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An Antidote to Corporate Media
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"The disconnect between actual investment and stock is what causes companies to make stupid decisions driven entirely on quarterly results"
So the SEC requirement ( SEC act of 1933/34) to file quarterly financial results called 10Q was not the reason? Is that what your saying. You think they do it voluntarily?
"You have to start out clubbing at your level and work your way up until you are a member of the elite society….play your level and take steps to move up."
And how many did it by just simple hard work NOT clubbing at any level. 10 years at our SJ offices, I watched on Friday/Saturday nights as kids poured into clubs. Today those who sacrificed did well, not needing to join any part of the elite society to get ahead.
4X
2009 Nov 29, 2:38pm
“You have to start out clubbing at your level and work your way up until you are a member of the elite society….play your level and take steps to move up.â€
And how many did it by just simple hard work NOT clubbing at any level. 10 years at our SJ offices, I watched on Friday/Saturday nights as kids poured into clubs. Today those who sacrificed did well, not needing to join any part of the elite society to get ahead.
Exactly, that is what I was inferring with the comparison of the club scene to the work environment. In life you start out at the bottom, no matter who you are you were once a broke college student who depended heavily on Mommy and Daddy. You build up your expertise then you profit from that point on.
This is what I was referrring to when I stated "play your level and take steps to move up."
“The disconnect between actual investment and stock is what causes companies to make stupid decisions driven entirely on quarterly resultsâ€
So the SEC requirement ( SEC act of 1933/34) to file quarterly financial results called 10Q was not the reason? Is that what your saying. You think they do it voluntarily?
It's part of the reason, but not really to blame.
See, they required the filing requirements in 1933. By the 1950s, when most of the depression-era stock fear was gone and people were investing again, you were lucky to find out what a company's stock price was a week later. Investors in a company got the quarterly numbers a few weeks after they were reported to the SEC. Nobody could make decisions overnight, and people generally bought and held stocks that they believed in.
Once everything went digital it all went to hell as well. We never really made any attempt at addressing this.
The basic reason for quarterly reporting is so that the SEC can make sure that the company is telling the truth, but as we know the likes of Enron will gladly lie to the SEC anyway, just like they were lying to their shareholders before.
I believe that, nearly 80 years later, we do need some updated filing requirements.
For one, I'd mandate trading blackout periods for *all* shareholders around the reporting period, not unlike those required for corporate insiders. In general this means that you have a "trading window" of about 3-4 weeks a quarter where you're allowed to buy and sell the stock. Day traders would be dead, which would be a huge step in the right direction.
There are other changes that might help too, although ultimately this is mostly bandaid fixes. The real answer is to eliminate common stock, but I'm highly doubtful of anything like that happening.
"The basic reason for quarterly reporting is so that the SEC can make sure that the company is telling the truth, but as we know the likes of Enron will gladly lie to the SEC anyway, just like they were lying to their shareholders before."
Golly Kevin! thanks for the insight it gives new meaning to the task i been doing for the past two decades.
Thomas Wong CPA
"I believe that, nearly 80 years later, we do need some updated filing requirements."
Loony!
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Now is a critical time in our nations history. As a nation, we have failed to regulate Wall Street so that honest, transparent and legitimate transactions occur there. As a result, we have “too big to fail” financial institutions that does whatever they want to do. These financial institutions can take extremely risky financial gambles without the risk of failure. Why? Because our federal government will bail them out and give them whatever they want even though these same financial institutions are essentially insolvent and bankrupt.
The second American Revolutionary War will not be fought with bullets, but will be fought for control over Congressional action and Presidential authority. We are not fighting an oppressive king in this second American Revolutionary War but rather an oppressive Wall Street oligarchy. And we allowed this oppressive oligarchy come to power by our own lack of vigilance.
If you do just a little research, you will find that our nation's largest banks and lending institutions are: 1.) hording cash, 2.) not making loans, 3.) paying their executives and employees as if they are not failed institutions dependent of the federal government, 4.) allowed to hide the huge number of bad mortgage loans they have on their books and manipulate a real estate market to their advantage, 5.) allowed to continue to lobby our elected officials in Washington with the largest number of lobbyists ever.
