Wednesday, May 11, 2011

Hint: the reason the public lost confidence in the financial markets wasn't because of people like Raj Rajaratnam... and thus, and counter to the assertion of this clueless business reporter, his conviction isn't likely to do anything to restore our confidence in those markets.

There are a couple of reasons we lost confidence in the financial markets.

One is that stuff we had bought - stocks, bonds, houses - was suddenly much less valuable than we were told the stuff was worth when we were being pushed to buy it. And Raj Rajaratnam had nothing to do with that.

Second, we saw those working on Wall Street not only being allowed to keep their jobs and their bonuses... but being given access to hundreds of billions of dollars of taxpayer money to help them do so. And Raj Rajaratnam wasn't one of the guys we were reading about.

One thing we weren't worried about is whether some guy was bribing people to give him a heads-up so he could buy or sell in advance of the general public.

We know people like this exist, they have for a long time and notwithstanding today's conviction, will continue to do so. And while we might not like what they're doing, their actions are a pimple on the rear of things that we worry about.

So it's well and good that the feds caught some crook and got themselves a conviction. Hopefully, these prosecutors will have done so properly, unlike prosecutors in other high-profile cases.

But there is no one - absolutely no one - that is now thinking this conviction is a reason to plow some money into the markets.

Other than the clueless business reporter, that is.