I decided to copy and paste this post from last April in lieu of the $50 billion dollar Madoff scandal. Frankly I do not know how anyone has any confidence or trust in anyone except the Lord Jesus. What purpose does the SEC serve........none, continue reading and you will see.
Remember back in the days when insider selling was illegal? Well not anymore. Today we see big corporate hot shots selling off large amounts of stock just before the bad news hits Wall Street and somehow, they are getting away with it. Is there any accountability anymore? What happened to regulation and/or regulatory control? Isn't Congress supposed to enforce laws to regulate such behavior? How come it seems Congress just isn't working anymore? Or perhaps they are just capitulating to the pressure of these big corporations.
Inside trading is a felony under federal law, yet the privileged and well-positioned take advantage of secret information to profit at the expense of ordinary investors. Billions of inside trading is going by corporated executives and they are getting away with it. Why is this? Perhaps it is because these corporate executives are in a perfect postion to use secret information to trade in their company's stock. In the 20's, Congress prohibited fraud by corporated executives, but what about now? Well now we have the SEC and corporate executives got them to issue a new rule. This rule allows executives with stock options to exercise the option, immediately sell the stock and keep the profit. The SEC rule created the "stock option flip-trade." Executives can now bail out at the first smell of bad news inside the company. They could exercise options, instantly sell the stock and pocket the profits, without putting up a penny or taking any market risk. The abuse is obvious. Corporate executives, with the benefit of sophisticated management information systems that provide instantaneous updates on internal trends, know precisely when to trade. So as soon they see performance short-falls are coming, they can flip trade, put stock sale plans in place or increase the shares they are selling. Several Enron fraudsters, including Mr. Lay and Mr. Skilling used this "safe harbor" to sell off huge chunks of their Enron stock-option stock, pocketing hundreds of millions of dollars. Despite Congress' stringent prohibitions against quick-flip stock trades or stock sales based on secret information, both have become the order of the day.
Recently, SEC Enforcement Director, Linda Thomsen, admitted to "seeing deliberate, calculated misconduct", "rampant" insider trading. She also voiced suspicion that executive stock sale plans were being abused. The financial world is littered with abuses. Such suspicions include Yahoo when it encountered long delays in launching its new internet ad placement technology. When the delay was finally revealed, Yahoo's stock collapsed from $44 to $22, inflicting $25 billion in loses on Yahoo's shareholders. While the top executives at Yahoo were struggling with these undisclosed problems, they unloaded 33 million shares of their Yahoo stock for more than a billion dollars. The CEO and CFO each sold 80% to 90% of their shares.
Dell computer disclosed serious product quality and customer service problems and restated years of prior financial reports to eliminate millions in profits. Dell stock fell from $42 to $19, inflicting $30 billion in losses on shareholders. Yet before this came out, Dell executives unloaded 98 million shares of stock for $3.3 billion. Dell's CEO and CFO, both ousted due to the scandal, sold 98% of their stock. Eight other executives sold more than 90 % of theirs. Most were "quick flip" stock option sales.
Remember Countrywide that was plastered all over the news with the subprime mess? Well, when it's lax lending practices and dubious accounting became public, its stock collapsed from $45 to $20, costing shareholders $13 billion. Yet Countrywide's insiders had unloaded 21 million shares for $765 million before the bad news. More quick-flip stock option sales. The CEO, Angelo Mozilo sold millions of shares pocketing $232 million while he monkeyed with his stock-sale plan to increase his sales before the stock collapsed.
At Forest Laboratories, a drug manafacturer, the CEO sold off 3.8 million shares, all stock-option shares, for $221 milllion before studies linking its main drug to increased adolescent suicide came out. Then the stock collapsed from $78 to $36, costing shareholders $15 billion.
At home builder Toll Brothers, top insiders unloaded 14 million shares for $612 million, before revealing slowing demand and a decline in orders that caused that stock to plummet from $56 to $33, costing shareholders $3.5 billion.
And finally there is AOL TIme Warner, where the corporate insiders sold more than 22 million shares for more than $750 million, as they put together and watched fall apart, the worst merger of the century causing hugh losses and a stock drop from $59 to $9, inflicting $150 billion in losses on shareholders.
