Fleeing The Sinking Ship
Over at Blonde Sense the Jersey Cynic notes that investors are leaving the markets. At lot of people have been forced to liquidate because of the economy, but even more seem to have decided that the ‘game is rigged’ and they don’t want to throw good money after bad. MF Global is just the latest in a series of failures by the regulators to protect investors from the market insiders.
Comrade Misfit featured an old quote by Jay Leno that rings true today. The ‘confidence fairy’ won’t be back until most of the crooks are purged from the markets … but then there won’t be anyone left to operate them.
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Playing in the U.S. stock market today is as hazardous as playing in the Russian stock market. If you don’t have the right connections to the right corrupt officials and/or oligarchs, you can kiss your money goodbye. The result is that investment in Russia is far lower than it would be in an honest environment, and the same is starting to become true here in America. Even in the Silly Cone Valley, investors are starting to wonder which of the startups are actual enterprises intending to compete in the marketplace and which ones are actually scams to take their money for the benefit of well-connected founders and venture fund managers. (The stories I could tell….).
Vegas and Monaco have honest games with known odds, a much better investment.
The rate of return is equal to the risk involved. High returns means high risk, i.e. gambling. These days even low returns involve high risk because there are no rules anymore. Stocks are selected and traded by programs, not people, and the people who understand the programs know nothing about the economy or markets.
Au contraire, there *are* rules nowadays. They’re just completely corrupt rules, like “You take without conscience or shame. If you see a blind man selling pencils on the street, steal the pencils. Steal his pennies. Steal his dog.” In short, our rulers view us as a nation of suckers, to be fleeced at will.
But the problem is, you can’t run an economy that way. Not efficiently, anyhow. What you end up with is a corrupt banana republic where people don’t even bother trying anymore because if they get ahead, the oligarchs will just find some new way to take everything away from them again anyhow, so why bother? Corruption on that scale corrodes everything in an economy. It just doesn’t work.
– Badtux the Non-corrupt Penguin
(thus why I’m not rich).
Well, the rule book is only available to ‘members of the club’, so they rest of us aren’t ‘privileged’ enough to read them.
You are damn straight it won’t work and it sure as hell isn’t capitalism by any stretch of the definition. It is feudalism with better PR, but it is still a matter of the biggest crooks sitting in the ‘castles’ with the serfs working for a pittance.
Oh, I think you and I know enough of the rule book to follow it if we wanted. Thing is, we have these little things called “ethics” and “morals” that would keep us from stealing a blind man’s pencils, pennies, and dog. One of our ruling oligarchs and their flunkies, on the other hand, wouldn’t feel a thing, they’d just do it and chortle.
– Badtux the Ethical Penguin
Yes, a conscience is a terrible failing in the current business climate. I blame on my parents and teachers who destroyed any chance I had at being a member of the 1%. Of course my ancestors played a part, buying land from the Iroquois rather than stealing it, and selling it off to settlers at reasonable prices while running a tavern. They could have set us all up at the top of the heap, like many of the Dutch in New York, but they insisted on dealing fairly and making a good living rather than amassing a great fortune. I was doomed from birth to be just an average working person.