Closer Watch on the Basket June 16, 2009
Posted by naughtwirthreeding in Entertainment and Media, Humor, Life, Money & Investing, News & Events, Politics, The Economy.comments closed
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.
Business As Usual June 14, 2009
Posted by naughtwirthreeding in Humor, Life, News & Events, The Economy.comments closed
This week the U.S. Food and Drug Administration was granted permission to begin regulating the tobacco industry, which is step #2 in what will probably be a slow, but ultimately inevitable, decline of Big Tobacco in the United States. Look for nearly-immediate regulations concerning labeling, ingredients, quantities of addictive substances that are permitted, and most likely even restrictions on imported product as well. It has been more than 50 years in the making, but the cigarette is about to become an unprofitable venture for American sales. I’ll explain that in a second.
To get an understanding of exactly how big Big Tobacco is, and how much money they make (and how they make it), read “Barbarians at the Gate: The Fall of RJR Nabisco” by Bryan Burrough and John Helyar. The book is about the leveraged buyout of the RJR Nabisco corporation, which for those non-MBA folks can be a tremendous bore. But in the process of going through the details the book outlines the mountains of cash that tobacco companies rake in on a daily basis, and what it goes towards.
To give you an idea, a pack of cigarettes goes out the factory door for a cost of production lower than a dime. Federal, state and local taxes make up the bulk of the price you pay at the 7-11, but when all is said and done that ten-cent pack of cigarettes results in profits of at least $1.00 – $1.50 for the tobacco company.
45 million smokers. Average consumption of one pack a day. Grab your handy-dandy calculator and do the math on that, and you’ll have a good idea of what kind of loot we are talking about here. A good portion of that goes, very literally, straight into the pockets of sympathetic politicians who work to tear the guts out of any substantial anti-smoking legislation. Until now.
Now, unlike before, there will be costs associated with compliance with new FDA rules. Inspections; audits; mandatory reporting; monitoring of ingredient quantities compliance; ingredient purity compliance; and on, and on, and on.
Big Tobacco will most likely see its cost of administration skyrocket, which will translate into higher per-unit costs that will be passed on to the consumer as higher prices. Higher prices means lower demand, and lower sales. Ultimately some companies with small domestic market share will opt to simply bypass the American market altogether.
But is this “the end?” Not hardly. While the United States is a big market, American cigarettes are some of the most coveted brands in the rest of the world, and cigarette companies are not below profiting directly from the black marketeers in places like South America, Southeast Asia, and former Soviet Bloc countries. They skip the retail channel, move the cigarettes in via shipping containers using foreign subsidiary corporations (with a wink, a nod, and a quick $100 to the local authorities to look the other way), and sell direct to the streets at black market rates — and avoiding all of that pesky import duty and government regulation and taxes in the process. Foreign mafia are more than happy to cooperate, acting as distribution channel and raking in a nice profit themselves while cutting out the middle-man from the process.
So while the legal market in the U.S. is Big Tobacco’s easiest source of cash, as that one dries up they will further exploit foreign markets and the money will keep flowing. Big Tobacco isn’t finished, it’s just re-tuning it’s business model. While there are still smokers to buy them, there will be tobacco companies to make them.
As the number of American smokers dwindles and the sales tax revenue starts declining with it, we will have to start imposing export duties to get the same “bang for the buck” as we do now with retail sales taxes. Other than that, it will be business as usual.
You Lucky Boogers June 9, 2009
Posted by naughtwirthreeding in Entertainment and Media, Humor, Life, News & Events, Politics, The Economy.comments closed
Five for the price of one today, you lucky boogers…
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Polling numbers show that only 8% of the American public is buying this horse-manure the GOP’s stable boys have been shoveling concerning Supreme Court nominee Judge Sonia Sotomayor. Looks like the credibility factor has gone south further and faster than anyone could have imagined.
That’s what happens when you follow up a campaign of lies with six months of whining. People stop listening.
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A new web site has popped up in the wake of the murder of abortion provider Dr. George Tiller. The site is located at http://iamdrtiller.com, and features photos and testimonials from abortion providers all over the country, talking about their service to women and their commitment to defending a woman’s right to choose from the front lines.
Writ large, what this web site says is, all of you anti-abortion radicals can go fuck yourselves. If you think that you can effect change in this country by shooting somebody, you’ve got another thing coming. The movement is large, the movement is strong, and the movement is backed by 75% of the American people. You can kill one of us, but you’ll never kill all of us. And for every one of us you assassinate, a hundred more will step up to replace them.
All of your prayer vigils and your roadside, blood-covered poster campaigns and your clinic entrance harassment will never work. You’ll never win. Give it up.
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Sooo… Sarah Palin says she is going to be the keynote speaker at a fund raising dinner, then she isn’t going, then she might go, then she’s not telling, then she ends up going but not speaking.
Is it me, or is the GOP looking more and more like a bunch of fifth grade girls?
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So now the U.S. government owns large chunks of two major American auto companies.
I believe it is the duty of the Attorney General’s office to initiate an anti-trust investigation into the U.S. government. They may control too big a chunk of U.S. auto sales. We may have to break up the government to prevent price manipulation in the marketplace.
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It would be a real treat to go one whole day without hearing the following words: bailout, reform, repeal, waterboarding, Lambert, Carradine, Sotomayor, Sessions, or Oprah. Work on that, would you?
