Are sleazy stockbrokers ruining the US economy?

[brewer12345]

Discuss. Or don't.

 

[FinanceDude]

I don't think most "sleazy stockbrokers" can move the market themselves. Seems to me that most very expert "sleazy stockbrokers" go make millions of dollars on Wall Street........

I also don't think hedge funds are killing the markets, after all the Yale endowment, among others, is basically a hedge fund. Plus, getting millionaires to pay 2% a year and give up 20% of the profits is a heck of a business model anyways.........

 

[MichaelB]

Are sleazy stockbrokers ruining the US economy?

It's not the stockbrokers or the hedge funds. It's the Venezuelan Beaver Cheese sellers -they're cheating us all out of our fair share.

 

[ls99]

No not ruining economy. If they work for you, they take the sucker's money, make money for you. Then you can buy your mega-yacht, employ crew, spend biiig on diamonds etc. entertainers of choice, throw lavish entertainment.

So their impact on the economy is a zero sum game.

 

[megacorp-firee]

I vote for 'uneducated public'
Greedy people and unscrupulous people (including stock brokers) add to the bad fray.

 

[harley]

I don't think the economy is being ruined at all. Maybe just a little ill right now. What comes down must go up. The worst I can say for our economy is that I think the federal debt is too high, and even that is not a permanent condition. The poorest person I know has a car, a couple TVs, and a decent (if subsidized) apartment. Not too shabby for a ruined economy.

Jesus said (in JC Superstar anyway) "the poor will be with us always". I suspect the greedy and sleazy will too. We can't feel morally superior to the poor (there but for the grace of God...), so we need these others to measure ourselves against.

 

[ladelfina]

It's not a question of 'sleaze'.. because this is the way the system works. It is A-moral (not moral or immoral).

We have been conditioned to believe the supposed "free" market has a morally superior complexion to any other construct.

If you look at brewer's comment on the Australian bank thread.. hmmm.. he says those bankers were stupid idiots to believe in an AAA credit rating.

Oooowwhhhhkayyy.

So let's cross-pollinate the "stupid debtor" meme with the "stupid banker" meme. The result is that the majority of people (rich/poor.. smart/stupid) have been taken for a ride. Hmmm. Why is that? Not because a gun was put to anyone's head, but because we believe in the system the way certain credulous folk believe in Tammy Faye Bakker.

Because the system requires many losers and a tiny cadre of winners. This is not condemnation at this point (I'm at the "acceptance" stage of grief/loss). It's the debt-monster pyramid mechanism that sucks previously sane and solvent people/institutions into its wake.

Harley, if you don't think the economy is being ruined.. look at the desperate faces and stammering testimony of Paulson and Bernanke. Look at the vacant strip malls and the empty ravaged housing developments. A plague of locusts could not have done more damage. Trillions of dollars of "wealth" have already evaporated, with more to come.

Banksters LIVE on the disconnect between what they know, and what the public knows. Every degree of financial IQ the public gains is a material net loss for them.

Again, this is just how it is. If everyone were like many on the ER forum, the recent growth in the financial sector would have been a tiny percentage of what it became.

Stockbrokers have little to do with it. They make money on volatility and people wanting to trade shares. They don't care if that action comes from shares going up in price, or going down in price. I don't know what brewer is getting at except to distract us from the quite-rotten fixed-income universe.

There's a card game going on in which every high-stakes player has been dealt 2, 3 or 4 aces. It cannot hold.

 

[unclemick]

It's those evil fer a ners - now that the dollar's been trashed - first Budweiser and now Genentech - at least back in the day the Japanese bought golf courses(I don't golf) and Rockerfeller (I like Pace). .

Wait wait - it's an election year - it's a secret Republican plot - where is 'Son of Deep Throat' now that we need him so we can follow the money.

I lost two last year - a REIT to the Aussie's and a ute to the Scoties.

