Question, category: rhetorical...Where were the 'guardians' of the public interest when the sharks were at play, in the late '90s feeding frenzy?
There are some defenders of the market establishment who are fond of pointing out that "nobody was complaining while the market was going up", implying that we have no right to complain about it now that it has collapsed. In fact, some of us, if only a minority, were not getting rich off the hype because we underestimated the power of the powerful to drag the public into the greater-fool syndrome. I didn't hear much complaining either, but I certainly saw and felt some disbelief and warnings about what was going on. Regrettably, some of us in that group also underestimated the extent of the subsequent collapse, no doubt to some degree because we were being misled by the companies and the friendly analysts who kept assuring us there was value where none existed, not to mention all the professional financial advisers making their own rewards touting the benefits of compounded yield in a market that could only go up.
I don't expect we'll ever see it addressed, but the consequences of the lies are much broader than the specific charges being made against the analysts. It's not just that somebody lost money on stock ABC because they believed some analyst's hype of stock ABC when in reality the analyst thought ABC was a piece of garbage. The lies, and the general philosophy that if somebody loses their money while you gain because they believed your lies, it's THEIR fault for being "greedy" and believing you, created an atmosphere in which many professionals were perpetrating one of the greatest re-distributions of wealth in history, funneling the often hard-earned wealth of the many into the massive fortunes of the few who were not above profiting from the deception. Not only were the ABCs' valuations being distorted, most of the market became distorted to the point where there were few if any things for a prudent investor to buy at a fair price.
I once believed that the Nasdaq could not fall as badly as it has because the natural consequence of such an event would be an erosion of investor confidence to the point of killing the goose that lays the golden egg. I figured the powerful would not let that happen because it would ultimately inhibit their ability to collect the eggs. Either I gave them too much credit, or failed to recognize that they would collect enough eggs before the goose died to tide them over until the next one came along. Maybe there really is a sucker born every minute.
Dan |
