Reminds me of that pensioned guy here in Belgium that put all his savings, about 2 million dollar's in Lernhout & Hauspie, the Belgian speech recognition company. He bought it almost right at the top, when everybody was screaming on the streets that this was the golden egg. He kept his shares till the end and lost every- thing.... "When your housemaid is telling you that she bought shares, it's time to sell those shares or maybe short them if you don't have them..."
There are several things that bother me about what has not and will not in my mind ever take place in our system. In the eighties Charles Keating et al raped the American taxpayer for several hundred billion in cash bailouts for the failed S&Ls. Keating is now out of jail. I never bought an S&L bond, but I paid via my taxes. Jonathan Lebed runs some stock up on the internet and the SEC takes 250K, all his trading profits, plus I think some jail time. Lots of these examples. Merrill has a captive audience and a distribution system of brokers, we take 1/3 of their postage. No jail time. I'm not sure that I understand what the difference is, both acts are identical. Enron executives cashed out 100s of millions of dollars of stock, and the companies creditors are left holding the bag. My best friend has 50k of outstanding AR with a telco in Chapter 11, while the owner sold 500 million in stock. In the meantime congress works on making personal bankruptcy laws tougher. Notice in the above that I did not mention any of the piggys that lost money buying stock. To me the issue is not the little old lady or the greedy dentist that lost the money. The issue that some people have been given a license to steal in this country means we all end up losing.
interesting Op-Ed piece in the WSJ a couple of weeks back, revealing in detail how Spitzer took Merrill e-mail quotes out of context. IMO Spitzer is a self serving prick. Secondly you get what you pay for. I know guys who never traded anywhere more expensive then Datek complain that analysts at Goldman and Merrill were unreliable. And lastly how many of us seasoned speculators (even those who were bears) foresaw XO, WCOM, JNPR,CMGI, YHOO and CSCO( I could list a thousand issues) breaking as hard as they did. As others have alluded if the NAZ was at 5k we wouldn't be subject to such 20/20 hindsight.
Shifting blame to the public is not fair and wrong. Analysts WERE and still ARE in the position of trust, like doctors, lawyers, etc. And they led they public down in that position, they used and abused the public using this position of trust. It is despicable. It's easy for us, "sophisticated traders" here to say well we all knew analysts were crap all along... Well, maybe "we" knew, but the John Q Public didn't know, and that's what it's all about. Also, some people get taken for really stupid scams, but does that make the fraudsters any less guilty or responsible??
We are going down the river on a raft of lies. This stuff is not new. But it has reached epidemic proportions. We are all guilty of letting this happen. As was pointed out we had Keating and Milken and Boesky. We had tobacco exec's and now Enron stooges. We have had baby food companies dupe us. A plane fallls from the sky and their company people are guilty(Value Jet} But their sentances are overturned. Brokerage firms lying, brokers and analysts and accountanats to. We have politicians selling us out. Some people vote them right back in. Marion Barry is a felon and was put right back into office(Mayor of DC). A recent former President of USA lied to us on camera. (I did not have sex) I lost friends on 9/11 can the new one be lying to?? So where is the truth ?? I can't find it anymore . The media and CNBC are not giving it to us either. Until somebody starts doing some serious jail time and we start using our votes correctly. This won't change. Just think if they could use our SS money to invest where would we be???
Mer are responsible for the advice they give. It is fiducary accountability; if they are advising one thing and believing another then they are not executing their duty. If a doctor tells you there is no cure for your ills and then one year later a cure is found then you can hold the doctor accountable, but if he says there is no cure because he doesn't want to prescribe the drugs due to no payment received and you get sicker, then he is accountable. Etc.. I think they have got away with their hands being slapped because they have convinced the authorities that more harm than good would be done by a loss of confidence blah blah. BTW, if you think any of this is new then I suggest you read 'Extraordinary Popular Delusions and the Madness of Crowds'. During the South Sea Bubble someone opened stock (IPO) on an enterprise that was listed as 'An undertaking of great benefit, that no one shall no the detail of'. Investors tried to sue but the opportunist had moved abroad and forgotten to leave a forwarding address. Cheers
one day there will be a law protecting us from everything possible - no one will be able to move for fear of some law or other - and the very people who will be turned into vegetables are the ones who are pushing for it - you got sense - use it - if you haven't - learn from your mistakes - but dont protect those who dont need protecting in the UK we dont have a retail futures industry - because the people are protected by investment law! - we have speed cameras every 100ft - and if u stop your car at traffic lights - you'll get a parking ticket! the meek will inherit the earth - and they will be welcome to the grey world it will be!
trdmac, totally agree with you. There is a definite lopsidedness to the SEC. They stomp all over the smallest infraction if it is committed by a nobody but they poo-pooh the biggest scam in history. I think it is obvious that the fox is guarding the henhouse. The SEC is owned and run by the big firms on wall street. The chairman is a 20 year (!) veteran of being on their side. I don't care if you chew gum or walk funny for twenty years or defend scum bags on wall street in/out of court as he has done. That's one habit that will be very tough to break. MER would never disgorge profits from their pump'n'dump because they own the game. Jow Schmoe who does the same operation on a smaller scale just isn't playing the same game. When you are that big, they can't afford to come after you.....anyone care to reminisce how close we came to financial armageddon thanks to LTCM and the Chicago PHDs and Noble winning schmucks who ran it? Who ended up paying for their hubris? Not one single one of them. Basically the moral of the story is this, if you're gonna hustle, do it BIG. Otherwise, you're dead. ....and Pabst, I agree Spitzer is no Mother Teresa. But I don't give a dingo's kidney what his motivation is. As long as puts Wall Street's nut in a vice and cranks the wheel couple of times, he's a-ok in my book.
Totally - how about the new assault on hedge funds? Haven't heard much about it besides the 30sec blurb I heard on BTV today, but somebody has decided to make the case that hedge funds are sketchy (b/c of lack of disclosure) and "need" to be more tightly regulated. Hmm...maybe janus and all the other morons are upset that some of their assets have been sucked away by hedge funds. Just a theory, but it'll be nice to see who's behind it and what their real motivation is.