In a recent article by Bloomberg, Chris Levett, Clive Capital LLP’s top-earning partner, made $33.5 million in the last year through February even he lost money for clients two years running. The most notable of his losses goes back to the 2011 oil crash when he lost $400 million in a single week. That year, he banked $3.6 billion.
In the wake of his new book’s release, Les Leopold has had a number of interviews with the likes of AlterNet and Ring of Fire Radio with Mike Papantonio. The crux of Leopold’s book, “How to Make a Million Dollars an Hour,” focuses on the inverted nature of production compensation in the American economy. Meaning, that instead of the instinctive thought that monetary earnings are based on the amount of tangible goods or services one produces, the richest people are the ones who produce nothing. Much like Levett.
Leopold compares the earnings of A-list movie stars to hedge fund investors and indicated that the most popular actors earn an average of $21,000 an hour while hedge fund people pull in a “whopping $843,000 an hour.” But, for what? At least the actors in Hollywood produce something tangible that can be commodified, but these hedge fund mongrels get (because they certainly don’t earn a dime) money through corrupt practices.
One such practice, though not widely-known, is called high-frequency trading. On Ring of Fire, Leopold describes it as when brokers “set up their computers . . . right next to the stock exchange and get the feed, the information a few nanoseconds faster than everybody else. Then with that information and given what you’re going to do, they see that faster than everybody else.”
With that sort of fast access to stock information, that allows the brokers to buy stocks and immediately resell them to purchasers on home-trading websites, like ETrade, “for a few pennies more.” Have the brokers collectively do that a million times over, and they are able to generate billions of dollars off of everyday, working-class home traders.
And now the salt on the wound. During the so-called “recovery,” Leopold pointed out a disturbing figure. While the wealthiest 7 percent netted about $5.6 trillion (yes, trillion), the working class, Main Street workers and families actually lost $669 billion. Thus, the cycle continues.
Wall Street criminals and scam artists benefit from cheating the American financial system, while honest people, making hardly livable wages, are suffering and losing money.
Joshua de Leon is a writer and researcher with Ring of Fire.