We're all adults here, and we all know what it means to "game the system."

 

Virtually no one complains when consumers do it -- like when people with great credit scores roll their balance from one 0-percent card to the next and the next, sometimes for many years.

 

On the other hand, if you want to hear howls of loud complaining, talk to any group of people who feel like others have gamed them -- when gas was $4 per gallon, for example, what was the first thought that came to your mind when you heard the words "oil company executive"?

 

Which in a roundabout way brings us to AIG, and its Band of Merry Counterparties: Goldman Sachs, and Merrill Lynch, and Bank of America, and Morgan Stanley, and Societe Generale, and Deutsche Bank, etc., etc., etc.

 

Their other problems aside, these titans of finance have proved forever that when it comes to gaming the system, there IS a difference between amateurs and professionals. Shrewd consumers may shuffle their credit cards around for extra travel miles or to carry debt at 0 percent, but the big boys ran a game that operated several orders of magnitude higher.

 

They used AIG as a drop-box to milk even more billions of dollars from taxpayers. And until this week, they apparently believed they could do so anonymously. In the same way that Madoff has rewritten the history of Ponzi schemes, the Merry Counterparties have redefined what it means to game the system. It's happening right before our eyes.

 

Once the bear market began a lot of public anger would likely have focused on AIG and the Merry Counterparties, even if they had behaved themselves. But, instead, their conduct is so egregious and the public so angry that AIG (et al) have made possible something the Devil himself could only envy: Eliot Spitzer has reappeared to offer commentary on the scandal in print and via interviews. This comes exactly one year after Spitzer himself resigned as Governor of New York, after a federal wiretap revealed his ongoing relationship with a high-priced prostitute.

 

This afternoon's headlines say that the House of Representatives passed a law imposing a 90% tax on bonuses at firms that take government bailout money. It's getting ugly out there. It's hard to keep up, never mind get ahead. Was all this even imaginable three or four years ago? It was in at least one person's mind:

 

"Banks are leveraged so greatly that the slightest retrenchment in property prices will precipitate an unprecedented downward spiral of evictions and property sales, and then will come the bank failures....we fully expect to see bankruptcies, bond defaults, the evaporation of pensions, unemployment, bank failures, economic collapse and depression ... The public’s anger and dismay will be tremendous because its current expectation of business as usual is the complete opposite of the reality that’s coming."

 

That's from Bob Prechter in his Elliott Wave Theorist in October 2005. If you want to keep up with (and even get ahead of) today's trend, why not read what he's saying now? Click here to learn more.