3/12/2010

A system of crooks

Jonathan Weil wrote an article for Bloomberg in New York and is reposted in mypaper today. His main gist is that the robber bankers are blaming short selling for the ruins in the financial system and banks under their charge. Actually he said it is more than just short selling. He added, 'Neither short sellers nor rumours spread by speculators were to blame for any of these companies' collapses. Bogus balance sheets and incompetent regulators were, along with the panic that ensued once investors decided that they couldn't deny the reality any longer.' I want to add that it is the whole financial and trading systems developed by the geniuses trained by the best American Unis that is at fault. The Americans are awared now that derivatives is a deadly instrument and must be curbed. The SEC Chairman is asking for more measures to control derivative tradings and undisclosed deals. Her feelings are echoed in the big cities of Europe. Derivative tradings, short sellings, programme tradings, big fund and big muscles, are all part of a flawed system that is out there to cheat the small investors. And with regulators closing an eye, deregulations, or becoming participants to the scam, indulging in dark trades and providing a system that facilitates the big funds to rob the small investors, what can one expect? The financial crisis is only the tip of an iceberg and an early warning. The collapse of the world financial system is imminent if nothing is done to stop the robbers from what they are doing. Just ask, who is running all these banking and financial institutions into ruins, turning them into a big casino and con game? The Americans are pulling the rug from the feet of the robbers. But the silly Asian bourses are still dancing to the tune as if nothing has happened and nothing will happen. The derivatives and default swap deals and dark deals may be banned from the US and maybe Europe soon. But they will be welcomed blindly by their Asian counterparts. And the crooks will be welcomed with open arms to do what they were doing best in Asia, once they are banned from the US and Europe. Actually their tentacles are already in Asia and robber the investors of every penny they got left.

16 comments:

Wally Buffet said...

Cannot blame all these crooks too much though.

We, the little investors also very greedy, that's why we fell into the shithole.

This world is like that. Sex and money. Have you ever seen a cat who will not eat fish? Little guys like us fell into the trap because we hanker for more money. Lecherous hypocrites like PBM Jack got hit from shit hitting the fan blades when he succumbed to the sight and touch of young flesh. So one should not blame others too much. You reap what you sow.

Robert Tan said...

Both parties are to blame - the crook and the greedy or ignorant "investors".

I believe all crooks need to be reined in and be made accountable for their actions.

I also believe that individuals must also take responsibility and be held responsible for their own actions.

True, sometimes, a victim is truly helpless and faultless. But when one examines closely, most victims are at least partially at fault - as Wally said, sometimes it's greed. At other times, it may be careless or dangerously silly behaviour.

Sometimes, a victim fall into a trap with their eyes wide open -e.g., visit a casino when one has low "self-control" when it comes to gambling.

Whilst I agree crooks should be brought to justice, I think, except for very rare exceptions, all the rest of us must be willing to be responsible for our own actions. A person who is unwilling to take responsibility would and should always be given only limited, if any, rights and freedom. Freedom and rights can be heavy burdens, they come with responsibility and accountability. This is probably the reason why a minor who has less/limited rights and freedom also has less responsibility and accountability.

As Wally rightfully said, very often, we reap what we sow.

Chua Chin Leng aka redbean said...

Up to a point, buyer's beware can work. But when the big boys abused their position of trust to fleece the innocent and ignorant, it is a different matter altogether.

The man in the street can expect some standard of ethics and fair play from the big boys, and the regulators are there to ensure that it is not a one sided game. To think and accept toxic products for sale, no matter how they are coated, is a degrading of the moral standard of society. To accept that all is fair under the banner of buyers beware is irresponsible, a kind of collusion with cheats.

When a proposal or product is flawed, it must not be allowed to be sold. Period. Allowing it is criminal.

Can Toyota tell its customers that it is not to be blamed for the bad accelerator? Buyer's beware?

Wally Buffet said...

In the first place, no one pointed a gun to your head to say you must invest. You, after having made due diligence is supposed to know what you are getting into. You can always put your money under your pillow or invest it in a pig farm.

All investments, even bank deposits which are supposedly "safe" comes with risks. The higher your income expectations, the higher the risk exposure.If you made a windfall, albeit with the help of the crooks, I am sure you will not cry foul and run to the regulators. Similarly, if you lost your pants, no one as our much vaunted film director said is to blame except you yourself because you succumbed to your greed and placed your bets wrongly.

Every so called investment has a catch same as every food that you eat in Singapore is dangerous in some way or other for your health. Both have been so called cleared by the regulators. The key is to look out for yourself. Never ever attempt to get into something you do not understand like the palms of your hand. I don't know what blackjack or a roulette is. That's why I never enter a casino to get myself scalped, bloodied and impoverished.

Chua Chin Leng aka redbean said...

