foxrun Posted January 21, 2006 Share Posted January 21, 2006 Secondly, the real losers in the Enron/Tyco/Worldcom/Qwest fiascos were employees that were FORCED to invest 401(k) money in company stock. For everyone else, it was clearly a case of "buyer beware", intelligent investors, as a rule, avoided those companies because their books were so hopelessly messy that if there was not management led bamboozling going on, it was impossible to be sure of it. Thirdly, the characterization of "most" investments in the U.S. as too risky is a bit of a stretch. Any U.S. treasury bond or note and any insured municipal bond is about as safe as you can get. Sorry Richard but the losses were not mostly limited to employees because otherwise the financial institutions that endorsed them would not have had to pay the fines they did the past year or two. There was one bank in Canada that had to pay out over a billion dollars solely as a result of thier involvement in Enron and they still made a considerable profit for the year. There just is no system in place to prevent a simular situation in the future and all I have to say is google is over $450 and the institutions are saying buy buy buy!!!!!!!! once again. And yes bonds are safe, if inflation stays in check, and once again one needs to know not to be taken away with sales pitches that the general public is bombarded with. Look at something as simple as the credit card industry and how it munipulates people into believing it is ok to pay the monthly minimum. There is a movement by some congressmen to force the credit card companies to make it more clear to thier customers what the real costs are of borrowing, but the lobbying is just too strong. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 21, 2006 Share Posted January 21, 2006 (edited) Sorry Richard but the losses were not mostly limited to employees because otherwise the financial institutions that endorsed them would not have had to pay the fines they did the past year or two. There was one bank in Canada that had to pay out over a billion dollars solely as a result of thier involvement in Enron and they still made a considerable profit for the year. I said the employees forced to invest in these companies were the "real" losers. I might extend that sympathy to hapless mutual fund investors, who thought better choices were being made with their money. Everyone else had it coming to them, to a greater or lesser extent.. They knew, or should have known, that these companies had questionable balance sheets and inscrutable income statements. Therefore they could have, but did not, exercise sound judgment. End of story. ... Edited January 21, 2006 by RichardJensen Quote Link to comment Share on other sites More sharing options...
foxrun Posted January 21, 2006 Share Posted January 21, 2006 I said the employees forced to invest in these companies were the "real" losers. I might extend that sympathy to hapless mutual fund investors, who thought better choices were being made with their money. Everyone else had it coming to them, to a greater or lesser extent.. They knew, or should have known, that these companies had questionable balance sheets and inscrutable income statements. Therefore they could have, but did not, exercise sound judgment. End of story. ... The point of who got it worse is useless. The fact that the most reputable accounting firm on the planet was doing the books complicated by the most reputable investment firms endorsing these companies left next to nobody that could "have known". End of story. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 21, 2006 Share Posted January 21, 2006 (edited) The point of who got it worse is useless. The fact that the most reputable accounting firm on the planet was doing the books complicated by the most reputable investment firms endorsing these companies left next to nobody that could "have known". End of story. Hey, there were plenty of people making noise back then. Plenty of people were questioning the sale of consulting services to companies that were already audit clients Plenty of peope were protesting the shills that banks were calling "analysts" in order to get investment banking business Plenty of people saw nothing but smoke and mirrors when they looked at Enron's books (and WorldCom's and Qwest's, and Tyco's). You can go back and do research. There was a lot of dissatisfaction with business as usual in 1999 and 2000, but the people that were dissatisfied didn't get the headlines. It's just a question of who you listen to. If you only isten to people that tell you what you want to hear, you deserve what you get. Look, the media gives the domestic auto industry short shrift. Does that mean that the American consumer should not be expected to get his/her facts straight before he/she buys a car? Of course not. ... Edited January 21, 2006 by RichardJensen Quote Link to comment Share on other sites More sharing options...
