Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: H James Morris who wrote (1458)	12/17/2000 5:31:57 PM
From: tradermike_1999	Read Replies (4) of 74559

I get amused at the commercials that are constantly shown on CNBC that tout the big technology companies. How they are making everything a paradise. They claim to be bringing world peace. They think they are their brother's keeper. Straight out of the novel 1984. Freedom through slavery. Why do they have to present themselves like this? It has to be the ultimate hype job. Truth is the corporate goal is to make money at any cost. World peace is a much smaller consideration. These corporations will do anything to make money. In the past they have even killed to do it. A century ago mining companies employed small children who would lose their limbs and catch black lung disease to get the ore out of the ground. Ford Motor company built factory towns and employed people to spy on every person living in it. Some companies would employ assassins to murder workers who tried to organize a union so that they could get more than starvation wages. Most of these abuses no longer go on in the United States. Instead the big companies simply moved them overseas to Latin America and Asia. In some ways big business is not that much different than organized crime. At least the mafia criminals have loyalty to one another and do some charitable works from time to time. Consider this story from the San Francisco Chronicle. Last week a Hewlett-Packard employee who was heading to San Jose aboard a company jet was given the ultimate corporate parachute. Somehow she fell out of the airplane while it was 2,000 feet above the ground. No one has yet to find the body. Passengers and personnel on the airplane have given so many conflicting stories that it is difficult to tell what really took place, but the FBI is exploring the possibility of foul play. It's not clear if she jumped out herself or was thrown out. However that investigation ends, real crimes have been taking place on Wall Street and the SEC is starting another one of its wimpy investigations which will end with no punishment. Apparently all of the big brokers had been using boiler room type tactics to get their small clients to buy bubble IPOs after the companies went public. What the brokers would do is tie ownership in regular investments with purchasing the stock of IPO garbage. They would tell their victims that they would tie in buying a mutual fund with buying an IPO. They would also cold call other investors and tell them to buy the "hot" IPO. Turns out that the IPOs were from companies that the brokerage firms underwrote. That means that they owned millions of shares of the stock and had an interest in propping the share prices up by creating buying pressure after they went public. 99% of these IPOs are now worthless. But don't cry for the big brokers, they got the shares for free and made fortunes dumping them on the public. That's "the power of the Internet." In 1999 and 2000 it was the perfect vehicle for transferring wealth from the sucker to the venture capitalists and Wall Street firms through the IPO.Bomb! pot of gold. The big brokers were all to willing to sell these corporate parachutes. Anything for money.

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