Ex Morgan Stanley Exec Caitlin Long Reveals Wall Street’s Hidden Agenda to Destroy Bitcoin
Former Morgan Stanley Executive, Caitlin Long, Reveals Wall Street’s Hidden Agenda to Destroy Bitcoin
It is an open secret that almost all of the major financial institutions of the world today are governed by the interests of a few moneyed individuals as well as other private lobby groups. However, since the advent and widespread propagation of cryptocurrency use has gained traction across the globe, the open bias of the world's leading financial agencies against crypto is now becoming more apparent with each passing day.
In a highly revealing interview with Caitlin Long, a 22-year veteran of the Wall Street stage, the former Morgan Stanley Executive revealed some shocking details as to how private banks are now entering the crypto space and are slowly eroding the fabric of decentralization which essentially lies at the core of every alt-asset.
Ms. Long started her illustrious career at Citigroup, before she moved on and became the managing director at Credit Suisse. Her most recent stint as an executive was with Morgan Stanley, where she headed the firm’s Pension Solutions Group.
The Current Brokerage System in Place is ‘Broken and Faulty’
Speaking about the current state of the global financial sector, Caitlin did not mince her words when she told a reporter at CCN that,
“ The system that we have [right now] is very unstable. It’s not fair to investors, and I’ve learned from experience not to trust my brokerage account.”
She also added that while account manipulation itself is not an issue, there are many other things that go on behind the scenes that investors more often than not, are not aware of. For example, most financial management firms commingle different pools of assets, thus causing the value of various stocks to swing in subtle yet discreet ways.
Another issue that was highlighted during the conversation was the way in which Wall Street settles its trades. Ms. Long mentioned that back in the early 90’s, the entire US financial domain used the T+5 (5 days after trade) settlement protocol— which means that a trade was only accounted for after a period of five days of the transaction being executed. Even today, the settlement standard in place is the T+2 protocol which shows that the market structures in place are quite murky and have some sort of agenda associated with them.
However, right after talking about the aforementioned issue, Caitlin dropped another massive truth bomb by calling out the DTC (Depository Trust Company) by saying:
“Most people don’t realize that if you don’t own the actual paper certificate, you don’t own your securities, the DTC [Depository Trust Company] does. What you own is an IOU, and that IOU is from a leveraged financial institution that might default. So behind the scenes, all of these different institutions that were designed to clear and net settle transactions that gave rise to this settlement delay, those institutions haven’t been done away with, even though the technology problem that created them long ago was solved.”
Ms. Long: “With Bitcoin You Actually Own Your Assets”
Moving onto the topic of ‘rehypothecation’, Caitlin unequivocally opposed the notion of such a shady practice. However, she conceded that since most people do not read the fine prints on their agreements, they unknowingly allow brokerage firms to carry out such unethical activities.
For those unaware of what rehypothecation actually is, it is the process by which banks and brokers, for their own purposes, use assets that have been posted as collateral by their clients.
Elaborating further on this issue, Long mentioned that the Intercontinental Exchange (ICE), the parent company behind the NYSE, is one of the largest financial organizations in the world carrying out this practice on a daily basis. However, when talking about the alt-asset sector, Long mentioned that when it comes to digital currencies “you really do own your bitcoin”.
Over Issuance of Shares is a ‘Very Common’ Practice
Dropping one massive truth bomb after the other, Ms. Long mentioned that,
“The over issuance of shares is also a very common problem that currently plagues the financial industry as a whole.”
She added that,
“Most brokers, clearinghouses and custodians are making money off securities lending since they’re allowed to, and again, it’s in the legal agreements.”
In addition to this, Caitlin also mentioned:
“In most cases, the pensions for these shares have agreed to it or the clearinghouse, the Commodity Futures Trading Commission (CFTC), and FTC (Federal Trade Commission) allow the clearinghouses to do it. What I’ve experienced is that failures to deliver in securities lending can happen on almost a daily basis, especially for something that is a hard-to-deliver security. The market where this happens the most is the U.S. Treasury bond market, and the Federal Reserve actually encourages all of this. It is the means by which the Fed institutes its monetary policy.”
Institutional Agents are “Bad for the Bitcoin Ecosystem”
Addressing the issue of whether established financial institutions are good for the alt-coin sector or not, Ms Long said she believes large custodians can adversely influence the software upgrades of the bitcoin network in the future. So for example, if Wall Street money starts to flow into this nascent space, it would be better if “actual owners of collateral vote with their feet as opposed to a conglomerate such as Bakkt voting on behalf of the entire pool that it controls.”
The SEC is Driven by ‘Ulterior Motives’
Closing out the interview, Caitlin spoke about how most of the rehypothecation taking place today is subtle. For example, the market is currently plagued by the issue of ‘naked short selling’, and even though this practice is illegal, the SEC has not done anything substantial to solve this problem. A case in point is the recent Dole Foods situation where the aforementioned problem was brought into clear daylight in front of a jury but no action was taken by the SEC in regards to the matter.
It is extremely refreshing to see an ex-Wall Street honcho come forth and call out the world's leading financial institutions on their rampant malpractices. As is evident from this interview, a lot of work needs to be done before real economic transparency can once again be reintroduced into this swamp like arena— and it seems like Bitcoin and other digital currencies may just be the way to do so.