foxrun Posted January 21, 2006 Share Posted January 21, 2006 (edited) Hey, there were plenty of people making noise back then. Plenty of people were questioning the sale of consulting services to companies that were already audit clients Plenty of peope were protesting the shills that banks were calling "analysts" in order to get investment banking business Plenty of people saw nothing but smoke and mirrors when they looked at Enron's books (and WorldCom's and Qwest's, and Tyco's). You can go back and do research. There was a lot of dissatisfaction with business as usual in 1999 and 2000, but the people that were dissatisfied didn't get the headlines. It's just a question of who you listen to. If you only isten to people that tell you what you want to hear, you deserve what you get. Look, the media gives the domestic auto industry short shrift. Does that mean that the American consumer should not be expected to get his/her facts straight before he/she buys a car? Of course not. ... Agreed the media was and is a large part of the problem, but back then and still today the average person, even well educated, accepts the idea of conceding to the professional. People are too busy with our two income reliant society, as such one must relieve themselves of some responsibility. The pros were saying buy, and are saying google, great buy, get in while the gettin is good. Edited January 22, 2006 by foxrun Quote Link to comment Share on other sites More sharing options...
retro-man Posted January 22, 2006 Share Posted January 22, 2006 Gotta agree with Foxrun on that: My wife and I both work 50 - 60 hrs - just finished my Saturday shift - and the evenings and weekends (Sunday) are barely enough time to repair the shelter and forage for food. We've got better things to do than pore over Enron's and Tyco's books at our kitchen table on a Sunday night. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 22, 2006 Share Posted January 22, 2006 Agreed the media was and is a large part of the problem, but back then and still today the average person, even well educated, accepts the idea of conceding to the professional. People are too busy with our two income reliant society, as such one must relieve themselves of some responsibility. The pros were saying buy, and are saying google, great buy, get in while the gettin is good. Two problems with that: 1) if you can't do the research, don't buy the stock. 2) People are very good at hearing what they want to hear, not what is true or fair--not all the "pros" were saying buy back then. Many were not. It's just that no one wanted to listen. They still don't. Most people would rather believe a lying shyster promising a fortune over an honest person telling them to play it safe. It's human nature. People got greedy, they thought they could make easy money, and they got screwed. If they followed bad advice, they still made the decision to invest without doing further research, and I have no sympathy. I have sympathy for people who had their funds mismanaged by others, and for people that had no choice, but those that did so willingly, even those who didn't have time to do adequate research, acted unwisely. You should never ever invest based on blue sky potential. You should always find someone with something negative to say about the company you're considering investing in. If you can't find anyone with anything bad to say, don't invest in the company. If you can't find downside risk, odds are the profit potential isn't what it's claimed to be either. ... Quote Link to comment Share on other sites More sharing options...
foxrun Posted January 22, 2006 Share Posted January 22, 2006 Two problems with that: 1) if you can't do the research, don't buy the stock. 2) People are very good at hearing what they want to hear, not what is true or fair--not all the "pros" were saying buy back then. Many were not. It's just that no one wanted to listen. They still don't. Most people would rather believe a lying shyster promising a fortune over an honest person telling them to play it safe. It's human nature. People got greedy, they thought they could make easy money, and they got screwed. If they followed bad advice, they still made the decision to invest without doing further research, and I have no sympathy. I have sympathy for people who had their funds mismanaged by others, and for people that had no choice, but those that did so willingly, even those who didn't have time to do adequate research, acted unwisely. You should never ever invest based on blue sky potential. You should always find someone with something negative to say about the company you're considering investing in. If you can't find anyone with anything bad to say, don't invest in the company. If you can't find downside risk, odds are the profit potential isn't what it's claimed to be either. ... So you suggest people not invest if they do not have the time to research. Interesting, so what should people do with thier little extra they work very hard for. Should people leave their money in an interest free account? should they put it under thier mattress. No No, like you said they should put it in secure bonds right? come on Richard you know none of those are viable options because inflation, even though not a major factor today, will eat away any asset. As niteflight says, we live in a world where both adults in a home must work to sustain the status quo. Those same people are lead to believe through advertising that they are better off with a professional and as you attest that is foolish. Add to that the examples of what Arthur Anderson and other large investment firms did and people are simply left in a trap. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 23, 2006 Share Posted January 23, 2006 thier little extra they work very hard for. PRECISELY. Their "little extra that they work very hard for." If you only have a "little exra" you had better be careful what you do with it. The government can't fully protect people from their own gullibility or their own cupidity. If you don't have the time or the inclination to research where you're investing your money, then you're better off with your money in a CD or under the mattress. Sure it's no hedge against inflation. But there's no downside risk. Rule 1 of investing: Don't invest money you cannot afford to lose. Rule 2 of investing: Never invest where you don't know your downside risk. Rule 3 of investing: Don't believe everything you hear. ... Quote Link to comment Share on other sites More sharing options...
