Yesterday I wrote what I thought was one of the best posts I have written since I started this blog MONEYTHOUGHTS. I have read it over several times, and each time, I was looking for a thread that I could develop in more detail. But, after reading this piece over and over, I believe the strength of the piece is in its simplicity, and the fact that it is devoid of numbers, formulas and a lot of Wall Street jargon.
If we Moneythought Heads are going to have an effect on the greater population of the United States, and perhaps even the world, as we do have readers from other countries, then it is important that everyday ordinary people are not turned off by a lot of the technical talk about the growth of the money supply and all the acronyms that are thrown around when discussing money, monetary policy and investments. Perhaps I have been going about this, the process to inform the people of the United States as to what caused the financial crisis, bond market meltdown and the resulting economic recession, all wrong.
The numbers are not what is important. The men behind the numbers and policies are not important. What is imperative is for people to understand that the process was corrupted. Corrupted and loaded against the interests of the American people, and tilted in favor of a very small, yet well financed few. The game of investing, which is no game if you understand that a savings account is not investing, has been corrupted and aided in that corruption by the Congress of the United States.
Regardless of whether you are politically left, right or center, in order for all of us to invest for our retirement or our children’s college education, we must have a playing field that is not controlled by a corrupt few. The knowledge that was gained more than 70 years ago from the Great Depression, and the laws that were passed in the 1930s and 1940s to protect the investor from abuse at the hands of the investment community were plowed under by our own Congress. Congress gave Wall Street the green light to steal and commit many frauds.
Until people get wise to this fact, and realize that this political left, right and center stuff is just so much bull shit, the sooner corrective action will be taken to restore the balance between Wall Street and Main Street. Given that inflation is a fact of life in the 21st century and that monetary policy and central banking and deficit spending are practiced in the United States, then it must follow that a level playing field must be restored if the American people are going to lift themselves up. The investment game must be repaired. The American people should not be made marks, nor should our Congress be promoting or protecting such behavior by the Wall Street community.
Stay tuned.
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8 comments:
You're right, Fred. Yesterday's post was really very good. Very informative. The only question is ... HOW? How do we reverse the corruption of the process, when the very people to whom the process has been entrusted are the ones who have corrupted it? And it's in THEIR interest to maintain the status quo? What do we do?
I think that it would take a movement the size of the Civil Rights Movement of the '50s and '60s. I believe if enough people make their feelings known about their anger, and feelings of being cheated while Congress sat on their hands and watched, then change will occur. I am not going to lead such a movement, but there definitely is a need to organize several million Americans if real change is going to come to Wall Street.
Keeping your money in a savings account is not the answer, nor putting your money under your mattress. I once thought bank stocks were about as safe as you could go, and found that to be a big mistake.
What I think needs to happen, I can not put in print. Legally speaking, some people need to go to jail. That is for openers. Millions have been hurt, some of us will not recover in our lifetime. But, until people wise up and realize that this is not a left, right, center issue, nothing will be really done to correct the frauds. Congress knows what they have to do. the question is: who is going to make them do it? Thomas Jefferson perhaps was even more brillant than any of us ever knew.
You write some of the best blog comments on the internet...straigtforward, dead-on...and you pin-point many of our problems.
Do you think the "tea-party" groups might be this beginning?
I agree that at one time I thought the banks were big and safe...always could rely on good dividends for income. I read every report from the companies and the CEO's of Wachovia and AIG. They always stated the growth potential was good and the dividend was secure. After the last report I read, about 3-4 weeks later, the dividend was slashed and the company reported millions/billions in losses. These individuals should go to jail. Why am I the only one outraged and want to see some justice.
By the way, Jim Cramer and Gary Kaltbaum talk about this malfeasance all the time and how disgusting it is that no action is being taken to remedy this in the future.
Fred,
Did you read this article from yesterdays NYT paper? "As Investors Circle Ailing Banks, Fed Sets Limits" by Eric Lipton. Should I be glad and giving the Obama administration applause in 7th paragraph. Is this the NEXT possible corrupt mistake that the rich can make out on the small guy with? Should there be some form of regulation or even a hands off approach to these speculators and hedgers?
http://www.nytimes.com/2009/05/06/business/06equity.html?hp
Winslow, again thanks for kind remarks. I appreciate that a few people like what I write.