If someone robs a convenience store, his crime may earn his 10 years in prision, yet corporate insiders regularly use secret information to profit by millions and millions with impunity, even though insider trading is a felony and their misconduct harms hundreds of thousands of investors, including pension funds charged with investing the life savings of millions of Americans. The punishment doesn't fit the crime because there is no punishment. The SEC's mandate is to protect investors and police fraud in our securities market. So why is this happening and what is the SEC doing about it? Despite the SEC Enforcement DIrector's complaints about insider selling, the SEC is doing little about the current epidemic.
In each of the above examples of insider bailouts, institutional investors brought securities class-action suits. But they all suffer from problems due to the SEC's protective insider-trading rules. As a result, corporate insiders virtually never pay up any of their insider trading proceeds when such suits are settled. This kind of stock profiteering by corporate insiders UNDERMINES investor confidence in the markets and the federal agency that is supposed to protect them. If investors lose confidence, they invest less and economic growth and prosperity are impaired. Rather than engage in empty rhetoric about insider trading, the SEC should step up its enforcement efforts and police the markets like Congress intended it to.
Remember the movie "Wall Street" with Michael Douglas and Charlie Sheen? Michael Douglas played the character Gordon Gekko and in the movie Mr. Gekko said, "Greed is good". Well, no it is not!!!!!! When greed is unrestrained, it's yields terrible and disasterous results. But unfortunately man does not care because greed resides in his heart and he loves his sin.
Thursday, December 25, 2008
Sunday, December 14, 2008
Politics as usual..........
When I think about the current financial crisis facing this country, I can not help but think of all the deregulation and the cavalier attitudes of our leadership and why Congress obviously does not care much what their actions portray to the perceived public. Is the United States a democracy (my question mark is not working on this computer). I sure the heck do not think so and I am sure many others share my sentiment as well. Perhaps this is why Congress has its lowest rating (about 28%) in decades.
Just recently I had my car window smashed to pieces and my pocketbook stolen and mind you, this was in a community park. (of course I have my own theories about what REALLY happened, but I will choose not to elaborate on that right now). When I spoke to the Palmer Twsp. police officer (in Easton, Pennsylvania) over the phone to make a report, he told me that this has been happening quite often. When I asked him why a sign was not posted to alert the public, he said that it would make our community look bad. Well folks, we all know what that is...............politics, just like everything is today. We do not want God to look bad, so we do not warn people about sin and damnation. We ignore doctrine for the sake of peace without much resistance. We continue to borrow and add to our National debt........all the while ignoring the tidal wave that is approaching. Why do we do this.
According to our government, the nations chronic deficits are not a problem as long as they remain under a certain percentage of the GNP (excluding the cost of the war and future entitlements) and that current levels are historically sustainable. The national debt is cumulative though and when you have to keep borrowing to pay off old debts, the wave gets bigger and threatens to drown you (our national government now pays more in interest than for education, health care, and homeland security combined). And keep in mind that our government keeps borrowing from Social Security and Medicare just to pay the interest on that national debt. They should at least have the decency to keep their bloody paws off programs that are funded by workers and promised to them. The creators of these programs intended for them to act as trust funds and that the greedy politicians were to keep their hands off of them.
Even Japans treasury pays about one-fifth the interest rate that we pay. We have basically become the most profitable sub-prime borrower or its preferred customer in the global finance market. And the more we borrow, the higher the premiums they will throw our way. And what about bankruptcy. Remember just recently Congress revamped the bankruptcy laws making it harder for individuals to file bankruptcy. However, corporations some how skirted this law.......as usual. Do you actually think that Congress is acting on behalf of the American people or are they really working for the corporations and receiving clandestine favors from their banking friends. When the banks and credit card companies realize that outlawing bankruptcy is not going to stop people from going broke, they are going to have to rethink their strategy. What IS certain, is that Congress probably will not compel them to do anything, which borders on criminal negligence. When the average Joe falls on hard times, there will be no generous donor to bail him out in exchange for his vote, nor could he expect to have his credit report cleaned up in a matter of minutes.
