Scott:
Where on earth (or perhaps why on earth) do you come up with these articles?
Let's go nice and slow: the reason why we have speculative bubbles (which end badly) is because of greed, pure and simple.
Is that greed somehow only a characteristic of a few people (at the top??), or was it pandemic to every Tom Dick and Henry with a 486 and an internet connection?
Enron's stock was bid up and up because they told the investors what they wanted to hear: we have created a new way of doing business, we own a new market.
Tyco's problems were much more mundane, but the spice on the curry was the CEO apparently collecting nice art and not paying New York sales tax on it.
Martha Stewart's problems resemble nothing so much as a nervous 5th grader trying to cover up something which looked illegal (insider trading) but in fact, if we believe the current set of facts, was not illegal (that is, it was not insider trading), although the cover-up (obstruction of justice) was most likely illegal and definitely and more importantly was incredibly stupid.
We had a bubble because you and Joe Schmoe and Kenny down in Atlanta and Harold up in the Upper Peninsula in Michigan all had Datek accounts (a.k.a. "The Link to the Casino") and managed to buy AMZN for 20 and sell it for 40 in 4 days. Fear vanished, greed took over. Kenny tripled his account in 4 months and you wanted to as well. Joe Schmoe bought some ENE at 14, more at 28, more at 56 and then at 72, then more at 54, and again at 14 (house was already 2nd mortgaged to do so) on MARGIN and without once ever opening up a 10K or a 10Q or ever looking at ENE's chart by price and volume.
Now everyone is squawking about how the greed of the big boys brought Wall Street down. Unh unh, no way, Penelope. People who never had a Merrill Lynch account or read a word Henry Blodgett wrote are squeaking like a stuck pig about how the analysts deceived them (as if they had a right to rely!!).
This writer for Time, covering the vast sweep of 80 years of US financial and regulatory history--do you think for one moment he has a clue as to what he's talking about? Nope, not one %$#%$%& clue. He ends this pitiful article with a glance forward, asking if we are on the cusp of a new era. Puhleeeeeeeeze, dejame en paz.
Kb |
