6 thoughts on “THE HIGH-CLASS CRAPSHOOT”

  • John says:

    And thus the great dillema of the stock market — these days people are raised on the idea that they need to invest. That the only way they can possibly save for retirement is to invest in the stock market. And it turns out that the stock market is little more than a glorified game of craps. A massive, country-spanning gambling operation.

    Neocon "glories of the free market" economic fantasy, as usual, predicates itself on the idea that massive corporate and financial institutions are these mythical entities that couldn't *possibly* be concieving of harming the public for their own financial gain. That people in positions of unfathomable power would never, ever abuse that power to further their own rise to cosmic levels of wealth.

    Unfortunately, here in reality, the machinations of the market to actively harm consumers and the public at large for their own gain is very well-documented.

  • JohnR says:

    It's only a crap-shoot for us. Just as US governments at all levels have embraced casino (read "criminal") financing in the form of lotteries, so to have businesses (presumably including Mafia, Inc. – cf Bernie Madoff). The whole idea is for the casino to lose a few to encourage the vast herd of suckers to lose a lot. Insurance, the stock market, government, it's all run the same way now, and not content with steady income, the frenzy for the greatest possible profit margin has pushed us to where we are now. The thing is, all the present "fixes" seem to be band-aids on the punctured artery. There's no real attempt (presumably because there's no real desire) to fix the underlying problem.

  • A Cat says:

    I think your metaphor is a bit off. In your metaphor you are merely a collector, you have no real expertise in the stamp domain while the people buying the AAA rated financial products were supposed to be experts in their domain.

    The rating agencies are corrupt. If you dig around over the last few years of this debacle you'll find leaked emails from analysts saying the security they are rating as AAA is a POS, but hey, we need to close this deal to get paid.

    You think your 401(k) is bad? Think how worse off you would be if you were an amateur investor picking individual stocks with your retirement savings? Your balance would be a lot lower right around now I wager.

    The failure of most retirement investors is in believing they don't have to monitor their 401(k) and reallocate their investments in the face of large fundamental changes to the economy or the stock market as they believe their fund manager will do this for them. Most mutual funds are so large they can't get out of any bad positions fast enough to save your investment. Oh, and another thing, they are managed by idiots who can't even beat an Index fund, so there is a very good chance they don't know things have gone south until someone else tells them.

    I realize if everyone did this the whole 401(k) thing would kinda implode. Frankly, The stock market is a horrible vehicle for retirement investment as somebody has to lose in order for other people to retire. This is not a very socially equitable solution. I'm not sure enough people care about social equality anymore that this will change in my lifetime.

  • ladiesbane says:

    @A Cat: you mentioned leaked emails from analysts saying certain triple-A rated securities were crap. I'm looking for more info on that, and the chaff is so thick that I'm asking for help. Do you recall any key names of analysts, rated entities, publications, or other specifics? I am looking both for evidence that inappropriate ratings were applied, and that it was deliberately done for gain. Thanks.

  • A Cat says:

    @ladiesbane:

    I'm pretty sure I saw it on Calculated Risk in the last few years. Either linked from the comments section or a main post. These were emails leaked from an investigation if I remember correctly.

    The impression I got from the comments about the emails in question was that everyone on the inside knew about the shady ratings, but how dumb those analysts were for talking about it in a medium which gets stored away for several years due to legal requirements.

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