The two-tiered system we have put up with for too long has shielded our representatives in Congress from appreciating both the magnitude and the urgency of the problem facing middle-class Americans. I think a great idea is to have congressmen forced to live on minimum wage and get food from a pantry or have the President go to a county hospital for treatment and wait an hour and half in the emergency room. Why are there not more lobbyist for American families on important issues. And why should the financial industry be allowed to treat those in power any differently than ordinary Americans. Should corporations, which keep in mind, were originally chartered to have the same rights as individuals, be allowed to keep those rights.....e.g., bankruptcy, while living, breathing citizens are stripped of them. If Congress does not want families to have the option of getting out from under, corporations and investments banks should not enjoy that privilege either. CEOs who have the foresight to pay themselves millions of dollars before their companies tank should not be the only ones afforded a fresh start.
And on the issue of privacy. Is it not amazing how these investment banks and large corporations are given this privilege as well. When the average Joe defaults on his creditors, he will be threatened and harassed by an army of faceless voices who are allowed to share everything they know about him, including his address, his phone #, the names of his relatives and neighbors, as well as his entire financial history. If consumers are to have a fair chance, the practice of information sharing needs to be curtailed, not expanded, and consumers must have a bona fide right to opt out. Our current system only allows consumers to opt out of receiving solicitations; it does nothing to guarantee an individuals constitutional right to privacy or protect them from malevolent collectors. The government should respect the law and not join in the game by purchasing private information from the credit bureaus. And agencies like the IRS should not be allowed to share personal information with credit bureaus or debt collectors. Personally, I feel that our credit bureaus and the FICO credit scoring system is quite similar to what the mark of the beast will be like. You know...........you can not purchase food, clothing, or shelter unless you bow down and worship the anti-christ.
I have heard the term, floor rate, which means that is the lowest a credit card company will drop their rate. Why does not Congress address this issue as well. Why are not the banks interest rates capped. We see that paw shops and casinos are regulated so then how does a $12,000 debt suddenly balloon to a $50,000 debt. It is unfortunate that regulation has been viewed or made tantamount to socialism and deregulation has been mistaken for freedom. Where are the checks and balances. Are there not supposed to be limits on interstate banking. I wonder how many people think Congress has been asleep at the wheel for too long. Or how many people bought Hank Paulsens pleading with Congress for the $700 billion bailout, that what is good for banking profits, is always good for the American people. I wonder how many think It is time to create a new metric in order to judge how many middle-class Americans are joining the ranks of the poor. The poverty line is archaic because it is based solely on food (this poverty line is defined as 3 times the cost of feeding a family of 4). Is that the only factor to determine if someone or a family is in poverty. What about exorbinant healthcare costs, housing costs, and insurance costs.
I think too many have collectively thrown their hands up and said that the financial industry is too big to regulate so we give up and we will just capitulate to their demands. Or better yet, perhaps Congress is actually afraid of the BANK. You know when Abe Lincoln was assassinated, Mary Todd Lincoln, his wife, screamed.....Oh, that bank. I wonder how many people have been knocked off because they did not cooperate with the BANKS agenda. Money yields and amasses incredible power and control.
And interestingly, regulation was instigated to protect the financial system from a Depression-style meltdown. Perhaps that is a prophetic statement.
Just recently I had my car window smashed to pieces and my pocketbook stolen and mind you, this was in a community park. (of course I have my own theories about what REALLY happened, but I will choose not to elaborate on that right now). When I spoke to the Palmer Twsp. police officer (in Easton, Pennsylvania) over the phone to make a report, he told me that this has been happening quite often. When I asked him why a sign was not posted to alert the public, he said that it would make our community look bad. Well folks, we all know what that is...............politics, just like everything is today. We do not want God to look bad, so we do not warn people about sin and damnation. We ignore doctrine for the sake of peace without much resistance. We continue to borrow and add to our National debt........all the while ignoring the tidal wave that is approaching. Why do we do this.
