Ump on a Blog

The American public is laboring under a very comforting, but nonetheless potentially catastrophic delusion about the financial markets. I’m here to make sure it stops.

When they turn on the television, they see ads with tweed-jacketed bankers shaking hands with matching-cardigan-sweatered couples to talk about saving for their newborn baby’s college education. They see pinstriped-suited investment brokers with early-fifties wrinkles and confident smiles talking about safety and security. They use words like, “confidence,” “dependable,” “value” and “honesty.”

Upon seeing this, America settles a little deeper into the recliner, and a warm feeling comes over them. Our money is in good hands, they think to themselves. We can be confident that our investment, our future, is being well cared for. I think there was one more cinnamon roll left over from breakfast today. And that’s the sum total of their opinion on the matter.

It’s all a lie. I have worked with these people. And if you think those actors in the commercials are the ones handling your money, you’ve got a lot of growing up to do.

Stock brokers: mostly compulsive gamblers, thinking nothing of betting $500 several times a week on various sporting events; many of them at least casual users of recreational drugs, most frequently cocaine; they get paid exclusively on commission, meaning they are most likely to advocate taking risks fifty to a hundred times what you would do if you were making an informed decision — so they can rake in the big dollars on the spread; and when push comes to shove, all they care about is that you buy something — anything — because they get paid on the trade volume… whether you make money or not.

Investment brokers: nearly all of them are paid by the firms whose products they represent, so your Merrill Lynch guy can only pitch you Merrill Lynch financial products — never mind that I can find you a dozen cheaper, better performing and less risky products just by throwing darts at the Wall Street Journal financial pages; and if you find yourself sitting down with one of these guys about every three years to “re-assess and change direction,” that’s because most of their commission agreements with investment firms only pay them for the first three years your account is open — and if they switch you to a new product, they can start getting paid commission on the new account. Nice, huh?

Commodities traders (these guys take the cake): things have settled down somewhat in the transition from open-call trading to online exchanges, but there is no faster way to lose very literally everything you own than trading commodities on the margin — yet these brokers will smooth-talk their way so effectively that they will have you thinking it’s so easy a fourth-grader can make a killing just by trading during lunch and recess; without knowing it, and without them telling you, you could be wagering two to five times your net worth on a quarter-point jump in pork belly prices. Many of these guys are the guys that were run out of “respectable” investment jobs by their employers or the FEC.

So now that I have disavowed you of the television stereotypes, I come to the most important part of this story, which is the following:

People who deal with buying and selling money for a living don’t care about you, don’t care about your kids, don’t care about your money, your house, your car, or your security; they don’t care about any of their other clients, the company they work for, the financial sector as a whole, or for that matter the health of the economy. None of them — NONE OF THEM — give a rat’s ass about anybody but themselves. Period.

I know this because people who do care about those things can’t work in the financial services industry and still look themselves in the mirror. I was there. I got out. It turned my stomach, and it will turn the stomach of any person with a conscience.

The opinion these people have can be summed up very succinctly. They think that the financial sector is just a game. They think that everybody out there cheats, lies and steals. They think that since everybody else does it, why can’t they do it too? They think that since other people get rich by ripping people off, there’s no reason not to. They think that since everybody else is just looking out for themselves, they should too. And that’s how they justify all of the outlandish fraud and embezzlement they perpetrate.

Think of any financial scandal in the past 30 years, then put the words I just described into the mouth of the perpetrator. Does it make sense now? This isn’t just me spouting off: this is the pervasive attitude in the industry.

So when President Obama talks about establishing new financial sector regulations and creating an integrated watchdog agency to oversee consumer credit and the creation of investment instruments and what-not, your only question should be, “What’s the NEXT step? What additional things are you going to do? What ability will they have to expand their power when the Wall Street weasels find ways to get around the laws again? And when is that agency going to get the power of law enforcement behind it — subpoenas, seizures, arrests, and arraignments?”

This isn’t about stifling innovation. This isn’t about fostering entrepreneurship. This is about keeping the bastards who use those buzzwords to cover up their shady deals from having more opportunity to steal our money. When you hear somebody object to additional financial sector regulation, you can be sure of one thing: they’re a criminal, or they take political contributions from a criminal.

