"Tight Pants And Tie-Dyed Shirts"
Chris Cox, you've got some splainin to do:
These are the sorts of stories that symbolize eras on Wall Street.
Yes, this industry deserves to be bailed out by teachers, doctors, cops, firefighters, and small business owners....
Friehling & Horowitz operates from a storefront office in the Georgetown Office Plaza in New City, sandwiched between a pediatrician’s office and another medical office. An office for the Rockland County Bar Association is also in the building. |
These are the sorts of stories that symbolize eras on Wall Street.
Yes, this industry deserves to be bailed out by teachers, doctors, cops, firefighters, and small business owners....
posted by The Cunning Realist at Friday, December 12, 2008
7 Comments:
What a joke it all is. Congress is talking about appointing an "Auto Czar" to oversee the auto industry. OMG. What a joke. These junket loving, Freezer Cash hoarding, lobbiest embracing, economic destroying, defecit producing know nothings having the nerve to tell anyone how messed up they are in beyond insane. Why the auto companies can't just do chapt 11 is beyond me. After lobbying congress and seeing what they have in store for them they should be running to the bankruptcy courts!!! They are assured of failing if they continue embracing congress in this nonsense. It is all incredible to me. Why does everybody fear bankruptcy court so much? That is what it is there for. Repudiate debt. Renegotiate dedbt, force employee and retiree concessions, shut some outdated plants down selling off the assets...This is what they need. Being under the heel of the Feds boots for the next 20 years is not the way to establish a viable busniness.
I recently had occasion to work closely with a so-called Big Four audit firm. These characters didn't do any work and wouldn't have known there were any problems until the day the company shut the doors and filed bankruptcy.
With regard to Wall Street, Rudy Giuliani should have thrown Milken and Boesky in a supermax prison for twenty years instead of two and fined them each $900 million instead of $100 million. Maybe the
crooks on Wall Street wouldn't have gone on a 20-year crime spree.
ALOHA !!
They fear bankruptcy because of one simple word ... DISCOVERY!
These days the counterparties to GM are not just limited to Delphi and Goodyear, but all the major players on WALL STREET through all sorts of toxic derivatives "vehicles"!
If GM were just a CAR company this would not be an issue today! It is more that GMAC and the attached derivatives and where these liabilities will eventually lead to that causes BK FEAR!
Wow...great point Kaimu. I didn't even think of that. GM sold off 51 percent but they are certainly still tied in to all those financial shennanigins through GMAC.
Bingo, Kaimu. That's why they are rolling out the TARP for GM, et. al. This is just more bank bailout, disguised as industrial bailout. Cerebus (sp.?) has a lot of exposure as well.
Either buyers, especially charities and big funds, have to do THEIR homework (buyer beware - if it sounds to good it probably is - you can't trust a man on Wall Street just because he dresses nice) because sellers, "market makers", on Wall Street have the morals of a tick, or governments MUST regulate financial institutions more aggressively.
Jon Stewart had a good line when he was talking to Mike Huckabee, 12/9. Jon asked Huckabee about regulations. People are not capable of policing institutions. Jon said he tried going to Wall Street with a whistle and billy club....
Look at Wall St. Wizard Finds Magic Had Skeptics
"Victims of the scam included gray-haired grandmothers in Florida, investment companies in London, and charities and universities across the United States.
...
The F.B.I. and S.E.C. have also not said whether they believe Mr. Madoff acted alone.
...
Also likely to face very difficult questions are the hedge funds, investment advisers and banks that raised money for Mr. Madoff.
...
The returns were just amazing and we trusted this guy for decades"
For brokers:
Open letter to SEC Chairman, Mr. Donaldson.
At a bare minimum, the following must be accomplished:
* Solid educational and licensing requirements must be defined for brokers and investment advisors. Anyone who cannot grasp and apply the foundations of financial economics should not be allowed to manage other people’s money. Minimum standards of practice must be established, and deviations below it should not be tolerated. Brokers or advisors who put most of a client’s assets into a small number of securities or into one or two sectors, or who invest funds needed in less than several years in risky assets, cannot be tolerated.
* Returns and expenses must be made transparent. Just as the nutritional composition of a can of tuna is available on the package label, so too must a brokerage’s average total expenses, inclusive of all fees, spreads, and impact costs, be available to each investor. In addition, each individual account’s expenses, return, and standard deviation should be reported with every statement and compared against well-matched and well-defined benchmarks.
* Effective federal licensing of brokerages themselves should be undertaken. A hospital whose physicians systematically fail to meet minimal standards risks severe sanction; so too should firms whose brokers routinely fail to curb expenses and diversify properly.
For the Investor:
The Probability of Success
I’ve come to the sad conclusion that only a tiny minority, at most one percent, are capable of pulling it off. Heck, if Helen Young Hayes, Robert Sanborn, Julian Robertson, and the nation’s largest pension funds can’t get it right, what chance does John Q. Investor have?
Why the sad state of affairs? It’s pretty simple. To invest competently, you need four faculties:
* An interest in investing. It’s no different from cooking, gardening, or parenting. If you don’t enjoy it, you’ll do a lousy job. Most people enjoy finance about as much as Carmela Soprano enjoys her husband’s concept of marital fidelity.
* The horsepower to do the math. As Scott Burns explained to me years ago, fractions are a stretch for 90% of the population. The Discounted Dividend Model, or at least the Gordon Equation? Geometric versus arithmetic return? Standard deviation? Correlation, for God’s sake? Fuggedaboudit!
* The knowledge base—Fama, French, Malkiel, Thaler, Bogle, Shiller—all seven decades of evidence-based finance back to Cowles. Plus, the "database" itself—a working knowledge of financial history, from the South Sea Bubble to Yahoo!
* The emotional discipline to execute faithfully, come hell, high water, or Bob Prechter. Mr. Bogle makes it sound almost easy: "Stay the course." Alas, it is not.
The state of our financial institutions, coupled with tearing down the defined benefit pension system and a new shoddy replacement, is going to leave a whole lot of folks hurting in their senior years. Things are going to get worse. Where are the "family value" side of the Republican party now? Isn't honesty, ethics, family, financial security "family values"? Hasn't Wall Street just made us all, our country, weaker? Huckabee thinks if we tell people, "do the right thing", that we don't need government regulations and oversight. Argh!
I'm not sure what your talking about, but Robert Sanborn (previous pm of Oakmark) has done very well. He has a long term view, not a short sighted view. He doesn't invest for the next day or two, he invests for the long-term, years. He was proven right on the Tech bubble and has continued to outperform at his hedge fund. I'd give my money to Mr. Sanborn any day of the week! YEAR, or Century!
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