foxrun Posted January 23, 2006 Share Posted January 23, 2006 PRECISELY. Their "little extra that they work very hard for." If you only have a "little exra" you had better be careful what you do with it. The government can't fully protect people from their own gullibility or their own cupidity. If you don't have the time or the inclination to research where you're investing your money, then you're better off with your money in a CD or under the mattress. Sure it's no hedge against inflation. But there's no downside risk. Rule 1 of investing: Don't invest money you cannot afford to lose. Rule 2 of investing: Never invest where you don't know your downside risk. Rule 3 of investing: Don't believe everything you hear. ... Rule 1 of getting ahead: standing still gets you nowhere. Rule 2: can't know the down side if the ACCOUNTING FIRM LIES Rule 3: "Buy tech stocks" in the 90's was the only thing you would hear. Remenber the "new economic dynamic", how about "convergence" People were lied to and are still today. The basis of this economic system is a lie. Organized crime runs a pyramid game its a scam, Enron does it its a bad investment. A state government opens a casino its a good source of taxes, Joe Bananno runs numbers he's an affront to good social behavior. You see it is just a matter of power. The people in the know are the people with power and in this case it was knowledge that was the power. The type of knowledge to know not to invest or get out in time was only known at the very top. Richard there were so many people that lost money at that time and a good part were "intelligent" people (ie doctors, lawyers) that did there home work or were dupped by investment advisors that they had long relationships with. There was so much money lost it approached a trillion dollars. The point, nothing has changed. Like I said Sarbanes/Oxley has proven in its first case to be useless and there is already a movement in congress to remove it on the grounds that it is a hinderance to free enterprise. The lobbyist will have the last say once again.The problem is systematic and fundamental Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 23, 2006 Share Posted January 23, 2006 Look, if you're going to insist that "everyone" said this, or "everyone" said that, there's no point in any further discussion. You pay your dollar, you place your bet. Nobody else is responsible for the decisions you make. ... Quote Link to comment Share on other sites More sharing options...
fllcobra Posted January 23, 2006 Share Posted January 23, 2006 Question: Are there any stock analysts or investment bankers who think Ford is a "strong buy"? ok... how about a "Buy"? ... I still don't hear anything? Do you? Quote Link to comment Share on other sites More sharing options...
foxrun Posted January 23, 2006 Share Posted January 23, 2006 Look, if you're going to insist that "everyone" said this, or "everyone" said that, there's no point in any further discussion. You pay your dollar, you place your bet. Nobody else is responsible for the decisions you make. ... What's up, not once do I say everyone about anything in the last post, or even the last few? economist Ludwig makes a good point don't you think? Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 23, 2006 Share Posted January 23, 2006 What's up, not once do I say everyone about anything in the last post, or even the last few? Rule 3: "Buy tech stocks" in the 90's was the only thing you would hear. Remenber the "new economic dynamic", how about "convergence" You're right. You don't say "every" you say "only", but it means the same thing. Like I said. You pay your dollar, you place your bet. ... Quote Link to comment Share on other sites More sharing options...
