7/18/2009

Blind to our own destruction

The green movement is gathering steam to warn the human specie that they will destroy themselves in their folly to exploit mother earth to its fullest. By employing technology and the cunning of the human mind, they harvest the land, farm the sea and eat up everything beyond their replacement rate. We burn and consume so much natural resources and fossil fuel that the temperature will become too high to sustain many life forms. But this road to our self destruction will have many more years to go. The fastest and shortest road is to destroy the world economic and financial system. We have been warned. It is so easy when we are blind to our greed. When everyone is singing, Greed is Good, and believing in it, and participating in the ripoff, the very people who are there to manage this insatiable appetite, become part of the marauding party, we are doomed. We will not learn as long as the benefits to the few cheats and swinders are shared among the leaders. All will party at the expense of the small guys, the losers, so they called them. It is pointless for the small guys to kpkb, useless, no one will listen to such foolishness in the wilderness. Let me bring in the big guns. I was reading Paul Krugman's article in the ST this morning, The only good news is at Goldman Sachs, he said. The writing is on the wall. Yes we will commit the same sins again and again. And the regulators will join in and say good, go ahead. Goldman Sachs is making a lot of money again and is going to shower its employees, especially the top manager, with tons of money, just like yesterday. They will pat their backs again and said how clever. But that is not the problem. The problem is how they make the money, in Krugman's words, 'financial firms...directed vast quantitites of capital into the construction of unsaleable houses and empty shopping malls. They increased risk rather than reducing it, and concentrated risk rather than spreading it. In effect, the industry was selling dangerous patent medicine to gullible consumers.... While other banks invested heavily in...toxic waste...selling to the public at large...Goldman ... made a lot of money selling securities backed by subprime mortgages - then made a lot more money by selling mortgage-backed securities short, just before their value crashed... All of this was perfectly legal, but the net effect was that Goldman made profits by playing the rest of us for suckers. And Wall Streeters have every incentive to keep playing that kind of game.' This modus operandi is not confined to just selling toxic products. The stock markets are operated under very similar principles. The big funds, with the help of technology, managing information, will sell down stocks and force out the small and weak investors before buying back at rock bottom prices, at any opportunity or negative news, real or imagery. Then they will buy back frantically and unload at much higher levels to the same suckers. And all this time the fundamentals of the stocks remain unchanged. The process is repeated every other day. And the regulators of stock exchanges knew what was going on, all perfectly legal. And they have vested interest to keep playing the game or let the game go on.' The excuse is caveat emptor as long as there is no blood on the streets. As long as there is no mass protest like the toxic bonds, the game will be legal. When greed rules the head, greed is good. Selling snake oil is fine as long as the few will amass a fortune from it and the suckers continue to pay willingly. There is no qualms and no need for moral responsibility. The chase for rapid economic growth, the high property prices and the property game, all falls into the same modus operandi. Create demand to drive up prices when there is no need to, but for the greed of profits or economic numbers.

12 comments:

Wally Buffet said...

Greed IS Good but it is not for the faint hearted, the stupid nor those who cannot afford to lose.

No one forces anyone to invest in toxic products or structured deposits. No one forces anyone to queue up to snap up properties that they cannot afford. If Greed overrules one's mind then who is to be blamed?

The financial and stock markets work on the basis of herd mentality whether or not the fundamentals support one's evaluation or not. It is more a psychological game than an investment. In a staring game, the one who blinks first is going down the tube.

Regulators can only do so much. Even legislated law has many loopholes that any one with a rudimentary understanding of the law will be able to exploit. The key really is self protection. Don't venture into any investment that you don't understand. Don't put a cent on something when you have not done due diligence. Above all, when you invest, don't put yourself in a position where you will lose sleep or worry until your hair turns white. It is not worth it.

For the unsophisticated, put your money in the CPF for total and absolute safety. Next, fixed deposits in at least double A rated banks. Lastly, if you are really paranoid and by nature nervous, have a good night's sleep on a pillow stuffed with your hard earned cash and some duck feathers. If you don't make money, at least you wake up refreshed, smell the roses and go fishing with equanimity.

redbean said...

not true. the regulators have a moral responsibility to ensure that the playing field is level. if not, there is no need for regulators. if the field is not levelled, the regulators have failed.

that is why toxic products are not allowed, casinos need to be regulated and the odds predetermined. and that is why we have regulators for the finance industry as well as the stock market.

that is why we have this thing called govt, govt for the people. if the fundamental principles are ignored or violated, the govt and regulators must be held responsible and accountable. they are not there just for fund and to collect big fat pay.

