There is a certain trust required for any investment to be made. You have to trust that the party on the other end of the investment is solid, believable and honest.
If you place your savings in a bank at 2%, you expect to get your principle back plus the 2%. Would you trust anyone to deliver you that 2% plus your principal? If you would, please give us all your money today. We will take your retirement money, any savings, anything you have, and promise to pay you 2% just based on our word.
Those operating our banking system and the American stock markets abused America’s trust. They allowed fraud and complex and risky schemes to riddle their operations. They concealed it to get your money, which they used to play in a high risk virtual casino in which they reaped the rewards risking your capital. Your reward was paltry, while their rewards were astronomical. The bulk of the risk fell on the American taxpayer, stock and bond investors, and small business, who all did not realize the tidal wave was about to strike. It all went swimmingly well until the virtual casino called in their chips, and their chips were America’s savings, retirement funds and pensions.
Where are your savings now? Essentially, you have been sold a bag of goods. Investment houses, the government and those selling you services have lied to you for decades. Now that the lies are starting to become more evident, every new lie becomes a new straw on the camel’s back. Would you like to know where your savings are? For many Americans, they are gone, stolen by the companies and system our government allowed to steal and squander them. America trusted them, and paid a dear price.
This was a bipartisan lie. Conservatives, moderates and liberals were involved, and in many cases the people in power, such as Alan Greenspan were not even elected officials. It is easy to believe that as more evidence comes to light, more of these individuals will be exposed as criminals with vested interests in stealing our nest eggs to play their high risk game and appear affluent and successful in our eyes rather than appearing as the criminals they truly are. CEOs made hundreds of millions of dollars at your expense, Congress took credit for an economy built on nothing but air, and they all encouraged risky investments to fund it all.
Lies of duration are the ones that you cannot prove except statistically, so people have to have some expertise to confirm they are lies. Those that do not have the expertise must depend on these so-called experts to guide them, but what happens when you realize the experts either have no expertise, or were fabricating their evidence to match their objectives? For example, a financial adviser that makes money selling stock funds that uses faulty or fabricated charts that tell you that you should be invested mostly in stocks because, historically, they outperform other investments. Their presentation conceals the real risk, and these experts are motivated to mislead you because their livelihood is based not on building your retirement, not on saving for your children’s education and not on saving for that rainy day, but instead on getting you to take on risk so they can profit.
In 1985, Merrill Lynch was caught red-handed lying to their own investors. It wasn’t the first time, and it wasn’t the last. Merrill was fined 10 million dollars after robbing their hapless customers of billions.
In 2002, Henry Blodget, among other top investment analysts at Merrill Lynch, told investors that stocks were worth much more than they actually were. The same advisers were panning the stocks they were recommending within the organization. They were caught when emails were discovered that clearly stated that the statements being made to investors were lies. Blodget was charged with civil securities fraud by the U.S. Securities and Exchange Commission. He settled and was barred from the securities industry for life (although he still provides investment advice through a fraudulent media, recently panning GE at its absolute low). Blodget paid a $2 million fine and $2 million disgorgement after robbing investors of billions. Merrill paid $100 million in fines which didn’t even cover the commissions paid by investors that lost billions. The institution should have been shut down. Government barely gave them a slap on the wrist and allowed them to continue their fraudulent activities until they finally imploded this past year.
Bernard Madoff is another great example of how our trust in our American institutions has been destroyed as the lies and deception become more evident. Madoff was the the head of one of the largest institutions in America. The NASDAQ. Do you invest in stocks managed by the NASDAQ? If you invest in small cap stocks or tech stocks, you likely do. This man was a criminal beyond imagination. How does anyone have any faith in that institution now? Where is the credibility when the head of the entire NASDAQ stock market ran a ponzi scheme that that bilked the savings of millions of investors? We didn’t just have the fox minding the henhouse. We had the fox designing the henhouse to facilitate the theft of the most chickens possible, and all with the total complicity of our SEC, who, according to a recent 60 Minutes segment, were well aware of Madoff’s scam since at least 2002!