retro-man Posted January 23, 2006 Share Posted January 23, 2006 The quote from von Mises echoes my feelings exactly: “It may sometimes be expedient for a man to heat the stove with his furniture. But he should not delude himself by believing that he has discovered a wonderful new method of heating his premises.†We have stagnant and declining real wages despite continuous gains in productivity. Why is that? We have eroding and collapsing pensions and benefits despite ever-increasing working hours. Why is that? These effects are subtle and slow erosions, not calamatous enough to trigger widespread alarm, or recognition of a crisis (which is just the way the handlers like it) but they are real nonetheless - and they are the direct result of a continuous and growing outflow of wealth and material productivity from this country. How long are we supposed to endure these "adjustments" to the global economy? Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 23, 2006 Share Posted January 23, 2006 The quote from von Mises echoes my feelings exactly: “It may sometimes be expedient for a man to heat the stove with his furniture. But he should not delude himself by believing that he has discovered a wonderful new method of heating his premises.†We have stagnant and declining real wages despite continuous gains in productivity. Why is that? We have eroding and collapsing pensions and benefits despite ever-increasing working hours. Why is that? These effects are subtle and slow erosions, not calamatous enough to trigger widespread alarm, or recognition of a crisis (which is just the way the handlers like it) but they are real nonetheless - and they are the direct result of a continuous and growing outflow of wealth and material productivity from this country. How long are we supposed to endure these "adjustments" to the global economy? I don't know that I would connect the dots between declining real wages and the outflow of wealth from this country. Rather, I would posit a classic concentration of wealth. It's no panacea, but responsible unions would do more to redistribute wealth (simply by raising lower income wages, thus pushing middle class wages higher) than governmental trade policy (that horse is already out of the barn) or monetary policy (which ALWAYS reflects what's best for the banks). If, for instance, Wal-Mart's starting unskilled employees made $12-$15/hour and were guaranteed full time hours and $3/hour in benefits, Wal-Mart would likely raise prices. Higher prices would decrease the purchasing power of the middle class (and suddenly the "working poor" would be making $30k per year). The middle classes would then seek higher pay for the same amount of time/work, and would either obtain it from their current employer, or from an employer willing to pay more. Collectively, higher wages for the poor tend to push up middle class wages more effectively than greater investor discretion (among the wealthy) tends to pull middle clas wages upward. The only problem is that the U.S. government is not able to increase the pay of the working poor. Sure, they have the minimum wage, but they have not ability to implement a minimum wage high enough to cause real results. But that's just my own opinion on what would correct the imbalance in wealth which, IMO, is more important than the imbalance in trade--the growth of gigantic multinational corporations, and the roles that they undoubtedly play in stabilizing the U.S. current accounts deficit would be a fascinating thing to study. ... Quote Link to comment Share on other sites More sharing options...
retro-man Posted January 23, 2006 Share Posted January 23, 2006 I may be overly simplistic in connecting the dots that way. But I am pretty sure that the growing income disparity is inextricably intertwined with globalization. Globalization - especially as it extends to countries and societies that haven't been nearly as successful as ours was a generation ago in creating jobs and industry - greatly increases the available pool of labor. Laws of supply and demand take effect, and the relative value of labor goes down. That much is pretty simple. When the cost of production goes down (as it has) and productivity goes up (as it has), profits increase (not talking strictly about the auto industry here obviously - that golden goose is just about cooked). Apart from stocks owned by pension funds (which, as we know, are rapidly going the way of the dodo), 83 percent of the stock market wealth owned by American households is owned by the richest 10%. 