Tuesday, January 13, 2004

The Stock Market, trading broken dreams

The LAT reports that Tech stock prices may be inflated. Surprise, surprise, surprise. Meanwhile the NYT reports that the SEC (Security and Exchange Commission) that regulates the stock markets has found that most mutual funds are a bunch of dirty crooks who pay kickbacks to brokers in order to funnel business to them.

Federal officials announced a new front in the investigations into the mutual fund industry on Tuesday, saying they had uncovered widespread instances of brokers receiving undisclosed payments for steering investors toward specific funds.

Initial results, indicate that up to 14 out of 15 unnamed funds were found to be engaging in this unethical behavior. Personally, I was all for mutual funds, IRA's, and 401-k's. The epidemic corruption found on Wall Street however by Elliot Spitzer in his crusade against corruption in the most well-known names on Wall Street has revealed a broken system. Talking to Republicans on the street, their response was almost uniformly "Take them (the crooks) away in cuffs! Personal accountability!". This is of course the rational response from Republicans who believe in more enforcement rather than more regulation. However, the Bush Administration is falling down on the job. More and more Americans are shown to have been cheated or swindled by powerful moneyed interests, and the only thing coming from the White House is silence while crooks walk away with sweet-heart deals or mere slaps on the wrist. For stealing golf-clubs in California (under three-strikes) you can go away for 20 to Life, but if you swindle millions upon millions it's a fine and back to the golf course for you! That's their idea of justice!

Initially the idea of creating personal retirement accounts sounded like a great idea to me. However the truth is that the greedy thieves on Wall Street need to be reined in first, or they're just going to steal ordinary everyday Americans blind. A massive conversion of retirement investments from the public system to stock and bond investments would be a perfect opportunity for con-men in suits in order to rip off every penny that the ordinary guy had saved up for his old age. Let's clean up Wall Street before we even think about trusting them with the bankroll!

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