Not yet two weeks into the New
Year and the folks at Wall Street have brought you another devious, if not
despicable, example of how the purveyors of profit can manipulate the system to
their advantage. It seems that a
prestigious investment bank (no names, please) has been offering shares of a
non-public equity to its clients by
appointment only. That is, invited
guests, special qualifiers, and others cut from a cloth that you are not, were
given a chance to own shares of stock in a major corporation that they (the
bank) underwrite. Legal? Of course.
Clumsy? To be sure.
Just who are these guys? No, really, who are these guys?
These are the same higher-ups
who brought the system down once before, who know how to manage profits not
morality, who think nothing of laying off another service worker to shed
“overhead,” who many defer to as “senior persons of experience,” who proffer a
culture of indifference about your concerns and fears about investing. In an effort to make more money, faster, they
or their minions synthesize products and ideas that generate revenue where once
there was none. Alchemy and avarice at
its finest.
Blind leading the blind.
Do you remember the pride you
felt as a young Scout when you achieved that merit badge for rope climbing, or
campfire building? That badge
symbolized, to you and others, the work you put in mastering, sometimes by
failing first, the tasks at hand. It let
all of your peers know that you were their equivalent, or it gave those not as
accomplished something to which they might aspire. It qualified
you for ascension and recognition within your community.
Similarly, within the
financial services industry there are badges of accomplishment one might earn
through various testing and registration requirements. Your doctor is licensed, or should be. So, too, is your dentist, your lawyer, those
upon whom you depend to compete in an arena of similarly qualified
professionals. But not all scions of
Wall Street are similarly registered. Wall
Street allows for hybridization of products, professionals and competencies. Hedge funds, investment bankers, analysts,
insurance agents, private equity sales, Wall Street CEO’s all look as if they
are under the jurisdiction of regulatory bodies governed by financial service’s
oversight. But, alas, they are not uniformly registered or qualified. “Let
the buyer beware, we have a job to do” and for many that’s simply to find
ways to extract money from a gullible, if not wealthy, public. I am frequently saddened by the chicanery of
my industry, but recognize that even Don Quixote’s attempt to joust with
windmills was futile.
Isn’t it strange that, unlike
the “old days,” insurance companies today don’t insure, banks don’t lend, and
brokerages don’t broker a fair exchange?
More of the same.
Thus, the markets simply
danced in neutral last week. As if to
signal the arrival of a new yardstick, the year’s first trading day was strong,
while the balance of the week was digestion of the same old lack of enthusiasm
and trust. Might we expect to see a new
metric in place after the rough-and-tumble in Congress is settled? Don’t count on it.
Whichever way the debate shapes
up, there is still a credit crisis, an insurance crisis, and a confidence
crisis. All the avoidable blunders Wall
Street might make will still occur because the brazen on Wall Street are not
being held accountable for their greed.
Want to buy some stock? Call for an appointment first. And, oh yeah, send a copy of your financial
statement, along with your current country club status.
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