Thursday, March 4, 2010
Re-focus on Getting Shafted
I took a look back to October of O8 to reconnect with how I was feeling about the downturn of the economy. Here is what I found. I think it is a good rant, and appropriate. This was before a lot of information emerged on the reasons why. Enjoy a look back at the Ralph Account...
I still have 15 years to go before I get out and (for now) I am stuck in the prison of our countries investment culture. This is due to my prior belief and/or confidence in the investment system--doled out by the wisdom of experts, investment heroes, family members, legacies etc. How was I was stupid enough to believe these people, my father, father in law, just about every "got their shit together" know-it-all banker and/or money manager of every generation before me--that investing in mutual funds and the market, indexing, diversification, if you do it right will yield a nice return. Yes, there are ups and downs. Don't look at those, think long term...hello? kuh-chick...Boom!
I want to know just one thing...Who gets my money when the market turns downward? Where did it go? It started as cash, turned into paper and now the value is lower and I am out everything that I have gained and a chunk of what I have put in. The cash is still somewhere. Where the hell is it? Was it spent by poor business managers investing in more money making enterprises? Yes-- but somebody still has the cash, no?
The cash is still cash; money that has already been dispensed/expensed through typical rampant overhead general ledger accounts within most of our top 500 publicly traded companys. Those who's inability to handle inflation, creeping costs and lack of diversification has lead them to the "down time". The money has been systematically paid out to the employees working in these large corporate cultures--the companies who's inefficiencies are so great that perspective can only be brought to the attention by expensive outside consultants. The money is lost on these people, bad loans, poor inventory management, declining sales and lost leading ventures in attempts to build markets. The money sits in cash, dispensed away to the bottom feeders.
The cash sits in every bank account of every employee of every horribly run big business out there--the executive employees and "tick-bird" vendors of these business (neither likely capable of cash flowing their own lifestyles) sit pretty good as long as more cash is raised. These people, the executives and vendors of entities who go to the ceiling on raising capital in order to feed the machine--the "big ship" operators who, with one slight mis-navigation off course, run aground. These guys, the fat cat executives and executives of the vendor supported companies, have my money. The bastards with the golden parachutes.
Roll up 500 of these big ship operators and hand them over to the investment companies with their hands into everything including the lending market. These are professionals at raising cash with fancy catalogs and marketing materials. Let them make money on the money they raise, spend it doing whatever they want to encourage investment. By all means, lets let them pay themselves a lot of money.
Let them enhance the governments opinion with some of that cash through special interest, lobbying, buying off the feds in order to get a government agency to loosen controls, restrictions, to feed the lending machine. Let people really think the investment system is working, lots of money lending and then some, lowering the standards, the economy is intact, looking good as long as it is open sea. Hey, while things are sailing good, lets let the politicians fight over power with some of that money, because there is much to be lost if power is lost. Lets derail the system in order to get control during an election year and blame it on ambiguity. Lets point fingers at the political powers, the greater of two evils. Those who continue to get the money from special interest have a lot to lose-- those who want it have a lot to gain. A portion of my money sits in the pocket of every politician on the take.
I think it is all bullshit, we have all been taken, the government is to blame and I will not put one more penny in the market, ever. Instead, I will invest in my business, what I have control over--what I can form daily opinions on, have influence over, make changes to and get immediate results, because I SAY SO. This is what I plan to do. How can we really trust anyone investing our dollars when greed plays such a role? I will earn cash and buy and sell stuff for a margin greater than what money managers can make for themselves. The system is bullshit, don't get caught up in it. Start a small business and earn cash.
Oh, don't think it ends there. You get cash, the government takes it. More later.