Wally, if your reasoning is acceptable, then there is no need to return any money to the losers of the toxic bonds. And Madoff needs not go to jail. It is the folly of the losers. Now I understand why the losers of billions take it squarely.

The casino is fairer and more respectable than many of the financial products and systems. They are upfront with the odds and the gamblers know exactly what they are in for. No gambler is going to blame the casino operators or call them cheats.

You call people cheats only when they cheated. In cheating, one can end up in court and behind bars. The casino does not cheat and is not allowed to cheat.

Robert Tan said...

I think all of us agree that the crooks must bear the consequence.

The issue is whether the victims should get awat scot free.

I think whilst some victims are 100% innocent, many are not so clear cut.

And where the victims are partially at fault, they must learn to be gracious enough to admit that they also contributed to their loss/suffering and not always push the blame to everybody else.

Although very often, we have sympathy for the victims, we start to lose some of this sympathy when victims start to totally shirk their responsibility. If we always bail out not so innocent victims, we will end up with a society of less responsible and accountable people who may continue to behave less carefully/more recklessly. After all, if a mistake is made, daddy will bail me out.......

p/s: Must emphasise that I am not siding with cheats, crooks or unethical persons/organisations. Just highlighting that degeneration of ethics and values may sometimes be happening on both sides of the coin.

Wally Buffet said...

Monies returned to losers in the toxic bond fiasco were made based more on political reasons rather than equity. There was no equity to speak of in the first place. It's all in the contracts, black and white and you signed on the dotted line.

Similarly, a guy like Madoff had to go to jail to appease the public baying for blood. It's either a fall guy or social disorder. Take your pick. And if I was the guy in charge, the choice is easy. Madoff was collateral damage.

As Robert said, there are no blameless souls on this planet. Somehow, every misdeed has two players to make it work. The crooks can cook all kinds of toxic broth but if there were no greedy gullies, non would be poisoned.

Chua Chin Leng aka redbean said...

Do we agree that the seller must sell a service or product that is of an accepted quality? Do we agree that the buyer of a product can expect a certain level of quality?

I think the Toyota case is a good example of the standard expected of seller and buyer's right. When the product is faulty, the blame is solely on the seller.

As for selling high risk products, the risk must be spelt out and the buyer must be reasonably expected to understand the risk involved. If not, then we don't need the regulators and the regulations and just let the toxic bonds continue to be sold.

Obviously something is seriously wrong about the product and how they are being sold.

Wally Buffet said...

Toyota's shortcomings were made glaringly apparent more by media hype than anything else.

Every manufactured product has a flaw, same as every walking human being is flawed. The difference is whether the flaw is discovered and how for certain reasons they are being made into mountains from molehills. I am under no misconception that the car I drive is flawless even if it's supposed to be. Somehow, even at the design stage, somebody may have goofed and it is only with the grace of providence that I can arrive at my destination safely because the time to hand in my passport is not due.

Robert Tan said...

Agree risks must be adequately disclosed.

I did not buy any of the minibonds, derivative products etc.

I think the issue is that risks are disclosed but perhaps the disclosures could be made more clearly.

If the seller has disclosed to the buyer that his returns is based on whether Lehman goes bust or not and the buyer still decides to invest because he thinks chances of Lehman going bust is very low, but in fact Lehman actual does goes bust, he cannot then now blame the seller for selling him that product....

The example is simplified. I'm sure the products sold are more complicated than that.

In any case, if one does not understand, don't buy/invest.

If one has done all due diligence but the sale was made through cheating and the buyer was 100% innocent(though this is probably going to be relatively rare, as most buyers must surely be aware that nothing is fool-proof), then maybe he can absolve himself from any responsibility.

Chua Chin Leng aka redbean said...

The American regulators are waking up to what the robbers have been doing and is trying to rein them in from their excesses and cheating ways.

Wally Buffet said...

Again, a wayang.

America thrives on cheating, scamming, conning and fighting. Take that away and you take away the very spirit of America.

Just bear with it and ride along like I do. Don't fight the system. Go with the flow.

Anonymous said...

"The American regulators are waking up.... "

Doesn't matter how many times they will say that they are waking up, the fact remains that they have been sleeping with the crooks all along.

The regulators are just showing the American public and the world that they are closing the front door, but will just let the crooks out by the back door.

The American public, I believe, have just about given up fighting the system that they know is rotten to the core. They just go with the flow, like Wally.

Chua Chin Leng aka redbean said...

America is ripe for Communism. Don't think this is impossible. It was impossible for China and Russia to become Capitalist.

Anonymous said...

The Americans are waking up though many will miss the good old days and the wonderful old ways. Most are religious and god-fearing, the only trouble was, they were not afraid of sin.

Chua Chin Leng aka redbean said...

Actually the Americans have never missed their good ole days. Then is was shooting at Indians. Today the choice is much wider, from Arabs to Afghans and possibly Asians on the cards.

They have legends like gunfight at O K Coral or something like that.