No matter how much regulation is put in place now, no matter how extensive and how thorough, it will never be enough to stop the crooks from trying to cheat us again. No matter what we do today, we need to do more tomorrow, and the next day, and the next day, and the next, and the next.

If there is one thing that you should take away from the financial sector collapse it is this. People who deal with money for a living should never be trusted, ever. We as a nation are putting our eggs in their basket. It’s time for the government to start keeping a closer watch on the basket.

Busy, busy day…

The cold-blooded murder of Dr. George Tiller should be viewed by every single human soul as the most abhorrent and disgraceful thing since the Oklahoma City bombings. For those of you who do not, your God is going to banish you to the deepest, darkest hole in hell.

A couple of thoughts. First, it is imperative that we do not let the radical Pro-Life movement think that this is a solution to their problems. To ensure that doesn’t happen, I am calling for a thousand new doctors to perform the same services as Dr. Tiller effective tomorrow. For every one of them you murder, we will replace them a thousand times over in every corner of the country. How’s THAT for cause and effect?

Secondly, Cenk Uygur on Huffington Post has brought up a very valid and pertinent point. The man in custody for the murder has not been convicted of anything. He is an accomplice in one of the most vicious acts of domestic terrorism in recent memory. We need to make sure that any additional conspirators are brought to justice before any more lives are lost. He is being held in isolation. He is cut off from the outside world.

He is, in effect, in the same limbo as the Guantanamo detainees.

Let’s waterboard him. Right now. Today. This minute.

See how the Hate-Wing Radio freaks like that little maneuver.

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GM files for bankruptcy. Well, it’s not as if we didn’t see this coming. Do people understand that this isn’t a liquidation? That GM will still exist after the process comes to an end? The interviews with people on the street that I have seen show a lack of understanding that quite frankly puzzles me. GM will continue to produce Chevy’s, Buicks, Cadillacs, and GMC Trucks tomorrow, and the next day, and the next day. Plants will close, brands will be phased out or sold, and dealerships will sit empty. But GM will endure.

How did GM get here?

1.GM was determined to build cars and trucks, whether people were interested in buying them or not
2.GM management was so entrenched in the past that they could not look into the future
3.GM could not bring itself to admit its own flaws
4.GM could not admit that the Japanese and Germans were putting out a better product, and relied on the “buy American” attitude and fleet sales to carry them through the dark times of high-priced oil to the party days of two-ton, four-door boats with bench seats and white wall tires again
5.GM thought that selling the exact same car at four different dealerships was a smart way to get more market penetration (see the Chevy Cavalier, the Pontiac Sunbird, the Buick Skyhawk, and the Cadillac Cimarron for those of you who don’t know what I’m talking about)

How will GM get back to being an internationally competitive car company again? If I knew, I wouldn’t be writing this. I’d be in Washington about to take over what was formerly the largest car company on planet earth.

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The attacks continue on Supreme Court Justice nominee Judge Sonia Sotomayor. The Republicans in the Senate have given marching orders to those who are not held accountable by their constituents to blaspheme the Judge ahead of her confirmation hearings. She is bound by rules that prevent her from responding to such allegations, so this remains a one-sided conversation.

I think it’s time to call out some of these GOP Senators and do some damage for 2010. In the last six months, anyone in the Republican party who has criticized Rush Limbaugh has had to turn around, nearly immediately, and apologize. Let’s use that to our advantage.

“Senator, yesterday Rush Limbaugh called Judge Sonia Sotomayor a racist, a hack, unqualified, and unfit to serve as a Supreme Court Justice. Yes or no answer, Senator: do you agree with Mr. Limbaugh, and if not, will you go on record denouncing these comments?”

Boom. Game over. If he does agree, he is vilified by the press as supporting a racist and gives a huge leg-up (along with a juicy sound bite) to whomever challenges him in the next election; if he doesn’t agree, and denounces Limbaugh, he loses close to 50% of his radical voting base. It’s duck and cover for every Republican in the Senate. Let’s start lobbing these rhetorical grenades and take some of them out.