According to our government, the nations chronic deficits are not a problem as long as they remain under a certain percentage of the GNP (excluding the cost of the war and future entitlements) and that current levels are historically sustainable. The national debt is cumulative though and when you have to keep borrowing to pay off old debts, the wave gets bigger and threatens to drown you (our national government now pays more in interest than for education, health care, and homeland security combined). And keep in mind that our government keeps borrowing from Social Security and Medicare just to pay the interest on that national debt. They should at least have the decency to keep their bloody paws off programs that are funded by workers and promised to them. The creators of these programs intended for them to act as trust funds and that the greedy politicians were to keep their hands off of them.
Even Japans treasury pays about one-fifth the interest rate that we pay. We have basically become the most profitable sub-prime borrower or its preferred customer in the global finance market. And the more we borrow, the higher the premiums they will throw our way. And what about bankruptcy. Remember just recently Congress revamped the bankruptcy laws making it harder for individuals to file bankruptcy. However, corporations some how skirted this law.......as usual. Do you actually think that Congress is acting on behalf of the American people or are they really working for the corporations and receiving clandestine favors from their banking friends. When the banks and credit card companies realize that outlawing bankruptcy is not going to stop people from going broke, they are going to have to rethink their strategy. What IS certain, is that Congress probably will not compel them to do anything, which borders on criminal negligence. When the average Joe falls on hard times, there will be no generous donor to bail him out in exchange for his vote, nor could he expect to have his credit report cleaned up in a matter of minutes.
The two-tiered system we have put up with for too long has shielded our representatives in Congress from appreciating both the magnitude and the urgency of the problem facing middle-class Americans. I think a great idea is to have congressmen forced to live on minimum wage and get food from a pantry or have the President go to a county hospital for treatment and wait an hour and half in the emergency room. Why are there not more lobbyist for American families on important issues. And why should the financial industry be allowed to treat those in power any differently than ordinary Americans. Should corporations, which keep in mind, were originally chartered to have the same rights as individuals, be allowed to keep those rights.....e.g., bankruptcy, while living, breathing citizens are stripped of them. If Congress does not want families to have the option of getting out from under, corporations and investments banks should not enjoy that privilege either. CEOs who have the foresight to pay themselves millions of dollars before their companies tank should not be the only ones afforded a fresh start.
And on the issue of privacy. Is it not amazing how these investment banks and large corporations are given this privilege as well. When the average Joe defaults on his creditors, he will be threatened and harassed by an army of faceless voices who are allowed to share everything they know about him, including his address, his phone #, the names of his relatives and neighbors, as well as his entire financial history. If consumers are to have a fair chance, the practice of information sharing needs to be curtailed, not expanded, and consumers must have a bona fide right to opt out. Our current system only allows consumers to opt out of receiving solicitations; it does nothing to guarantee an individuals constitutional right to privacy or protect them from malevolent collectors. The government should respect the law and not join in the game by purchasing private information from the credit bureaus. And agencies like the IRS should not be allowed to share personal information with credit bureaus or debt collectors. Personally, I feel that our credit bureaus and the FICO credit scoring system is quite similar to what the mark of the beast will be like. You know...........you can not purchase food, clothing, or shelter unless you bow down and worship the anti-christ.
I have heard the term, floor rate, which means that is the lowest a credit card company will drop their rate. Why does not Congress address this issue as well. Why are not the banks interest rates capped. We see that paw shops and casinos are regulated so then how does a $12,000 debt suddenly balloon to a $50,000 debt. It is unfortunate that regulation has been viewed or made tantamount to socialism and deregulation has been mistaken for freedom. Where are the checks and balances. Are there not supposed to be limits on interstate banking. I wonder how many people think Congress has been asleep at the wheel for too long. Or how many people bought Hank Paulsens pleading with Congress for the $700 billion bailout, that what is good for banking profits, is always good for the American people. I wonder how many think It is time to create a new metric in order to judge how many middle-class Americans are joining the ranks of the poor. The poverty line is archaic because it is based solely on food (this poverty line is defined as 3 times the cost of feeding a family of 4). Is that the only factor to determine if someone or a family is in poverty. What about exorbinant healthcare costs, housing costs, and insurance costs.
