The Naked Shorting and related abuses, about which this thread comments, is just a part and symptomatic of the excesses that have now taken down our financial system. Perhaps it's time for all of us to rise up and storm our politicians and those who control the systems with common sense solutions. We clearly can't do any worse than they.
1. No manager is worth more than a million bucks a year. This is not the same as being ARod on a team that fails to make the playoffs although the similarities are there. This is not the same as being an entrepreneur who takes the risk along with the shareholders.
We have managers who take almost no risk and have a very strong incentive to grow the top line by acquisition and low margin deals. Why? If one manages a multi-billion dollar enterprise, then the argument is that the pay package is deserved. When there is a bad year, or decade as has happened to much of American industry, there is no "give back."
I laughed yesterday when a CNBC commentator said that we should not try to get back the money given to managers who justified their 7,8 and 9 figure payments with mismanaged and wrongfully-purchased assets. WHY NOT???? Clearly, the definitions and scope of fraud does not dissipate under the fidcuiary umbrella managers are required to give to their employers, the shareholders.
Most people probably don't realize that shareholders actually employ managers, including the CEO and the BOD. The commentators, the politicians, and even us shaareholders, treat our managers as our bosses. IT'S TIME TO TAKE IT ALL BACK. TAKE TO THE STREETS, WHATEVER IT TAKES.
2. FAIR MARKETS AND FAIR ACCESS TO INFORMATION.
It's equally important to have fair access to markets and to information. It's time for us to junk the SEC and the acts upon which it is based and bring our markets into the 21st century. This gets into the topics which this poster and so many others have touched upon here for so many years.
We have the technology to have fair auction markets. We have the experience to come up with a system that treats all fairly. There should be effective and efficient regulation of money pools.
If money pools want to short, then they should have to identify shares and have them in hand.
Those who broker in one form or another, should have to comply with basic auction concepts. If they are to have exceptions, from which they benefit, these exceptions would be limited, given computer and auction technological improvements, to perhaps hours, not as currently is the case of days, weeks, months and even years.
3. FAIR, EFFECTIVE AND EFFICIENT REGULATION.
The regulators and SEC should be there to protect the public, the retail investors who work hard and put their savings into direct investments, retirement plans, 401K's, IRA's, and mutual funds. Most of us who actively invest, trade or speculate feel we have targets on our backs and that the regulators protect the hedge funds, the MM's, the scammy managements and not us.
It's pretty easy to understand that front running, misprepresentation, pump n dump, short n distort, toxic financing, MM games, and all the related issues we have discussed for so long can be eliminated with full disclosure and extremely strong confiscatory penalties for failing to follow the rules.
4. COMMON SENSE IN BANKING AND FINANCING
Increase FDIC insurance to cover brokerages and investment bankers, all those who deal with public funds, and increase the amounts to $500,000 - $1 million.
Limits should accompany this so that derivatives and other instruments that create something out of nothing are not encouraged.
The original rationale for markets is capital formation for industry not for rich people gambling and inventing ways of grabbing profits by monopolizing information while they create artificial instruments.
Is it time to take to the streets or will that time come when the situation gets worse? It is time now for common sense and common sense does not reward those who abuse the system, whether that be hedge funds that take huge percentages of assets even when long term performance is no better than the market random walk, whether that be managers who justify their as high as $100 million pay packages because they run a "big" company inefficiently and incompentently, whether that be MM's and brokers who make that last buck by bending the rules and keeping information from those to whom they have a public and fiduciary duty to protect. |
