The 5 biggest lies on Wall Street

[Bowser]

We were due for a consumer led recession, plain and simple- over consumption from low cost of borrowing from the previous 2001-2002 money bubble/internet/business led recession all of witch brought on cheap money and low interest rates from The Federal Reserve that fueled the housing and credit bubble from 2002-2006. The blame game is on the Fed and Alan Greenspan if one chooses so. Fed Governor William Poole warned Greenspan in '02 of the danger in the capital markets.

The financial alchemy committed by the capitol markets using the housing bubble and credit leveraging allowing capital institutions to borrow and purchase triple AAA rated securitized bad mortgage debt along with the rise and fall of CDS market exacerbated matters further. There's plenty of blame to go around. Governance and regulation was asleep at the wheel.

 

[javacontour]

Originally Posted By: Pablo


Not holding him in sainthood, just wondering if people and MSN have truly run out of material when they stick skewers in dead politicians attempting to make flimsy articles stand-up.

It's a terribly written piece.

1) The market is indeed correcting some/many of the abusers.


Exactly, well the market is TRYING to correct, but now the ham hand (as opposed to the invisible hand) is in there trying to stop the correction.

What will that do? It will encourage folks to make the same mistakes that brought about this debacle.

I've been saying for years, not to mention the past 6-9 months, that we have been using too much credit, and many are buying things they didn't understand.

Not even the bond rating guys understood what they were rating, so it's a wonder things went well for as long as they did.

Now, instead of letting the market correct, we want the government to fix it, ensuring that folks who made the mistakes will only learn they have to cry to uncle sam if they get hurt in the market, instead of learning to invest wisely, avoid risky schemes or things that can't possibly be understood the Credit Default Swaps, etc.
Originally Posted By: Pablo

2) If you are foolish enough to listen to "experts" or anyone else with you money, then who can you blame?


Agreed, see above. If you don't understand it, don't buy it. It's that simple.
Originally Posted By: Pablo

3) Buy and Hold? Wait I thought the crooks were day traders!


If you have money, you must be a crook, didn't you read that in the papers? Didn't you get the memo?
Originally Posted By: Pablo


4) "Overpaid CEO's" don't really have anything to do with "Wall Street"


Yes and no. They are a symptom of the problem. The sense of entitlement is present at all social and economic levels. Not just the poor. CEOs feel entitled to 7 figure compensation packages even when losing money. Since such packages are tied to results and results are measured in the short term, with no consideration for long term results, this has been a real problem.

I'm not saying CEO's shouldn't be able to negotiate for such packages. But companies willing to pay so dearly for dubious results is a sign of much bigger problems. At the very least a very short term outlook. At the worst, just paying members of an elite club. Depending on one's political bent will determine where they fall on the continuum with their opinion.
Originally Posted By: Pablo


5) Then there is this gem:

Quote:
Big Lie No. 5: Buy a flat-screen TV, save the economy
Maybe the biggest lie about to be foisted on people is that they should go out and shop to save the economy. Wall Street wants you to spend to pump up the economy. Much of the federal stimulus package enacted this week entails tax breaks and handouts to get people spending.


This is what Washington DC is pitching, not Wall Street.

Meh. MSN fluff.


Of course, DC is looking for it's growth. DC grows as it finds more problems to manage.

I keep investing and am in better shape at 44 regarding retirement than most baby boomers nearing retirement.

Sad.

 

[tenderloin]

For all the bad that is talked about, MANY Americans over the years including myself have done quite well. Quite well. It was/is not all bad or all good. While abuse has happened, much good has also happened. A work in progress continues. Not perfect by any means, but IMO sure better than anything else I have seen.

Cycles will continue unless the socialists take firm control of the economy. By the readings of this board, I am surprised at the number of people on here with those leanings. They have little motivation, drive, hope or belief in themselves, their fellow country men and their country. Many are jealous or envious of others success and look for negative reasons why others have succeeded and they have not. Sit around, complain and expect someone else to give you something. Remember, the government produces NOTHING. Whatever they have is TAKEN from the people (or they print money). Whatever monies they give out is from the people. You get more then you put in, you are getting OTHER peoples treasure.

Work hard, take care of your business and you don't need anyone INCLUDING government to take care of you. Also tithe at church and or donate to charities to help those less fortunate.

Much good has also been done. Much more needs to be done, but when you stifle the economy, everyone suffers in the end...But that is what many want. They do not want anyone to have more than anyone else. No matter how much education you have, how hard you work, on and on. Just not fair that some have more than others.