Where is our undercover agent uncovering those huge pools of private money?

where's my tinfoil hat!

heh heh heh - use your hardhat liner, buckle up and pssst - Wellesley.

By the By - hard core Democrat is case you haven't guessed.

 

[ladelfina]

unclemick, far be it from me to trash the Wellesley fund w/r/t others.. but its equity portion is 85% US/Canada. It's got bonds.. hmmm AAA bonds, but what the hell does that mean anymore? I just think we are facing a climate in which past truisms may well no longer hold. [I guess you can say, well, Wellesley will be the redoubtable band that plays us out on the Titanic, though, for what that is worth.]

 

[unclemick]

unclemick, far be it from me to trash the Wellesley fund w/r/t others.. but its equity portion is 85% US/Canada. It's got bonds.. hmmm AAA bonds, but what the hell does that mean anymore? I just think we are facing a climate in which past truisms may well no longer hold. [I guess you can say, well, Wellesley will be the redoubtable band that plays us out on the Titanic, though, for what that is worth.]

Hmmm - perhaps like the gentleman who posts here and warned everyone about his oil purchase - it is only fair to disclose that way back in the early 90's in addition to pssst Wellesley I owned a huge chunk of: er Vanguard Trustee's Co-mingled International, went to AAII chapter meetings in New Orleans and actually thought I understood multi asset(slice and dice in modern vernacular).

Sooo - given my track record - I gots Target Retirement 2015 cause Vanguard computers don't pay any attention to my great thinking. And for the Putz - The Norwegian widow is going to buy American provided I can get turned around and not charge into the future looking into the rear view mirror.

heh heh heh - of course like the Saint's - it may be a long wait.

 

[cute fuzzy bunny]

Wellesley will be the redoubtable band that plays us out on the Titanic, though, for what that is worth.]

Beats tossing the deck chairs overboard.

 

[harley]

Harley, if you don't think the economy is being ruined.. look at the desperate faces and stammering testimony of Paulson and Bernanke. Look at the vacant strip malls and the empty ravaged housing developments. A plague of locusts could not have done more damage. Trillions of dollars of "wealth" have already evaporated, with more to come.

I don't see it. The Fed and the Treasury are not the economy. They are a bunch of rubes that think they are the economy. Those desperate faces and stammering testimony are a result of the discovering that despite their efforts the economy does what it wants to. And as politicians, they don't understand that doing nothing might be more productive than interfering.

There have been empty strip malls since the year after they started building the damn things, and every cycle of housing booms leaves a bunch of late starters stuck holding the bag.

It's good that you put "wealth" in parenthesis, becase it was virtual, not real. Wealth doesn't evaporate, it moves around. People who played games they didn't understand lost money, some others made money, and most others did just fine, because they didn't buy or sell, so their homes are still worth more than they were when they bought them to live in years ago. Just like my portfolio is worth more than it used to be, even though the daily report of it's supposed worth went up and down just like it always has. That doesn't matter, because I have a plan that takes into accounts the big swings both ways.

I didn't buy that Rolls Phaeton in 1999 when I was RICH!!! And I'm only riding my bike because I enjoy it now that I'm not RICH!!! anymore. I'm on schedule, because the economy is just doing what it always does.

 

[ladelfina]

as politicians, they don't understand that doing nothing might be more productive than interfering.

In that, you are right.

I'm glad you have a personal oasis, but the majority are up the proverbial creek without a paddle, much less a Phaeton. The manipulations that have gone on are unprecedented in our lifetimes and will affect even those who have tried to be prudent.

I just think this is more than a mere "cycle" and worse than usual. More people and entities than ever counted on that "wealth".. to fund pensions, to float CDs, to pay teachers, to borrow from foreigners, to build sewage plants, to outfit soldiers. To run the USofA. That money is not there and it never was, to a greater degree than ever.

 

[unclemick]

Right ! - bring back the good old days - starting 1970 with psst Wellesley.

