标题: [转贴] 10 reasons to shun stocks till banks crash [打印本页] 作者: 何鸿燊 时间: 2010-12-7 01:26 标题: 10 reasons to shun stocks till banks crash
Paul B. Farrell
Dec. 7, 2010, 12:01 a.m. EST
Commentary: Stocks a sucker bet in a rigged game with big meltdown ahead
By Paul B. Farrell,
SAN LUIS OBISPO, Calif. (MarketWatch) — Do not buy stocks. Not for retirement. Not in the coming decade. Don’t. Huge risks.
Wall Street is a loser. Stocks are their ultimate sucker bet. And they’ll sucker you again. You’ll lose again, bigger than the last decade. Wake up before Wall Street banks trigger the next meltdown, igniting mass bankruptcies.
Here are 10 more reasons not to bet at Wall Street’s casino … wait till after they implode:
1. Warning: American stocks are a high-risk sucker bet
That’s Peter Morici former chief economist at the International Trade Commission. Is Main Street waking up to Wall Street’s con? Maybe: “With corporate profits breaking records, Wall Street anxiously anticipates the return of the individual investors to the stock market. It may be a long wait, because the little guy may have concluded investing in stocks is a sucker bet.”
Feds target investment fraudFederal officials, including Attorney General Eric Holder, announce the results to date of "Operation Broken Trust," a three-and-a-half month investigation targeting investment fraud.
America’s divided into two stock markets: One for Wall Street’s rich insiders, another for Main Street’s suckers: “Investors, as opposed to traders, buy stocks in companies whose profits they expect to rise. The conventional wisdom says stock prices will follow profits up, but over the last two business cycles, that simply has not happened.”
From 1998 to 2010 profits rose 203%. But the S&P 500 was up just 7%. Still, naive investors buy Wall Street’s sucker bet.
Who’s pocketing huge profits? Rich insiders: “Because most of the increased value created by higher profits has been captured by hedge funds, electronic traders, private equity funds, and aggressive M&A shops, free standing and at major investment banks, which have multiplied over the last two decades.”
Warning: With the resurrection of the GOP and Reaganomics, Wall Street will skim more from Main Street, get even richer. And yes, you’ll lose more.
2. New ‘Big Short’ dead ahead: derivatives con game will crash again
In a Bloomberg story, “Big Short” author Michael Lewis asks: “Why are the same Wall Street banks that lobbied so hard to dilute the passages in the Dodd-Frank financial overhaul bill banning proprietary trading now jettisoning their proprietary trading groups, without so much as a whimper?”
The answer’s simple: Wall Street’s sneaky, will do anything to keep their derivatives casino running hot: Insiders “have no intention of ceasing their prop trading. They are merely disguising the activity, by giving it some other name.”
3. Hedge funds shorting China: Warning, USA is collateral damage
Get it? China may well crash first. Fortune’s Bill Powell interviewed hedge fund kingpin Jim Chanos of Kynikos Associates: He’s “betting that China’s economy is about to implode in a spectacular real estate bust.” China is “an economy on steroids.” In a Charlie Rose interview he said “China’s on an economic treadmill to hell.” If so, then all of Wall Street’s highly promoted emerging markets are also sucker bets.
Another hedge fund player warned: Chanos “is shorting the entire country,” including a company “Goldman Sachs recommended as a buy … the listing for the Hong Kong Stock Exchange … China’s Merchants Bank, one of Beijing’s largest.”
Back in the 1980s Japan “grew largely on the back of capital investment” then turned into “a capital-destruction machine, and that’s what China is now. You have an economy that’s 60% fixed-asset investment, and not even in the developing world is that sustainable.”
Chanos won’t pinpoint the timing or the trigger: “He just believes it’s coming” and he is betting on it. Reminds us of Henry Paulson shorting Goldman Sachs’ crooked deals before the 2008 crash.
4. New insider trading indictments killing Main Street confidence
Investor distrust of Wall Street’s rigged casino will skyrocket in 2011. Before the elections an AP-CNBC poll found 61% of investors had already lost confidence in the market, thanks to the extreme volatility; 55% believe the market’s rigged to favor insiders.
It’ll get much worse as the FBI/DOJ investigations of insider trading add more indictments and perp-walks. As more facts surface, this could get bigger than Enron and the SEC mutual fund fraud suits combined: More proof of Wall Street’s rigged game.
5. Banksters perfect gambling record prove stocks a rigged game
Last year we reported that Goldman Sachs made over $100 million profits a day for 23 days in one month. This year the con game has gotten even bolder.
Morici says “that J.P. Morgan and Bank of America went through the entire third quarter without a negative trading day, no losing days on proprietary trades. Unless you believe in perfection, something stinks about the information they are using. If someone is winning all the time, then someone else is losing. That’s the ordinary investor. Stocks have become a rigged game.”
Yes, America’s 95 million average investors are suckers in a rigged game.
