Economic Warrior's Blog

Economic Warrior is delighted to interview John Perkins. Perkins,  an economist and activist, is  internationally known for his  startling expose’  of international corruption in his book, “Confessions of an Economic Hit Man”. His book spent over 70 weeks on The New York Times best seller list, and sold over one million copies and been translated in  25 languages. In spite of this phenomenal success–the mainstream media in the U.S. has ignored Perkin’s work, as it unveils the ties between American banks, corporations, our government,  the World Bank and the International Monetary Fund’s role in plundering countries in Central & Latin America, the Far East, Africa and so on.  

Topics discussed; the book Confessions of an Economic Hitman, international corruption, US banks and corporations, the book Hoodwinked

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In a latter book, he wrote “The Secret History of the American Empire”, and zeroes in on hot spots around the world, drawing upon interviews with other hit men, CIA-sponsored assassins, jackals, businessmen, government officials and activists–analyzing the current geopolitical crisis. In his latest work  “Hoodwinked”, Perkins reveals why world financial markets imploded and what we need to do remake them.  You can find out more about John and his work by visiting www.johnperkins.org  or his non-profit passion, www.dreamchange.org .

Programmed  trading, the trading of stocks, bonds, derivatives is a core strategy in The Casino Age, whereby computers using algorithms written by humans, drive much of Wall Street activity today. It has created a larger form of hubris, which believes the power of a computer and the software that runs it, can create  investment intelligence more than human and make money without working for it. If anything, as the second quarter of 2010, where the market has lost 10% of its value, reminds us that no computer can predict the future. Financial alchemy, in the final analysis, is just a guess, it may work for a time, but never consistently. Never.

Nevertheless, programmed trading is still a major platform strategy in virtually every financial institution.  People are still trying to make gold out of lead in the stock market. Common sense, discipline, hard work  and street savvy research has been thrown out the window more often than not as banks, hedge funds and money managers of all stripes embrace the “quants” and their beloved computer programs to make investment decisions which affect all of us.  The same tricks were used in the 1920s, but back then they used slide rules. Eighty years later, we use super  computers and software, but financiers  still pursue financial alchemy. You  see it in commercials for everyman,  where mutual funds outfits embrace tactics such as “back testing” and three-D visuals.

The Economic Warrior did not realize how mutual funds, the savings plans for everyman, used Robot Casino Capitalism, on steroids. In The Wall Street Journal, it was reported today that AXA Rosenberg Group LLC, which helps run programmed investments for mutual fund companies such as Vanguard and Charles Schwab–as well as for pension funds, announced a “coding error” in its computer driven trading strategy, which amongst other things, led to a decrease in assets from $62 Billion to $41 billion for AXA Rosenberg.

At Vanguard, AXA Rosenberg manages pieces of Vanguard Explorer Fund, Vanguard Market Neutral and Vanguard U.S. Value Fund. Vanguard stated  it is evaluating its relationship with AXA Rosenberg.

On the other hand, Charles Schwab announced it would liquidate four of its Laudus Rosenberg funds, which closed itself to new investors when it was disclosed it was involved in a coding error.

Dan Culloton, an associate director of Morningstar commented, “just how hard it can be to evaluate some of these black-box type operations.” Financial alchemy, robot casino capitalism. When will it all end? It is all about them, it is all about turning lead into gold.