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Technology Stocks : Ampex Corp.

AMPX 13.57

-3.8%

Nov 3 3:59 PM EST

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To: duke of axc who wrote (5728)	9/27/2008 9:06:49 AM
From: Hal Campbell	of 5839

Duke I guess this is OT but some quick random comments... The bad mortgages were a serious problem indeed. And there is much to discuss there;but they were just waves. Other matters turned them into tidal waves headed for millions of dominos… Repeal of Glass Steagall was one. Bizarre elimination of the uptick rule on short selling another. Laisseze Faire attitude towards naked short selling by truly unregulated hedge funds (and many others) another...much more. Without rules we are living in Deadwood times a billion...and the financial bodies just keep piling up... On a fateful day in 2005, the five largest American investment banking companies approached the SEC and requested a relaxation of leverage standards from 12-1 to 40-1. Only one of those companies still exists in that form. Here's what brought down Orange County long ago...in essence the same thing. Just a much smaller scale. ppic.org I loathe derivatives and similar "investment" instruments. Used to play backgammon online late at night. About 12 years ago I ran into this opponent who said he worked for an investment firm in New York, and sold complex derivatives to individuals, companies, and municipalities for a living. His small talk was very convincing - I believed him. Asked him what percentage of his customers actually understood what they were buying and the potential effects if the enormously leveraged indices that pegged their value went in the "wrong" direction for any extended period of time. His guess was that none of them understood. That would be my guess too. So it was with a bitter laugh that I heard the 43 auditors who tackled Bear Stearns books couldn't make heads or tails out of those sundry "financial" Russian Roulette derivatives on their books. Couldn't assess their worth or tell who owed what to whom when.... I'd call it gambling but that would be an insult to good gamblers and so many other people who shoulder reasonable risk every day (and prosper). I'd call it crazy, but "high" level employees of these firms were paid....according to a Bloomberg article I posted here months ago....If I recall it was 33.2 Billion dollars in bonuses in 2007 alone (that IS a B). So they had nothing to lose...wasn't THEIR money. In the end it was OURS whether any of us owned stock in their firm or not. Really it was all roughly equivalent to a person getting paid a mammoth amount of money to borrow money.... then used the borrowed money as collateral to borrow more many times over...then waltz into a casino...go to the roulette wheel...drop it all down on 00...if it happens to hit once or twice just let it ride.....maybe borrow some more and up the bet.....then when it finally loses, they collect their whopping bonus and leave. ....and the dominos teeter a little more with every spin of the wheel.... We'll survive....but surviving Ampex was just training camp...

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