Dear Friends,
It seems to me that one of the biggest factors in visiting this financial melt down upon us, is the widespread use of ingenious financial products, as a means of gaming the system.
An example of ingenious means to game the system is short selling. (Essentially betting that a company or money will loose value in a given time). The problem is that when you bet that a company or currency will loose value is that it is relatively easy to drive down the value of a company or currency. It is easier to salt the fields then to plant a crop. Especially for a person who wields extreme power. Historically people who have power have not had to live up to the standards that a regular person like you and I have to. So with no appreciable threat the powerful can short sell a currency or stock. Then using lies, rumors, innuendos of corruption, and other underhanded means to drive down the value. When the value is driven lower the trader then makes a huge profit. Of course the people of the nation, or employees and shareholders, are damaged.
Derivatives are another example. The market in derivatives has gotten so out of control that in 2007 it was 10x the total of WORLD GDP! Ten Times! That is so absurd, that in a reasonable world, people would be going to jail. And I don’t mean some country club I mean Folsom Prison. By the way, is Madoff in jail yet?
The Stock market and other such markets should be a good place for the average person to place his or her money. We invest with the assumption that the system is fair. When the system is not fair we loose and the corrupt win. The markets get out of balance by the average investor loosing even in an up market. This state of affairs cannot sustain itself. Boom bust cycles are largely a result. Can you remember AIG? We are on the hook for that one and many more. How are we supposed to come up with 10x WORLD GDP to bail out these corrupt S.O.B.s!?
The government is totally to blame in this Banking and Financial fiasco. To argue the most regulated industry went bust due to a lack of regulation is laughable. That is like the witch doctor saying to the patient that he must ingest MORE lead, he just hasn’t ingested enough yet. Yea enough to kill us! Lets have an independent council look into the Congress’s failure and the failure of every other governmental entity.
The SEC has been asleep at the wheel. They must not, in the future, let people use ingenious means to make money in the stock and mercantile markets. It is imperative that the SEC start doing it’s job and clean up the markets! We don’t need regulation we need common sense at the SEC.
This would be a department of the Numa. Keep the regulators honest. Punish people who don’t pay their taxes and would make us. Hold government’s feet to the fire. A dozen or so prosecutors with access to every phone conversation, every email, 24-7 surveillance of any governmental agency that is involved with the financial markets. They would be busy for awhile prosecuting government officials, but, the Elite would get the point pretty fast.