Wally Buffet said...

In life the "playing field" is never ever level. I don't know about you but how come I have to stay in a 3 room HDB in a garbage dump block and Bill Gates stay in a palace with a private bay all owned by him. Regulators are there to provide the FRAMEWORK and reasonable governance to ensure that there is no overt malpractices but truth be told, regulators cannot and should not be too interfering in all aspects of the economy and investments. To do so would be stifling and would sound the death knell for free economic activity and enterprise. To cite a simple analogy, the LTA and the police is there to provide you with all the necessary rules, regulations, equipment etc. for one to drive safely. But if one is reckless and maybe with a little bit of bad luck, there is an accident, must we blame them for not guaranteeing that we would have a safe trip?

As it is, we have a very mollycoddling govt. to the extent that they have become a "nanny". The regulations which they are going to implement such as discouraging Singaporeans from entering the casinos by levying an entrance fee and allowing the families of gambling addicts to petition for barring entrance is to say the least farcical if not comical. Nowhere else in the gambling world is this the normal practice.

Anonymous said...

If they say greed is good, what else can you say?

If they say the small guys are too foolish to realise that greed is good, so be it.

If they want to destroy this earth, eat up everything in the shortest possible time, use up everything in the shortest possible time, who can stop them?

If they want to corner all the wealth of the world and put it into a few people's hands, let them be.

We come into this world empty-handed, we will leave empty-handed. The sooner one realise that, the less one will want to be bothered with such aspirations.

Lost Citizen

Wally Buffet said...

Hehe, Lost, looks like we both are in the same boat. Came here in our baby suit and go also in our baby suit. But even though I don't have much other than my 3 room HDB, my dog, my computers and my books, and not forgetting the wife, I am happy. But soon, after selling the flat to the PRC sucker, I will have some money to put on Morgan Stanley, another one of those financial titans that will be back on glory road once again, soon.

How about you? Although you are "Lost", I hope you are not always unhappy too!

:-)

Anonymous said...

Hi Wally

I am lost, not so much in the literal sense, but lost in my ability to fathom what is going on in this world, particularly in this little red dot.

On the contrary I am perfectly happy with what I already have.
No ego, no worries and no debts.

What other unneccessary things can I wish for?

Lost Citizen

Wally Buffet said...

"Contentment, even in poverty, brings happiness; discontent is poverty, even in riches."

Confucius

redbean said...

the minibond case, the selling of fake degrees by private schools, are not difficult to detect. and you don't need much nannying but a bit of effort to prevent the damage. we are nannying in all the wrong places.

and we are creating our own problems because of greed. the seeds are planted and the problems will grow and mature in the not too long future. there are things about running a country that cannot be run like a private commercial business. a govt has responsibilities to its people, not just making money from the people.

Matilah_Singapura said...

redbean's sweeping untrue statement:

> The fastest and shortest road is to destroy the world economic and financial system. <

No. It is nuclear holocaust. There are more than enough weapons to destroy human civilization several times over. All it takes is for some nut job to take over the weapons and start pressing buttons.

Economic systems, eco systems are all recoverable. Sure, there will be suffering and a decrease in standards of living, but eventually, over time we can recover enough to start rebuilding.

Nuclear holocaust OTOH is total devastation and destruction.

redbean said...

drinking poison is the surest and fastest way to die. but not many will do it. taking drugs and die slowly, without knowing is a favourite.

Jaunty Jabber said...

Saving is the first step of investment.

When people don't save but invest first, they are sure to lose.

There are opportunities in the market, but these good chances to gain are meant for people who are prepared (those who saved).

Anonymous said...

Come on folks, what is there to preserve and conserve ? Doomsday was long predicted though it is just commonsensical.

The end is always continue by a new begining, life goes in cycle.

Let it be !