Morgan Stanley's report steals the thunder from Merrill and its Street bed buddies for a short time and I can't help but wonder what nefarious schemes have contributed to this latest round of plus-sized profits. The pattern of obscene profits followed by equally obscene tales of corporate abuse is well documented thus far. Kellogg Brown & Root and the war contractors, Exxon and the oil oligopoly, Enron and the energy bandits - the list goes on. Behind every season of windfall profits lay the machinations of the smart (or just plain greedy) money.
The latest in this pitiful white collar collusion: Countrywide and its sub-prime pals. I saw first hand the reckless abandon with which stated income loans (where American business sensibility takes a back seat to those who are markedly dishonest with their credit) were lobbed to unqualified investors. After all, if brokers are motivated by commission and are not held accountable for structuring bad deals, then why care if you put some poor sucker in the whole with a no-money down, negative amortization loan? The banks, after all, are the ones approving the deals.
Watch as the M&A money that bloated the big investment houses this year turns out to be in bad faith as deals go sour over the course of the next year or two.
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