6. Wall Street is socially worthless, exists only to make insiders rich
In the New Yorker, John Cassidy writes: “Much of what investment bankers do is socially worthless.” Wall Street exists solely “to make itself very, very rich.”
Yes “worthless,” but “for a long time, economists and policymakers have accepted the financial industry’s appraisal of its own worth, ignoring the market failures and other pathologies that plague it.”
Worse, “even after all that has happened, there is a tendency in Congress and the White House to defer to Wall Street.” Why? Wall Street’s huge lobbying war chest. Soon all this will come to a disastrous climax, Wall Street will implode on blind greed.
7. The Fed is America’s worse nightmare, a $3.3 trillion moral hazard
Moral hazard simply means no-consequences for Wall Street’s total incompetence in triggering the 2008 catastrophe. As a result, Wall Street insiders came away believing they can take bigger and riskier bets in the future because they will get away with it next time too.
Why? Because America’s suckers will be dumb enough to bail them out the next time, too, with no consequences when they fail miserably again.
Last week the Fed made the moral-hazard risks more obvious by releasing 21,000 documents showing how an arrogant Bernanke approved $3.3 trillion in cheap-money taxpayer bailouts to incompetent Wall Street banks, blue chips and even foreign banks in Switzerland, France, etc. Bernanke’s making fiscal policy, and he’s a tragic disaster. When Obama reappointed him last year, we echoed author Nassim Nicholas Taleb, called it Obama’s “worse domestic policy blunder.”
But it can get worse: Caving to the GOP on Bush tax cuts to the rich will funnel billions more of our tax dollars into their rigged game. Final proof Obama is Wall Street’s co-conspirator in their class war against 300 million average Americans.
8. Wake up to a new normal: no-growth, deflation, jobless recovery
In his latest newsletter economist Gary Shilling, a long-time Forbes columnist, warns: “Real economic growth rates of 2% or less are likely through 2011.” But we need 3.3% just to keep up with population growth.
So “high unemployment remains a political problem … with weak economic growth, looming deflation, and the dollar and Treasurys remaining the safe havens in a sea of global trouble.”
Warning: America’s new era of no-growth, deflation and a jobless recovery will continue for years, resembling Japan the past two decades. Worse, brutal deficit cuts will trigger riots, as in England, France.
9. Privatize Social Security: New GOP Congress loves dumb ideas
Here’s Reaganomics politics at its numbest. Alan Sloan wrote in Fortune: “Privatizing Social Security: Still a Dumb Idea.” The idea was “slaughtered when George W. Bush proposed it.” Yet many GOP millionaires in the new Congress campaigned on privatization:
“You’d think that the stock market’s stomach-churning gyrations — two 50%-plus drops in just over a decade — would have shown conclusively the folly of retirees having to bet their eating money on the market. But you’d be wrong.” They’re about to resurrect it from the dead. Why? Simple, the GOP is the party of the rich.
Yes, it’s that simple: Wall Street’s casino would love to get their hands on another $20 trillion of your retirement money, to gamble with in their derivatives casino.
“Why is privatizing Social Security such a turkey? Because retirees shouldn’t have to depend on the market’s vagaries for survival money. More than half of married couples over 65 and 72% of singles get more than half their income from Social Security.” And “for 20% of 65-and-up couples and 41% of singles, Social Security is 90% or more of their income.”
Imagine if our Social Security had been privatized in the 2008 meltdown: It would have done more damage than nuclear warheads, totally wiping out the American economy.
10. Warning, Wall Street will lose another 20% of your money by 2020
We have been making these same arguments for a long time: Wall Street lost trillions in the stock market since 2000, a year in which the Dow Jones Industrial Average peaked at 11,722. It’s barely 11,000 today. Adjusted for inflation, Wall Street has lost over 20% of your money the past decade. Wall Street’s a loser.
And worse, Wall Street will do it again by 2020, lose another 20% of your retirement money.
Warning: Stocks are a sucker bet at Wall Street’s rigged casino. Buy stocks and you’ll lose. In fact, you’ll probably lose more that 20% when the third meltdown of the 21st century explodes … bigger losses than 2000 and 2008 combined … when Wall Street’s too-greedy-to-fail banks finally collapse … when they cannot push the second Great Depression downhill one more time … when taxpayers revolt, refusing to bail out our corrupt banking system … when the American people force Congress to return to tough 1930’s regulation.
Folks, Wall Street is suicidal, a kamikaze, playing a deadly game of Russian roulette with America’s future … Wall Street’s self-destructive greed is driving America to the edge of total failure … Wall Street’s behavior is so predictable … like a blind addict trapped in denial, unable to see the deadly consequences of their behavior.
And unfortunately, Wall Street will not wake up until they bottom out … until it’s too late … until they take America down with them … they cannot see … cannot stop … because Wall Street has lost its moral compass.
