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| There are some interesting changes in the Commitment of Traders profiles of several futures. Also some changing features in demand. Late today, I will post data & will get a lengthy newsletter out this weekend.
Friday, pretty much in all quarters, it was a Goldman Sachs day.
Some weeks ago I referred to some elements of our financial sector as 'a money separation process.'
The more information I glean in regard to Goldman & their public relation defenders, the more I get myself closer to my bottle of Lisinopril.
I have bounced around the investment community all of my life. It can be a dirty business. It has become a dirtier business.
If, for example, those of us on this forum were to form an investment bank, what is our mission? Our purpose? Our objective?
Fees. In some cases LARGE fees.
Since the late 1960's folks discovered the most rapid way to personal riches is to form a company, operate for awhile & soon issue stock (an IPO) & establish a market for the stock & the founders retain some stock or sell their stock, regardless, it can be a money machine.
One of the functions of an investment bank is to sell the stock-therefore, an investment bank must have wide contacts throughout the industry, form a syndicate to help sell the stock to the public: individuals, pension funds, insurance companies & etc. For this service the investment bank may take an 8% fee or it may range as high as 15% and frequently is based upon the "difficulty" of selling the issue. IF IT IS A PIG IN A POKE, the fees will be higher as generally a greater effort is required (and promotion) to entice buyers (in some cases suckers) to purchase this new stock at the Highest Possible price...the underwriter typically then OVERSELLS the issue so when the market for this stock opens, they have a short position which is used to place a bid under the market to stabilize the sales process.
When a company CEO or the Board of Directors of a company approach an investment banker--one of the first considerations of the investment banker is: "Can we sell this DOG?" One of the many steps in this process is to retain an accounting firm to prepare the pro-formas & to package the financial information to appear as favorable as possible.
So, accounting firms also receive huge fees in this process. DOES ANYONE ON THIS FORUM BELIEVE::: The accounting firm will say "OH NO, WE CANNOT HELP YOU ON THIS (PIG IN POKE) as it is pure fraud! It would not be fair to the investors!"
Okay, take a moment and look at accounting firms. Where is their vested interest? Large fees from security dealers or the occasional small fee from some individual wishing an interpretation of a stock prospectus. Again, if you believe accounting firms are looking out for the investor, read the next paragraph.
If you TRULY BELIEVE the above statement, then you should only place your savings into a certificate of deposit, or in a fruit jar in the floor of the barn; in any case your family or friends should never allow you to enter a brokerage office.
I do not speculate in New Issues. It is pure speculation & the entire process is dependent upon each buyer hoping to uncover another level of sucker ready to pay a higher price. I AM ONE OF THE FEW FOLKS WHO READ THE PROSPECTUS and I take it one step farther...I tear apart the prospectus and back off the financials until I discover exactly how much money the founders have in the deal. MOST NEW ISSUES ARE RIDICULOUS.
Ever since the 'founders of Wall Street' gathered under the buttonwood tree to buy and sell securities, the UNDERSTANDING HAS BEEN, AND IS, BUYER BEWARE.
Investment bankers make fees from underwriting new issues. They generate large fees from COMPANIES IN TROUBLE for which the investment banker dumps the product onto buyers. Investment bankers also generate fees from long established companies with sound financials who wish to expand. (investing) Investment bankers also generate what I call "skim" through overnight or weekend investments of YOUR MONEY which may be sitting in your brokerage account. Money is never idle. 1/16th of a percent on a few hundred billion dollars is a significant amount.
Okay. What has evolved over these past 20 or so years? SPECULATION!!! We all talk about how America has Dumbed Down...FOLKS...some of the dumbest & goofiest are in the money business. Does anyone think a pension fund committee, meeting with Goldman Sachs has a clue as to what some of these financial instruments are composed???
If you believe the above statement, again refer to the above paragraph regarding "if you truly believe."
NO. Typically there is a lot of salesmanship involved. Sometimes a few drinks, a fancy meal, maybe even a few 'hired ladies of the evening." Is this really a good product? One of the folks may ask..to which the salesman replies .."we would not be involved if it were not a sound product." HORSEPUCKY!!!
No folks. We live in an atmosphere of the blind leading the blind generating massive fees and IF YOU DO NOT UNDERSTAND the difference between speculation and investing --stick with what you do know.
Yes. I am very critical of our investment industry. It is laden WITH CORRUPTION at the top.
The spouse is updating our family tree & I am reminded my maternal grandmother was born well over 100 years ago in Bode Iowa.....MY OPINION. I would rather accept investment advice from a local citizen of Bode (never been there), whose well read & has not been dumbed down, than accept investment advice from one of the current Wall Street sharpies.
If there were a futures market in common sense, I would be a buyer every day as it is getting more scarce every day.
http://www.perspicuousrisk.com/
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Some Realities