This is financial devastation without representation. Why would we the people of the United States want to have a Wall Street oligarchy run our country and our monetary system into the ground?
Today FHA, Fannie Mae and Freddie Mac are making the vast majority of our nations real estate loans, and these are all government organizations. That means that the vast majority of the risk in real estate lending today is being carried by the federal government via American taxpayers and our currency.
Why won't private individuals provide capital to make real estate loans today? It is because our mortgage lending and real estate industries have been corrupted and manipulated to support all the bad loans that have been made since 2004. Since many of the extremely large number bad mortgage loans that exist today at our nations largest lenders have NOT been foreclosed on, written down or resolved appropriately, the real estate market and real estate lending has become completely unstable with enormous risk due to the very real possibility that real estate values will continue to decline dramatically in the foreseeable future. When, not if, but when these houses come on to the market as foreclosed houses, it will lower real estate values; and right now the federal government is allowing these mortgage lenders to keep this “shadow inventory” of houses off the real estate market so as to keep real estate values artificially high.
Normally when a bank fails, the bank is taken over by federal regulators, stock holders lose everything and assets are sold to the highest bidder. The risk of failure is what motivates for profit companies to make sound decisions. Take away the risk of failure and you have a situation where mortgage loans will be made to people that have no chance of ever making the mortgage payments as promised and agreed to. In other words, take away the risk of failure and you destroy the very backbone upon which our great nation was founded.
Why hasn't our nation's largest financial institutions been taken over by federal regulators and allowed to fail? The talking points “reason” that was given to our federal government to tell everyone by the Wall Street Oligarchy was that our nations largest financial institutions are/were “too big to fail” of course. So the obvious solution is to break up the “too big to fail” institutions. If a “too big to fail” company is in fact too big to fail then it must be broken up so that it can fail without causing a financial catastrophe. But right now, the federal government is so afraid of the Wall Street Oligarchy that they not only will not break them up but will pay them to modify loans, complete short sales, and foreclose on real property. No financial institution should get paid for having made bad lending decisions or for resolving a bad lending decision. Right now this is government for the lenders by the lenders and of the lenders.
Welcome to the second American Revolutionary War. It is the American people versus the “too big to fail” financial institutions. The “too big to fail” financial institutions will fight us, the American people, with a strength and power we have never faced before. Our victory in this war must be the unconditional surrender of these “too big to fail” financial institutions. We must be willing to pay any price to secure the victory over these “too big to fail” financial institutions.
These “too big to fail” financial institutions will resort to any kind of blackmail and extortion to remain the large, influential and failed institutions that they have become. The executives who run these “too big to fail” financial institutions are extremely overpaid, have run their companies into the ground, and will stop at nothing to remain in power. These “too big to fail” financial institutions largely control the Federal Reserve Bank which controls our nation's currency.
How we can win this war.
We must give our representatives in Congress and the President an ultimatum to do what ever it takes to win this war or get thrown out of office. We, the people, have the power to control and win this war but only if we use our collective influence on our elected officials in Washington DC. To remain silent and not demand of of our elected representatives in Washington DC that they win this war is the equivalent of supporting the enemy. The “too big to fail” financial institutions will win by default if we continue to remain silent. The real reason we are in this horrible financial situation is because we, the people, have ignored this problem for far too long, and have allowed our Congressional representatives to pass laws by and for Wall Street firms.
If we lose this war then our real estate and financial markets will remain in a perpetual state of instability lacking the honesty, integrity and ability to fail required for our free society to flourish. The “too big to fail” financial institutions will control more and more of our lives unless we stand up against them.
Will we as Americans get angry and rise to the occasion to defeat this Wall Street Oligarchy or will we as Americans continue to be the weak, easy to manipulate populace we have been so far in this war? I hope and pray it is the former and not the latter. Now is the time to become patriots one more time. Now is the time to care. Now is the time to act.
#housing