I could go on and on, but frankly I am disgusted and disappointed by some of what I read here...both from Americans and Canadians. The future if this mind set continues does not bode well for either country.

 

[Win]

Originally Posted By: PandaBear
1) You can predict the future by running statistical analysis of the past.


You can predict the future because people do the same things over and over again. You don't need to know statistical analysis, just human nature.

Originally Posted By: PandaBear
2) Stocks have always been out performing bonds, real estate, and cash.


I don't know anyone who is wealthy from the stock market. I know lots of people who are wealthy from real estate, usually from investing the profits of their practice or small business.


Originally Posted By: PandaBear
3) You should start investing early in stocks (and mutual funds) rather than paying off your mortgage and loans.


That's a laugh riot. Those guys that put all their money into the stock market the last decade instead of paying off debts made out like real bandits, huh?


Originally Posted By: PandaBear
4) Timing the market doesn't make much of a difference, investing a fixed percentage of your income for the long term regardless of market condition would guarantee a good return.


The reason you have to continually throw money at the stock market and keep money in it perpetually is because there are only a handful of days every so often that the market actually makes any significant gains.

Originally Posted By: PandaBear
5) No one can beat the market in the long term.


I have no doubt that real estate in my area has trounced the market, long term and short. And by real estate, I don't mean a home - that's a place you live in, not an investment.

 

[Gary Allan]

I won't go any further here ..but I find this a rather comical statement.

Quote:
Cycles will continue unless the socialists take firm control of the economy.


Why would anyone want a quench if it requires a purge??

Only if one benefits from the carnage of the purge.

..but again, lots of learned and highly paid people must have been slackers and lazy ..because they sure took a bath like the dullards and buffoons

 

[tenderloin]

Gary, they HAVE the money that they may have lost, unlike most of the losers who complain, whine, hate and are jealous.

When you have no skin in the game, as Barry O likes to say, then why not ask for what you don't have and have not earned? Easier to sit at home and get your benefits then it is to get a better education/job and earn them.

BTW as the economy turns around, the same people will be on top, and the ones on the bottom will still be at the bottom whining, complaining and crying about the system not being fair.

Something to drive the socialist/communists crazy. Bwahaaaaa

Goldman Sachs on pace for record bonuses: report
Mon Jun 22, 2009 10:01am EDT

NEW YORK (Reuters) - Goldman Sachs Group Inc is on pace to make record bonus payouts after a robust first half, the Guardian newspaper reported on Sunday.

Goldman staff in London were briefed on the outlook and told they could look forward to the bonus hikes if the company registers its most profitable year ever, the report said.

The surge in projected profit can be attributed to a lack of competition and increased revenue from trading foreign currency, bonds and fixed-income products, the newspaper said, citing insiders at the firm.

Bonuses have been a point of contention between the Obama administration and Wall Street, which last fall endured a credit crisis that paralyzed the financial markets. The U.S. Treasury responded with the Troubled Asset Relief Program, which made $700 billion in loans available to banks.

Goldman Sachs received $10 billion from TARP, which it repaid last week.

In letters to lawmakers last week, Goldman CEO Lloyd Blankfein said the firm is obligated to "ensure that compensation reflects the true performance of the firm and motivates proper behavior."

A Goldman Sachs spokesman in New York was not immediately available to comment on Monday.

 

[IndyIan]

Originally Posted By: tenderloin
Gary, they HAVE the money that they may have lost, unlike most of the losers who complain, whine, hate and are jealous.

Do they HAVE the money or just CONTROL the money? Move it around, skim some off the top everytime... Sounds like fun to me.
The way I see it, not many of the people on Wall St contribute much to the economy. They sit on the backs of people doing real work that actually make a difference in our lives.
It's almost like they are the financial "government", people don't have much choice with their savings than to let these guys have it and hope they don't need their money back after the next bubble has burst...
I've been toying with the idea just to buy farm land or woodlots instead of "investing" money in mutual funds, etc. The downside is that you can't liquidate quickly and it requires a bit of management to keep the land rented so the taxes are reasonable...

 

[Gary Allan]

Quote:
Do they HAVE the money or just CONTROL the money? Move it around, skim some off the top everytime... Sounds like fun to me.
The way I see it, not many of the people on Wall St contribute much to the economy. They sit on the backs of people doing real work that actually make a difference in our lives.


Grand production through manipulation. Producing absolutely nothing at all.

Masters of their lives ..icons ... Producers of nothing. Brokers of everything.