A little shooting at Kent State, VP canned for corruption, a little 73/74 market dip, Watergate, those pesky Frenchies wanted to change $ for gold, first ever look with news coverage inside Fort Knox(to make sure the gold really was there).

The Whip Inflation Now buttons were a nice touch.

We need a gut grinding 5-6000 point drop in the DOW mixed with a little 10% a yr inflation to bring back the memories.

Hindsight says if panic strikes go straight to Wellesley and skip the gold, guns and freeze dryed food.

Will our politicians become statesman and our stockbrokers saints? Possibly not - but somewhere in the whining, wailling, and complaining - much of it justified - we will stumble thru once again.

heh heh heh - so far I got the world 'by both cheeks' even with Target Retirement instead of that other one. So where is Brett gonna end up - now that's important!

 

[audreyh1]

I think it was the finance marketing geniuses who came up with the CDO concept who have dealt a hard blow to the economy. Of course that's because all the big banks, investment houses, ratings agencies and foreign governments climbed on board while the Fed and Treasury smiled on benignly.

Greed, greed, greed. It gets us every time.

Audrey

 

[brewer12345]

I think it was the finance marketing geniuses who came up with the CDO concept who have dealt a hard blow to the economy.

Maybe. Or maybe not.

It is worth keeping in mind that the financial markets in the US are places where there has always been a lot of innovation. Sometmes the innovation leads to a dead end, other times to a blow up (portfolio insurance in the 80s, CDO squareds in the oughts, idiotic dot coms in the 90s, etc.). But by and large the innovation is mostly positive. Without this innovation, we wouldn't have a large and liquid interest rate swap market, or catastrophe bonds, or even mortgage backed securities. All of these things are pretty much critical to the smooth and efficient functioning of our society, and the dead ends and blow ups have genrally been more than made up for by the positive aspects of such innovation.

 

[Nords]

... sleazy stockbrokers ...

Redundant.

 

[audreyh1]

Sometmes the innovation leads to a dead end, other times to a blow up (portfolio insurance in the 80s, CDO squareds in the oughts, idiotic dot coms in the 90s, etc.).

Yup. Amazing how the financial innovations can end up in big blow-ups. Because investors (even and especially the supposedly sophisticated investors) start thinking the new-fangled thingie is infallible and stop paying attention to the risks.

Seems to happen over and over. It's inevitable - part of the human condition.

Audrey

 

[brewer12345]

Yup. Amazing how the financial innovations can end up in big blow-ups. Because investors (even and especially the supposedly sophisticated investors) start thinking the new-fangled thingie is infallible and stop paying attention to the risks.

Seems to happen over and over. It's inevitable - part of the human condition.

Audrey

You are missing my point: innovation in the capital markets is a decidedly good thing, not a bad thing.

 

[cute fuzzy bunny]

Besides, the sleazier stockbrokers and financial planners create much of the markets inefficiencies. If everyone made smart, informed choices then none of the rest of us would make a bunch of money.

 

[ladelfina]

good for whom?
Audrey is not missing the point at all.

CDOs, etc. were touted as saviors, and reducers of risk. They were saviors only to a select group that needed to expand debt to infinity.. without capital requirements, oversight or regulation, at the cost of the entire financial system.

No one today can make ANY informed choices no matter how smart they are; brewer said as much elsewhere. No one knows what anything is worth. That has been the "beauty" of it (and may well be the entire system's downfall).

He envisions me in a tinfoil hat and strait-jacket, but I kind of envision brewer in one of those Cold-War-era educational posters (of which I have one) that promote the wonderful benefits and complete safety of atomic radiation.

 

[brewer12345]

"The man in the forest said to me,
'How many strawberries grow in the sea?'
I answered him as I thought good,
'As many herrings as swim in the wood.'"

 

[ladelfina]

noodles and a mat

 

[W2R]

I locked this thread because it seems to be going downhill and productive discussion seems at a halt.