Home > OWS: Want To Really Clean Up Wall Street? Here’s What Your Demands Should Be (XLF, FAS, SKF, FAZ, BAC, C, JPM)
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OWS: Want To Really Clean Up Wall Street? Here’s What Your Demands Should Be (XLF, FAS, SKF, FAZ, BAC, C, JPM)

November 20th, 2011

Shah Gilani: Dear Occupy Wall Street Demonstrators, Let me start by saying that I applaud your initiative. Grassroots protests are the essence of democracy. And as we’ve seen with the Tea Party movement and the Arab Spring, nonviolent protests are a powerful way to effect meaningful change.

Yet even though I’m 100% behind you in spirit, I can’t fully support your cause.

Don’t get me wrong, I want to join you. But I can’t - not yet, anyway.


And the reason why I can’t support your ultimate goals is a simple one: I don’t know what they are.

So how about this? I’m going to tell you what I stand for. I’m going to tell you what my goals are. If you agree, then we can stand together. And I won’t wait another minute before joining you whenever and wherever I’m needed.

So here it goes.

The reason I’m already leaning towards your side is that the fountainhead of your disgust seems to be “Wall Street.”

Now, I don’t know what Wall Street means to you. But to me, it means all the crony capitalists and market manipulators whose calculators and spreadsheets say the present value of their self-serving greed is worth discounting all of America’s future.

That’s the Wall Street that I’m committed to fighting – the Wall Street that’s littered with greed and corruption.

But to me, the “Wall Street” we’re fighting against is not synonymous with capitalists. The enemy we share doesn’t include the entrepreneurs and self-starters that have built this country up brick by brick.

So if you think socialism is better than capitalism, you can count me out. If you think that redistributing earned income from hard working Americans to support lazy, self-indulgent, able-bodied crybabies is fair, count me out. If you think that making a lot of money, fairly and honestly, is un-American, count me out. And, if you’re thinking about violence or destroying other people’s property, count me out.

But if you’re mad that Wall Street money has bought our Congress; if you’re mad that there’s an oligarchy of banker puppeteers pulling the strings of the U.S. Federal Reserve; if you’re mad that Wall Street is hell-bent on toying with the stock market and turning the screws on fixed-income investors, parents, and retirees to expand their profit margins; and, if you are mad that “too-big-to-fail” banks can wreck the economy and get bailed out, only to become bigger bullies while tens of millions of Americans lose their homes, jobs, and retirement savings, then I am solidly with you.

And, if you’re with me, we agree that we need to tear down Wall Street to rebuild Main Street!

That’s where we stand, hopefully united.

Now let me offer up a list – a manifesto, if you will – that you may or may not choose to adopt. But remember, I’m not trying to hijack your movement. I just want to offer some vision and clarity.

So these are the goals I’d like for us all, as fed-up Americans, to undertake:

  1. Break up too-big-to-fail banks so they aren’t threatening our financial system.
  2. Investigate failed banks for fraud, and indict and incarcerate guilty parties.
  3. Scale banker bonuses progressively with long-vesting stock options.
  4. Legislate pay claw-back provisions and criminal statutes for bad banker behavior.
  5. Eliminate volatility-inducing high-frequency-trading and ETF program arbitrage.
  6. Make all derivatives exchange traded, highly margined, and transparent.
  7. Limit credit default swaps to two times the value of at-risk underlying credits.
  8. Mandate exhaustive studies of the potential market impact of newly created financial products.
  9. Create simple, effective, light-touch regulations with heavy criminal penalties.
  10. Cap Wall Street’s political contributions and make them transparent.
  11. Audit the Federal Reserve and limit its lending to domestic banking institutions.
  12. Give the Consumer Protection Finance Bureau (CPFB) criminal indictment powers, including over the Federal Reserve.
  13. Make Wall Street answer to the needs of Main Street, not the other way around.

Please don’t get me wrong. It’s not that there aren’t plenty of other things in the United States that need fixing. I think we’d all agree we need to simplify and “fairify” the tax code, if not throw it out altogether. But, your movement is Occupy Wall Street, so let’s stick to that.

There’s one last thing. I’m certain that with thousands of supporters you’ll find a broad spectrum of ideas and beliefs. That we may be united in belief does not necessarily mean we are all alike.

Take me, for example. In some ways, I am a “Wall Street” guy, and in other ways I am one of the 99% you claim to represent. I want an opportunity to make a good living, honestly and fairly. But, like all of you, like all of America, I am sick and tired of the powerful, moneyed oligarchy that runs America profiteering off the backs of hard working Americans.

That’s why we need strong, transparent and fair capital markets and honest, smart leaders. The two aren’t incompatible.

So what I’m saying is that I’m ready to join your revolution, if you’re ready to accept a Wall Street insider who’s determined to restore the system’s integrity – not destroy it.

And that’s why you’re going to hear more from me every week, as I call Wall Street’s biggest players onto the carpet. And I can promise you this: Some of the indictments I make are going to shock you.

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Sincerely,

Written By Shah Gilani From Money Morning

Shah Gilani is the editor of the highly successful trading research service, The Capital Wave Forecast, and a contributing editor to both Money Morning and The Money Map Report. He is considered one of the world’s foremost experts on the credit crisis. His published open letters to the White House, Congress and U.S. Treasury secretaries have outlined detailed alternative policy options that have been lauded by academics and legislators.

His experience and knowledge uniquely qualify him as an expert. Gilani ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When the OEX (options on the Standard & Poor’s 100) began trading on March 11, 1983, Gilani was working in the pit as a market maker, and along with other traders popularized what later became known as the VIX (volatility index). He left Chicago to run the futures and options division of the British banking giant Lloyds TSB. Gilani went on to originate and run a packaged fixed-income trading desk for Roosevelt & Cross Inc., an old line New York boutique bond firm, and established that company’s listed and OTC trading desks. Gilani started another hedge fund in 1999, which he ran until 2003, when he retired to develop land holdings with partners.


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  1. Lon Morgan
    November 21st, 2011 at 09:28 | #1

    Mr. Gilani:
    Thank you for your erudite commentary. There is an an understandable temptation to use a grass roots movement, such as the OWS, to express contempt for all things capitalistic. After all, it is unregulated, tax protected capitalism unleashed that has brought us to where we are. One is tempted to think of the French Revolution of the late 1700′s whereby the ’99%’ of the time threw the ’1%’ aristocratic bums out.

    I admire your recommendations for implementing change. It is difficult for the average person to understand derivatives, credit swaps and the other convoluted instruments of Wall Street finance. It is difficult to grasp the extent to which our government has become a ‘bought and paid for’ entity, essentially owned by the very entities which you want regulated. A news article this past week highlighted the many newly elected Tea Party freshmen that have already dove into the corporate money trough.

    The only criticism I have of your article is that it relies on our bribed congress to implement the regulations you recommend against the very entities that pays that same congress for not imposing regulations.

    How, in the real world, can we hope to make that happen? Will it not take a literal 2nd American Revolution, a wiping of the slate, and starting over?

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