37.4% - over 1/3 - is owned by the richest 0.5%. And that figure is 10 years old. I'm sure it has gotten much worse. When companies reduce costs, they are doing what?: Adding shareholder value. In real terms, minimum wage today is lower than it was in 1950! In inflation-adjusted dollars, the minimum wage was $9.12/hour in 1968. I did an interesting comparison a while back, looking at a number of measures comparing 1962 with 2002. Unfortunately, I have tossed it a long time ago (and I'm not going to look it all up again), but a few things stick in my mind: - The average U.S. household, with increased working hours, decreased vacation hours, and the great increase in two-earner families, is working almost 3 times as many hours annually, per household, than in 1962 (this is paralleled by a vast reduction in community, social, and leisure time) - The average U.S. household is earning slightly less, per household hour worked, than in 1962, despite a nearly 300% gain (supposedly) in "productivity" - whatever that means - over the same period. We make quite a bit more money per household per year, but we are working much, much harder for it. - Then there is the above-mentioned income disparity, which as the last census shows, has returned to levels not seen since the gilded age. We have systematically dismantled our middle class. Reagan's treatment of the PATCO was the Fort Sumter of the neo-liberal attack on the middle class. We actually had a middle class in 1962. Now we just have a bunch of frazzled 2-earner families peddling faster and faster to hang on to the vestiges of the middle class lifestyle. - And lastly, in 1962 international trade represented about 3% of the GDP - at a healthy surplus. By 2002 it was about a third of GDP, and at an alarming deficit. Now, under those circumstances of 1962, remember that the U.S. had the big three automakers, plus Studebaker (for a short while longer) and American Motors. It was in fact, a vibrant and competitive industry, and people looked forward to the annual model introductions. We had three aircraft manufacturers, employing thousands and thousands of workers at good middle class wages. Britain and France each had one, and the Soviet Union had two. Now we have one. We had - how many consumer electronics manufacturers designing and manufacturing products here? Zenith, RCA, Packard Bell, Motorola, Westinghouse, Magnavox..... any of those names ring a bell? Almost anything you picked up was made here. And yes, the things those companies made, cost more in real dollars than they do today. In 1963 RCA color TV prices started at $495.00. That's $3,023.00 of today's dollars. (When they first came out in the 1950s, they were more than twice that.). My first trip to Japan in 1978 cost me $1,124.00 in airfare - $3,425.00 in today's dollars - basically my whole college fund. I can routinely find tickets for less than $600.00 now (and the number of available flights is about a third what is was then, despite the increase in traffic, and the airlines are bankrupt - they've been deregulated to within an inch of their lives). But I remember this: My parents had time to visit with friends and family. We didn't have a house full of Chinese-made crap, and we made do with one bathroom until I was about 12, but we did have vacation property and a boat, as did most of my dad's friends - middle-class tradesmen all - and they did it on one income. And when I first went to Japan, by God it was foreign, and far away. And they made all their own stuff there too - which amazed me, since I hadn't seen hardly any of it before. Now their stores are stocked with Made in China - just like ours, and their income disparity is growing and their middle class being destroyed too (I know this well, because I consult for many Japanese retailers, who frankly acknowledge this trend in their planning for the future). You may not be able to connect the dots, but they're pretty well lined up. Most of all. Most of all, in 1962 people here believed in a better future. Can you with honesty say that today? The jackass who left the barn door open should be shot. 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RichardJensen Posted January 23, 2006 Share Posted January 23, 2006 I trace a different line: The decline in income paralleling the shift from an industrial to a service based economy. Fundamentally, there is no reason why an unskilled service sector job should pay less than an unskilled job in manufacturing. And yet unskilled service sector work pays less. There you have, IMO, the crux of the problem. Unskilled workers are falling farther and farther behind, not because they're not in manufacturing, per se, but because service sector work doesn't pay as well. Any probing of why service sector workers get paid less must begin with an analysis of why and how the unions have failed service workers. ... Quote Link to comment Share on other sites More sharing options...