No, I don't think the tea party crowd is the right vehicle.
Justice is rendered on the basis of three things: 1) who you know, 2) who you are, and 3) where you come from.
Yes, you and me and a whole lot of people would like to see them put a few of thses guys in jail, at the very least make them defend themselves for the shit they pulled.
If we build a big enough bonfire, we will see some action taken. People have to first understand and recognize when they are being used as political pawns. That is why I picked the title today, "Left, Right or Center: You are Missing the Point". Wouldn't it be nice if we could a few million people to see these things are clearly as we do, My guys that read MONEYTHOUGHTS.
Butch, Thanks for the NYT article, I just read it.
First, private equity funds have one purpose in life and that is to make money for the investors in the private equity fund. Much of this money is institutional pension money. That also means cutting and running when that is in the best interest of the fund. Where does that leave the banks they have invested in? You don't have to be an Einstein to know that if it comes down to what is best for the private equity fund or the bank, the fund managers of the private equity funds are obligated to do what is best for the fund.
Now if the Fed caves to the pressure from Geithner and crew, then we are all looking at 40 more years wondering around in the desert. They must have put Paul Volcker in an induced coma. I can not believe Volcker would be in favor of this private equity financing of national banks.
Old habits die hard, and big time greed, the Wall Street type, is not going to go away anytime soon. The Obama administration has much bigger problems than swine flu if the private equity guys win this one.
LceeL,
Here is an interesting "Non-corrupt" statement. It is from my former CEO, one that said honesty was they only way to run a company. He lives in a 4 million dollar home (in his wifes name) in Florida. I on the otherhand am one of the individuals that lost my healthcare this year because the honest individuals running the company made some bad decisions...very bad decisions. It's a short statement, about a page and a quarter on regular paper.
My healthcare went up 1245% this year. Anyone quilty of cheating the public needs to go to jail with the Bernards of this world. The ramifications are tremedous.
Fred, keep up the good work, someone will hear you one day.
SEC: Delphi first company to sign financial honesty statement
By Ed Garsten / Associated Press
July 23, 2002
DETROIT -- Delphi Corp., the world's largest automotive supplier, was the first company in the nation to file a new federally-mandated statement attesting to the accuracy and honesty of its latest financial results, the U.S. Securities and Exchange Commission said Tuesday.
Two or three other companies subsequently have filed the statement, SEC spokeswoman Christi Harlan said.
As a reaction to the scandals involving Worldcom Inc. and Enron Corp., the SEC ordered the principal executives and financial officers of 945 companies to provide sworn statements in which they personally attest that the company's most recent financial reports are truthful and complete.
The statements must be filed on or after Aug. 14, depending on the company's fiscal year.
Delphi chairman and CEO J.T. Battenberg said the company didn't seek to be the first to file, but wanted to do so quickly to reverse a negative impact on the stock market and calm employee fears in the face of the corporate scandals.
"We needed to say something to our employees. They want to know, Oh my gosh, is my CEO in trouble? Is my management team in trouble?' We want to tell them emphatically, No,"' Battenberg said Tuesday.
Before submitting the statements, the company had to take what Battenberg said were extraordinary steps to ensure the Troy-based company's financial reports were accurate.
He and chief financial officer Alan Dawes met with the audit committee of the board of directors, then with the auditors. The auditors then briefed the board's management committee and reviewed their evaluation of the company.
Divisional presidents and other company financial officers then reviewed and certified the accuracy of the accounting.
Battenberg said no errors were found through the process.
The SEC will vote in September whether to make the filing of the accuracy statements permanent, Harlan said.
Battenberg said despite the extra work required, he would have no problem with that.
"If you're running a company, you should be on top of these issues," he said.
Yes, they will hear us. One by one, the circle will get bigger. There are millions of good stories out there, and they all need to be heard. My father used to say, "everyone has a story to tell." So, until they close down the Internet, let's tell them. The talking heads are not doing the job, and so the job falls to us. Even the bright guys in the Obama administration can learn a thing or two from our stories. It is certainly time for them to tune in!!!
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