Monday, March 23, 2009

Where should we start to investigate so we can fix the stock market?

Let me start with just one situation that may have taken billions of dollars out of our pockets and somehow disappeared down a rabbit hole in the last years. It a long story and this is just one of many that all contributed to the demise of our hard earned money.

The DTCC is one of the organizations that are supposed to keep the markets oiled and moving. It facilitates and acts as an intermediary in the transactions of security’s and settles disagreements in those transactions as an unbiased broker. Form their own website:

“DTCC, through its subsidiaries, provides clearing, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives. In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with their distribution networks.

DTCC's depository provides custody and asset servicing for 3.5 million securities issues from the United States and 110 other countries and territories, valued at $28 trillion. In 2008, DTCC settled more than $1.88 quadrillion in securities transactions.”
One major problem here is that no one seems to regulate them!

The Congressional Research Service, a Library of Congress think-tank with a single client: Congress. A member of Congress requests a study on a subject of interest, and CRS researchers produce it. The CRS is one of the most respected institutions in Washington, DC, and its reports are universally considered non-partisan, objective, and thorough.

On February 24, 2009, the Congressional Research Service published a 40 page report, “Who Regulates Whom? An Overview of U.S. Financial Supervision” (Mark Jickling, Edward Murphy, CRS, February 24, 2009) as the title suggests, the report is a primer on the parts of the US financial system, and who regulates what part. The Summary section from that report says this:
“A number of financial markets are unregulated, including some of the largest. No federal agency has jurisdiction over trading in foreign exchange or U.S. Treasury securities; nonbank lenders fall outside the regulatory umbrella; and hedge funds, private equity firms, and venture capital investors are largely unregulated. (although their transactions in securities and derivatives markets may be)

This report provides an overview of current U.S. financial regulation: which agencies are responsible for which institutions and markets, and what kinds of authority they have….This report does not attempt to analyze the strengths and weaknesses of the U.S. regulatory system. Rather, it provides a description of the current system, to aid in the evaluation of reform proposals.”

If you want to know exactly who is responsible for what this is a great place to start. This report is invaluable to really figure what needs to be changed, along with the real changes that need to be addressed by Congress to make sure that the marketplace can’t be ruined, like it has been in the last few years. We should all be asking our representatives if they have been reading it and if they understand it. They certainly need to if they want to fix what’s wrong in the system. But there are some holes in the system, one of those being the lack of any regulation or oversight of DTCC that are not addressed in this study.

Why is this so important and how does this play into the collapse of the market?
Well since DTCC brokers the deals, they see the moves in the market. They should be able to tell when someone is cooking the books and when transactions are taking place that are phantoms. It is truly the first place to start the investigative process to figure out where all this money has gone and who has it.

There will be many more installments on this subject that I will be writing over the course of the next few months, stay tuned!

Cramer, Stewart and Our F*$$ing Money

The Daily Show recently aired a series of shows that attacked the media, CNBC in particular and Jim Cramer, host of Mad Money. While it was a good start to reveal what has been a really incredible orgy of thieves, charlatans and crooks along with one of the most egregious acts of media malaise and insider doping of the markets, it was just an ice pick trying to chip away at an iceberg the size of New Jersey. As Jon Stewart said, “This is not a F*$#ing game.”

If you didn't catch the show you can here:
It's really a shame that this very real story has only been covered by The Daily Show. It deserves much more!

It’s really a shame the Daily Show staff didn’t do a little more work in preparing Jon Stewart prior to the show. There could have been a much deeper discussion (inquisition) of why the market failed and how we can fix it, rather than simply the interview that took place. As I say all this, I was both entertained and saddened by the show. It was one of the only real floggings of one the financial community’s media moguls on a national program. We need to have a whole boatload more of this type of exposure. At the same time, it was not as in depth or as aggressive, or as pointed as it should have or could have been. Given the limited opportunity to broil someone, who may bear huge responsibility in the market collapse, I wanted the flame up on char not simmer. I wanted Jim Cramer in cuffs and Jon Stewart with a cat-o-nine tails or a 24 volt battery and wet sponges. I want the folks that stole our retirement accounts, our life savings, and our companies to pay the price they deserve.

While the market plunge may have been started by a housing bubble, that burst, it was like a boil on our butts. The collapse of the market was something akin to falling over a cliff while being chased by a bee. The bee being the housing bubble, it alone wasn’t deadly but the fall could be. One of the real culprits in this adventure was the unregulated Hedge Funds and their Naked Short Sells. Along with bogus phantom stocks in circulation from foreign markets that didn’t exist in the real world and are NOT legitimate stocks nor were they ever delivered to their owners.

Since last summer I have been investigating what I believed to be the real, behind the scene reasons and who was killing our economy. The parties that I thought were involved are still elusive, but what I did find in this little investigative journey was astounding.

Not only is this a very closed “club” like environment, where they will most often cover each others naked rumps. The brokers, financial media, the hedge fund managers, the banks, the insurance companies, the private and public investigators and regulators all seem to want to either cover it up, or walk away from the growing pile of evidence, like some mountain of dairy farm by-product. Like an ill wind, blowing in from Chino of old on a hot day after a rain, this one really stinks and it’s still hanging in the air.

To see more about what I'm talking about check out this blog:
Very well done! Very in-depth, very confusing if you don't have a clue how the whole system works, but if you can wade through it you will have a much better idea of what's been going on and who is behind at least some of it.

Friday, March 13, 2009

Do I want the President to Fail?

Do I want him to fail as President? NO!
Do I want him to fail as a liberal socialist, YES!
Do I want to see an increase in government intrusion into matters that are those "left to the states or to the people"? NO!
Do I want the nation to be successful? Absolutely!
Do I want laws enforced when it comes to the stock market, securities and financial instruments? YES! This would have prevented a great deal of the mess we are in right now had the funding been granted when requested on the several occasions that it was requested and then denied by Congress.

Do I think that the President has much of a clue how this all works? Nope, not much, not in the real world, but I hope he and Congress wake up soon. It's past time the SEC and other investigative units are fully funded, so they can actually do the job they should be doing and recover at least some of the money that has been criminally made, stolen, or otherwise fraudulently pilfered over the last few years in the markets world wide. I have been doing extensive research on this issue for a while now. What I have found boggles the mind and I will be sharing some of it in the very near future.

Do I think the President is really going to make it all right again and recover the money that was stolen by all these folks from you and me and our 401k’s and IRA’s? I doubt it, from his actions so far. That would put more money into the market and really make the right kind of change in stabilizing the market and the rest of the economy as well.