling ball.  In contrast, the NYPD appears to be pepper spraying people for just holding signs and walking down the street.  What the fuck?

There are maybe a few hundred people consistently protesting at “Occupy Wall Street” for about 10 days now.  It’s got a definite crunchy vibe to the center.  Drumming and Mohawks are mandatory:

But also a (growing?) contingent of more mainstream participants like this one:

Here’s a crowd shot for scale:

And some people painting signs:

And then of course, there’s the dreaded “consensus circle”:

It’s hard to tell what they really want to happen—this was up at one of the information booths (but then down the next time I went):

Misspelled “derivatives”, and there are some things on that list that are spot on and then others that are just weird and irrelevant (DTC?  Really?). I don’t think you can hold that against them though.  I work in the industry, and I’ve been spending the last three years thinking about this stuff and I still find it confusing and hard to come up with a cohesive plan of what I think should be done.  At least these people are doing something, even if it’s a bit incoherent at times.

I have to end with my all time favorite sign from the protest.  Someone was looking for good cardboard and inadvertently came up with the following:

“Delicious pizza to pay off the taxpayers”.  Now that’s a slogan I think we can all rally behind!


Categories: #OWS, finance, FogOfWar, news, rant
  1. Richard Séguin
    September 27, 2011 at 10:42 am

    “Jaw dropping” comments by a trader on BBC:

    It doesn’t surprise me though.


  2. FogOfWar
    September 27, 2011 at 12:01 pm

    No jaws dropped on the trading floor. One of the first lessons of trading is “never bet on what you want to happen, always bet on what you think will actually happen”



  3. September 27, 2011 at 12:07 pm

    Surprisingly honest opinion, and I agree with him; not the part about dreaming about a recession, but rather the message that ignoring this doesn’t mean it will go away.


  4. September 27, 2011 at 10:34 pm

    Its about everything unjust about our current status. The reason it seems vague is because there is that much we need to change! I cant understand how everyone wants a clear cut demand. The demand is we the people want our freedom. If I have to elaborate on what freedoms; clearly you live under a rock. Everyone of us has seen, or felt the persecution from our government / Bankers!


    • FogOfWar
      September 28, 2011 at 12:21 pm

      Insulting someone who just wrote a post on your side isn’t really the best way of attracting followers. I don’t live under a rock, and I am sympathetic to knowing something is wrong even if you don’t have all the answers to fix it, but you should own it and strive for clarity in the face of very complex issues.



  5. September 28, 2011 at 4:37 am

    Actually the ubiquity of camera phones provides a good check on both police and protesters these days although I am unsure if either group has quite realised how likely it is that any misbehaviour on their part will turn up on youtube.

    Anyway, the protest in New York were a tea-party. We had proper riots within a few hundred yards of my home in London recently :S

    I think some key questions regarding the current economic predicament are:

    Do the leaders of financial institutions understand that they are permitted to function by the wider society and that they need to rebuild trust? Do they have any idea how to do so?

    Is the ratio between executive pay and pay for the cleaners who clean their offices too great? What about the comparative rates of increase in pay?

    At least part of the problem is that (real) pay rates in the the US and Europe must fall as pay rates in Asia rise. If chief executives etc continue to insist on their pay rising as fast as ever, the fall in pay rates for more lowly workers will be greater.

    I believe that their is an optimum level of pay inequality for growth. If the inequality is too low or too high, it reduces incentives. The too much equality case is obvious – you don’t get rewarded for innovating. The problem with too much inequality is that you cannot get to be a little better off by making a small innovation; you either get to the top or you don’t.

    At least part of Greece’s problem is that they have a culture of tax evasion; only those too poor to afford a good accountant pay tax. Consequently the relationship between the size of the Greek state and the size of the Greek economy

    Moving on to the trader’s comments, they are accurate. The people who made the most money from the 1930s recession were those who bought good assets as bankrupt stock near the bottom of the market. The fault with the reasoning is not to understand that social instability and war are also consequences of recession (in the case of the thirties, you can argue about the extent to which the second world war was a consequence of the recession, and to what extent they had common cause in the financial terms of the settlement of the first world war.

    But the trader’s view cannot be modified to reflect that the money he makes will do him no good unless he survives to spend it, because the markets cannot recognise externalities (consequences of a trade for a group wider than just the buyer and seller). It is the job of government’s and regulator’s to modify market behaviour to allow for these externalities, but they do not do so well (possibly because it is impossible).


    • FogOfWar
      September 28, 2011 at 12:26 pm

      Lot of good stuff there.

      Here’s a question for us: if you were a spokesperson for the protest, what specifically would you request be done?

      I’ll start with an old favorite: reinstate Glass Steagall. By no means sufficient, but think (for a number of reasons) it would be a step in the right direction.



  6. September 28, 2011 at 8:04 pm

    I think that the nature of investments need to change. People see them as relationships between money now and money in the future, but they don’t really take the responsibilities of ownership while they are holding the shares or commodities in between. worse still, they use synthetic derivatives so that they are never actually owners of the things on which they nominally bet.

    I would like to see (1) an end to limited liability – if you own shares in a company you own it, you are fully responsible for its actions, you should be fully liable for the consequences of those actions (and you should be prepared to fire reckless executives even when they are winning, if you are uncomfortable with the amount of risk to which you are exposed) (2) Shareholders should be required to vote on all AGM motions. Where the shareholders are themselves multi-person entities like pension funds, the should be required to consult their members about how to vote

    Unfortunately, my suggestions don’t deal with derivatives. Perhaps we could require the writers of such contracts to hold the underlying assets when the contract is written. Perhaps we could require that the margin calls be in the underlying asset, not in cash. I don’t have a good answer yet.

    Another thing my suggestions don’t deal with is fraud. Current criminal law covers what happens to the perpetrator of fraud when they are caught but usually, by then, the defrauded money is long gone, and the consequences for both the direct victims and the wider economy can be severe.


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