June 18, 2008 4:41PM
Dow 12,000 and Beyond
By Cheryl Casone
I’m sitting here watching the Dow, and trying to figure out if I actually care or not. Seriously. I don’t like seeing us so close to that level, the psychological level we talk about, but I am also looking at the volume. It is not heavy volume, and it hasn’t been since the summer began. I kind of felt we were going to have a “low volume, high volatility” summer, and well, I am being proven right today.
It is troubling hearing from the investment banks this week. Sheila Bair of the FDIC says we should regulate them like we regulate traditional banks. What do you guys think? This is when I really enjoy being a journalist, and hearing from all sides. I’m not sure how I feel. I understand the reason we need accountability, but I also worry that opening up the books at the investment banks plays their hand a little too well.
What am I talking about? Wall Street can be compared in many ways to government. There are government secrets, things that even though we should be told about, we are not. This is because of security.
I think there is similar argument to be made about investment banking. Privacy concerns of those with the money, and the return risk it could impose. We live in a free country, and people are free to invest in private, and their investment strategy is private. Your conversation with your doctor or your lawyer is private, and so should your relationship with your investment bank. And, I am leaning towards the belief that we run the risk of hurting what is in our best interest, and that is dividend paying stocks of investment banks, and the dividends we get from the companies they represent, and merge, and advise.
You want to see more people go private, and less growth? I can’t help but wonder if you’ll get it if the investment banks get under Uncle Sam’s thumb.
You guys agree? Don’t? Please post your thoughts.
CC
Comment by Justin
Jun 18th, 2008 at 6:00 pm
No regulation. Instead, let people eat their loses and stop printing up money. When you do away with the consequences of bad investment, you destroy capitalism and bring in socialism for the well connected, at the expense of the American tax payer (through the hidden tax of inflation).
I was up today. People need start trading their dollars for things with actual value. When cash turns into trash, you have to protect yourself. Commodities are where it’s at and will continue to be.
Comment by jim brown
Jun 18th, 2008 at 10:56 pm
That’s all fine and dandy about not regulating them. At the same time anyone who invests with them and then loses all their money, well they were greedy and put up the cash knowing it was high risk. The fact that the taxpayers of this country are bailing these people out is, in my opinion, a criminal act by our government.
Comment by Jeff
Jun 19th, 2008 at 12:16 am
I agree with Justin’s comment.
However, a commodity bubble is being created with oil leading the way. This is because you need oil to produce most anything that’s tangible.
This is a deliberate scheme to provide investment banks and hedgefinds etc. a way to recoup losses incurred in the sub-prime fiasco. Myth’s like Peak Oil and CO2 emissions being the primary driver for climate change are there to reinforce this scam.
This is being done at the expense of millions of “non-players” who need to fill up their gas tanks and feed their families.
We are about to enter the worst times this country has ever seen. If and when we come out of it, let’s hope that ethics as well as transparency in both business and government have taken a turn for the better.
That shouldn’t be too hard because any movement from where were at would have to an improvement.
Comment by Eric Wilhelmson
Jun 19th, 2008 at 1:16 pm
CC:
The last thing this country needs is more control by Uncle Sam. The pinheads (got that from Oreilly) in Congress know very little about business, the importance of profit
or what capitalism means. All they seem to be soing is promoting socialism while running for office.
The paradox is how they get reelected with less than a 20% approval rating, but that’s another story.
Comment by Eric Wilhelmson
Jun 19th, 2008 at 3:19 pm
CC:
This is off topic, but I just listened to your June 06 segment on ‘Office Secrets
and Lies’. A great follow-on to that would be a piece on politicians who run for
one office while holding another position. To me it is akin to stealing and is very
unethical. Obama, Clinton and McCain are sitting Senators who have spent too much
time on the campaign trail while getting paid to do their jobs.
Why do we as constituents not seem to care? Should we have a law that requires them to quit first? (I want that). Has anyone else talked about this?
Regards,
e
Comment by Rob
Jun 20th, 2008 at 11:02 am
It depends on what you mean by regulation. I’ve invested in companies with good underlying fundamentals and lost while I watch other companies with horrible fundamentals grow. In some sense I feel like Wall Street is a Pozzi scheme. So I turned to the housing market which definitely was a Pozzi scheme. I think there should be transparency. Information that only Real Estate agents have should be made public. It’s getting better with sites like Zillow.com and eappraisal.com, but I don’t know how reliable that data is.
Comment by doug marcus
Jun 22nd, 2008 at 1:25 am
i’m all for free markets but face it, a failed investment bank is nobody’s friend. all the fdic is asking is for a more organized way to wind down a failed investmernt bank rather than the scramble to save bear stearns. there is nothing in place so folks think any attempt to salvage them is a bailout for the bank - no that is not the case, it it to protect everybody else who did nothing to get severely impacted through no fault of our own. once the fed opened the window to the investment banks, its now my tax dollars @ work. i’m not asking them to shy away from the markets, they serve a very important of raising capital, but there is too much black box accounting. transparency w/ proper regulation, more or less compliance w/ existing laws, should be enough. that has been the problem w/ the wall street banks - no transparency, no regulation.
Comment by JK
Jun 22nd, 2008 at 3:14 pm
The party is over. Dow will suffer major blows as the summer passes becuase all of the ‘growth’, whether it was in the GDP or the dow, is just inflation. The Fed’s inflation numbers do not reflect the reality of the double digit inflation that is actually occurring, and everyone in the media nad the govenrment simply reports what the government is saying, thus misleading many people while the smart money is moving out. High oil prices are becuase of speculation or supply.demand problems? Hogwash. Oil, rice, grains, and other commodities are high because of inflation. Commodities are the first places that the common man sees inflation take place. Its all smoke and mirrors, folks. When the money supply starts to dry up because the Fed must raise interest rates, the Dow will collapse because its ‘growth’ is all priced in inflatiable dollars. The US hasn’t seen real growth in most industries in years, and now the party is over. The alternative? The Fed keeps interest rates low, and our creditors worldwide begin to dump them, causing a massive flood of dollars and mega-inflation. The Fed has no choice: its 1981 all over again, interest rates will rise and the dow will collapse at first, but recover in a few years based on sane and correct mathematics.