Bill Cohan: Wall Street Is A Cartel And Has Been Since The 1940′s

Monday, January 9, 2012
By Paul Martin

Ben Walsh
BusinessInsider.com
Jan. 9, 2012

After most recently addressing his ire at the mental instability of the executives running Wall Street’s major institutions, Bill Cohan this week examines the shrinking competition among the largest Wall Street firms and makes a well-argued case that it represents a pattern of behavior stretching back to the 1940′s.
Specifically, Cohan dissects a 1947 anti-trust case that was brought against 17 firms for colluding to set prices for investment banking services.

While the suit was thrown out in 1953 for what a judge deemed undue reliance on circumstantial evidence, Cohan thinks the government’s argument “was spot on”:

The investment-banking business was then a cartel where the biggest and most powerful firms controlled the market and then set the prices for their services, leaving customers with few viable choices for much needed capital, advice or trading counterparties.

The same argument can be made today.

Using a term associated with drug lords and OPEC, Cohan argues that because the financial crisis drastically reduced the number of top-tier investment banks (you can’t even name 17 ‘top-tier’ investment banks today), and with it the decreased the modicum of competition they engendered, “the investment-banking business is an even more powerful and threatening cartel than it was in 1947.”

The Rest…HERE

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