I think too many have collectively thrown their hands up and said that the financial industry is too big to regulate so we give up and we will just capitulate to their demands. Or better yet, perhaps Congress is actually afraid of the BANK. You know when Abe Lincoln was assassinated, Mary Todd Lincoln, his wife, screamed.....Oh, that bank. I wonder how many people have been knocked off because they did not cooperate with the BANKS agenda. Money yields and amasses incredible power and control.
And interestingly, regulation was instigated to protect the financial system from a Depression-style meltdown. Perhaps that is a prophetic statement.
Tuesday, December 9, 2008
Another Pearl Harbor.......
If you genuinely cared about someone would you warn them if they were about to go off a cliff. Of course you would, that is IF you cared. Unfortunately today we see most people, including so-called Christians, that do NOT care. With the likes of Joel Osteen and Billy Graham, to Rick Warren, it is clear that most folks do not have any comprehension, much less awareness, of the impending doom and evil that is prevelant in this world. We chalk off conspiracy theories as comedy and we joke about the Emergent Church we no real sense of urgency in our hearts of how bad things will get. Perhaps that is left only to the prophets of impending doom.....much like those in the old testament who likely lamented day and night of the wickedness they were well aware of. Unfortunately these prophets were stoned, back stabbed and disregarded as dirty old dish rags.
How fortunate for the government when the masses do not think for themselves. This is what Hitler said when he was ruling the Third Reich. Hitler used his propaganda machine in Joseph Goebbles to further advance his plans and all the while the masses believed it. Only a few, discerning people who knew better were aware of the evil. They were not stupid or ignorant. We see how far Hitler advanced before anything was done. What a shame it is when we see people capitulating to the evil around them by joining the crowds and refusing to take a stand.
We see this in the ecumenical movement in the church. With Evangelicals joining hands with Catholics, Mormons and Jehova Witnesses. Yet if anyone stands up against it, they are labeled divisive, when in reality, it is they, the disobedient ones, who are divisive. They are clearly causing the brethern to divide over those who will be obedient to God and those who will not. It is more expedient to be political. It is more expedient to be lucrative, according to their actions.
In the early churches, Christians were persecuted, hunted down and murdered BECAUSE of their faith. They would not compromise for anything. Their allegiance was to Christ and His Word, not this world. You can not love God and this world at the same time. Either you love one or the other. But you can not love both.
Love not the world, neither the things that are in the world. If any man love the world, the love of the Father is not in him. For all that is in the world, the lust of the flesh, and lust of the eyes, and the PRIDE of life, is not of the Father, but is of the world. And the world passeth away, and the lust thereof; but he that doeth the will of God abideth forever.............I John 1:15-17
How fortunate for the government when the masses do not think for themselves. This is what Hitler said when he was ruling the Third Reich. Hitler used his propaganda machine in Joseph Goebbles to further advance his plans and all the while the masses believed it. Only a few, discerning people who knew better were aware of the evil. They were not stupid or ignorant. We see how far Hitler advanced before anything was done. What a shame it is when we see people capitulating to the evil around them by joining the crowds and refusing to take a stand.
We see this in the ecumenical movement in the church. With Evangelicals joining hands with Catholics, Mormons and Jehova Witnesses. Yet if anyone stands up against it, they are labeled divisive, when in reality, it is they, the disobedient ones, who are divisive. They are clearly causing the brethern to divide over those who will be obedient to God and those who will not. It is more expedient to be political. It is more expedient to be lucrative, according to their actions.
In the early churches, Christians were persecuted, hunted down and murdered BECAUSE of their faith. They would not compromise for anything. Their allegiance was to Christ and His Word, not this world. You can not love God and this world at the same time. Either you love one or the other. But you can not love both.
Love not the world, neither the things that are in the world. If any man love the world, the love of the Father is not in him. For all that is in the world, the lust of the flesh, and lust of the eyes, and the PRIDE of life, is not of the Father, but is of the world. And the world passeth away, and the lust thereof; but he that doeth the will of God abideth forever.............I John 1:15-17
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