foxrun Posted January 23, 2006 Share Posted January 23, 2006 I trace a different line: The decline in income paralleling the shift from an industrial to a service based economy. Fundamentally, there is no reason why an unskilled service sector job should pay less than an unskilled job in manufacturing. And yet unskilled service sector work pays less. There you have, IMO, the crux of the problem. Unskilled workers are falling farther and farther behind, not because they're not in manufacturing, per se, but because service sector work doesn't pay as well. Any probing of why service sector workers get paid less must begin with an analysis of why and how the unions have failed service workers. ... And that problem is simply remedied by unionizing Walmart. :lol: Richard your circle might be intricately woven but it still spins. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 23, 2006 Share Posted January 23, 2006 And that problem is simply remedied by unionizing Walmart. :lol: Richard your circle might be intricately woven but it still spins. Hey do you think Wal-Mart (among other companies) SHOULDN'T be unionized? The unions took hold in this country when the average hourly wage earner was making less money and was less educated than today's Wal-Mart worker. You think service workers are too dumb, too poor, or too grateful for work to unionize? Well they weren't 100 years ago. Did you read CaptAmerica's description of his wife's treatment by Wal-Mart ('none of you are working full time, we forgot to tell you that, all of you are stockers, we forgot to tell you that, none of you have any benefits, we forgot to tell you that, and enjoy our four hour video on how bad unions are'). You think that company is doing right by its workers? No. Your union doesn't care about the people that are working at Wal-Mart, and that's a shame, because nobody else has done a thing for them either. Wal-Mart walks all over them, and your union just says, "well that's what you get when you lose manufacturing jobs". ... Quote Link to comment Share on other sites More sharing options...
foxrun Posted January 23, 2006 Share Posted January 23, 2006 Hey do you think Wal-Mart (among other companies) SHOULDN'T be unionized? The unions took hold in this country when the average hourly wage earner was making less money and was less educated than today's Wal-Mart worker. You think service workers are too dumb, too poor, or too grateful for work to unionize? Well they weren't 100 years ago. Did you read CaptAmerica's description of his wife's treatment by Wal-Mart ('none of you are working full time, we forgot to tell you that, all of you are stockers, we forgot to tell you that, none of you have any benefits, we forgot to tell you that, and enjoy our four hour video on how bad unions are'). You think that company is doing right by its workers? No. Your union doesn't care about the people that are working at Wal-Mart, and that's a shame, because nobody else has done a thing for them either. Wal-Mart walks all over them, and your union just says, "well that's what you get when you lose manufacturing jobs". ... Of course Walmart should be unionized, if it were possible. Look at what happened in quebec. Besides even unionizing Walmart would not do enough to address the issue of living wages. Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 23, 2006 Share Posted January 23, 2006 Of course Walmart should be unionized, if it were possible. Look at what happened in quebec.Besides even unionizing Walmart would not do enough to address the issue of living wages. Anything's possible. Besides, you unionize retail workers and service workers in the telecom industry, etc., and you get collective bargaining rights. You get collective bargaining rights, you can start achieving incremental increases in pay. It ain't fast and it ain't glamorous, but it works. You think Wal-Mart wants to find a hundred thousand scabs in order to avoid a strike at 2000+ Walmarts? Why is Wal-Mart afraid of unions in the first place? Because they know how powerful a union of floor workers, clerks, and stockers would be. ... Quote Link to comment Share on other sites More sharing options...
one2gamble Posted January 23, 2006 Share Posted January 23, 2006 It tooks a long time to unionize industry, it will take awhile to unionize the service sector also. Its as simple as that, once the Middle Class back snaps on the load of increased debt, declining wages and substandard educational opportunities unions will begin to form again. Unions, like our economy are circular in nature. Quote Link to comment Share on other sites More sharing options...
foxrun Posted January 23, 2006 Share Posted January 23, 2006 Anything's possible. Besides, you unionize retail workers and service workers in the telecom industry, etc., and you get collective bargaining rights. You get collective bargaining rights, you can start achieving incremental increases in pay. It ain't fast and it ain't glamorous, but it works. You think Wal-Mart wants to find a hundred thousand scabs in order to avoid a strike at 2000+ Walmarts? Why is Wal-Mart afraid of unions in the first place? Because they know how powerful a union of floor workers, clerks, and stockers would be. ... :lol: :lol: that was funny Richard do you have more :lol: :lol: Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted January 23, 2006 Share Posted January 23, 2006 :lol: :lol: that was funny Richard do you have more :lol: :lol: Maybe its time you AFL-CIO people start demanding more for your membership dollar. From where I sit, they ain't doing you any good at all. ... Quote Link to comment Share on other sites More sharing options...
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