Wall street is evil to it's core but never forget that it gets it's orders from the 'City of London.' Not London, but the tiny part of London known as the 'city of London,' where even the Queen has to ask permission to enter.

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“The creation of the mortgage bond market, a decade earlier, had extended Wall Street into a place it had never before been: the debts of ordinary Americans.”

– Jared Vennett (played by Ryan Gosling), The Big Short (2011)

Wall_Street_Sign_(1-9)Along with another superbly authentic movie “Margin Call” (2011), “The Big Short” provides a vivid look into the rigged, Darwinian, ruthlessly exploitative circus popularly known as “Wall Street.” For decades, ever since the great depression, this industry slumbered along, sedately providing financial services to Americans. As always, it also was a venue for legalized gambling, but the number of players were limited, the winnings were relatively meager, and the opportunities for corrupt manipulations had not yet been multiplied by new trading technologies. Back then, the seedier aspects of Wall Street were overshadowed by the many vital services the industry provided. All of that changed starting around 1980.

In 1985, the financial sector earned less than 16 percent of domestic corporate profits. Today, it’s over 40 percent. These profits are made on the backs of American consumers who pay usurious rates for student loans and credit card debt, yet cannot earn more than a 1 or 2 percent on their savings accounts. America’s financial sector is grotesquely overbuilt, it has become a predatory force in the lives of most Americans, and the legitimate services as intermediaries that they actually provide – especially given the gains in information technology over the past 30 years – could easily be delivered for a fraction of the costs. Who benefits?

The Big Short offers insights that will hopefully resonate with viewers, because when the protagonists in the film prepared to capitalize on their belief the housing bubble was about to collapse, they identified all the culprits. It wasn’t just the sellers who prepared mortgage debt securities who were to blame. It was the buyers as well. And the biggest buyers of all were the pension funds, because of their insatiable desire for high returns.

America’s housing bubble may have collapsed, but the pension funds are still with us, bigger than ever, still insatiably seeing high returns. And where do these predators go for their high returns? Along with their high risk investments in hedge funds and private equity – where we have minimal transparency – they invest in housing, once again inflated to unaffordable levels thanks to over-regulation and low interest rates, they invest in public utilities, who collect guaranteed fixed profits on overpriced services thanks again to over-regulation, they invest internationally, and they invest in domestic stocks.

In every case, the interests of these powerful pension funds, Wall Street’s biggest players, is to rack up another year of high returns. And to do this they need corporate profits, financial sector profits, rising home prices, rising utility rates – they need asset inflation fueled by debt accumulation. This is economically unsustainable, because as America is slowly turned into a debtors prison, eventually there will be nobody left to pay the interest.

The National Conference On Public Employee Retirement Systems, “The Voice for Public Pensions,” is arguably at the apex of the unsustainability lobby. This powerful trade association is ran by public sector union executives from across the nation. Their president is also the treasurer of the American Federation of Teachers. Their first vice president is a 30-year member of the Chicago Fire Fighters Union, IAFF Local 2. Their second vice president was union president of Fraternal Order of Police Queen City Lodge #69. And so it goes, officers of government unions populate their executive board officers and their executive board. Government unions run this organization.