Who created the last market bubble and how? GOLDMAN SACHS.
I was perusing Barnes and Noble this past weekend (Sunday) and noticed that Rolling Stone Magazine had an article on Goldman Sachs. The article was dubbed "The Great American Bubble Machine" and seems to expose Goldman Sachs as the cause not only for the current financial crisis, but for financial bubbles dating back to the 1930's. More importantly, It gives a prime example of why investors should manage their own money and government should stay out of the economy.
The article is a must read for everyone, especially if you have an account with Goldman or any of the other big brokerage houses. Without getting into the entire details thus depriving you of a great read; in the article, Matt Taibbi unveils how Goldman Sachs was responsible for the dot com bubble, mortgage bubble, and commodities bubble. And, with Goldman looking to pay out roughly $20 billion in annual bonuses to their people this year alone, it goes to show just how much clout these big banks really have. So, if you haven’t read the article, pick it up at your local newsstand.
My questions are…
Is it fair that any banks were bailed out in the first place?
Is it fair that these banks that prey on investors (as you’ll read) give their people bonuses?
How much of government is run by ex-Wall Street types?
The bottom line is...
This article is just one media story in a long series of stories illustrating why the majority of investors should learn to do it on their own. Wall Street has done a great job of brainwashing people over the last 50 years into believe they had all the best ideas, solutions, and wealth creating vehicles. Now, for years to come, I believe that more and more people will start to do it themselves. I mean, people have been building their own houses and doing their own remolding for years thanks to stores like Home Depot. Why not take the same time and become a better investor?
If you're visiting GuruFocus.com I sincerely hope you are managing your own money even if you're using this services ideas and information to help make those decisions. And while making your own decisions will not guarantee that you make money in the market, with over 85% of money managers never beating the collective market averages, you have to be able to match those odds, right? I'm guessing that if you're using GuruFocus (and any other site like it) you're ahead of most. And, using any one of the strategies on this site can help you outperform the market and those 85% of helpers.
Another thing…
This article is just one of many that show that we do not live in a free market capitalistic society and that our government acts on the behalf of major corporations because these companies have situated themselves inside politics. You probably already knew that.
What do I mean?
Well, I am a big fan of Austrian Economic Theory. I think that laissez-faire political action toward economics should be the practice in our society. Let the free market decide what is what without the government being involved. Sure, we need standards of practice to support certain things, but we have seen how faulty regulation can actually be - Fannie and Freddie being prime examples.
In the article on Goldman, Taibbi explains how many of the top level political offices are held by ex-Goldman employees. In fact this is ludicrous to me. Should former top employees at McDonalds or Merck be allowed to go to the FDA? I would hallucinate there are some inside that organization. The article also explains how, contrary to popular brainwashing, the Democrats (not Republicans) have been the one's responsible for the bubble markets because of their association with Goldman, especially since the 90's.
Unfortunately, all the data point to our country heading toward more socialization (a.k.a. more government power and less freedom) and less free market enterprise - banking and healthcare to lead the way. To do this we are increasing our debt by trillions. I remember when a trillion dollars was a huge deal for the national debt. Well now we're approaching 15 times that.
Austrian Theory has been used to explain why the Great Depression really happened and how it could have been avoided. It also was used recently to predict the housing collapse, by Peter Schiff and others. And, it can be used to get us out of the current mess we are moving towards. Of course the plot of government is always to get more power, just like the plot for any business is to make more money. These two seem to be moving at odds, while in our society they are actually moving in step. At least for the biggest companies that are truly "too big to fail."
This may have been a very round a bout way to say the following:
1. No one cares more about your money than you do, so start investing on your own, if you haven't done so already. GuruFocus.com can help.
2. Government intervention is bad for the economy and has been for centuries. Our country looks to be heading for high inflation soon - be prepared.
3. I believe that Warren Buffett is right in NOT PAYING ATTENTION to most economic indicators and focusing strictly on the businesses fundamentals. This is why there will always be good bargains to be found in the United States stock market.
I was perusing Barnes and Noble this past weekend (Sunday) and noticed that Rolling Stone Magazine had an article on Goldman Sachs. The article was dubbed "The Great American Bubble Machine" and seems to expose Goldman Sachs as the cause not only for the current financial crisis, but for financial bubbles dating back to the 1930's. More importantly, It gives a prime example of why investors should manage their own money and government should stay out of the economy.
The article is a must read for everyone, especially if you have an account with Goldman or any of the other big brokerage houses. Without getting into the entire details thus depriving you of a great read; in the article, Matt Taibbi unveils how Goldman Sachs was responsible for the dot com bubble, mortgage bubble, and commodities bubble. And, with Goldman looking to pay out roughly $20 billion in annual bonuses to their people this year alone, it goes to show just how much clout these big banks really have. So, if you haven’t read the article, pick it up at your local newsstand.
My questions are…
Is it fair that any banks were bailed out in the first place?
Is it fair that these banks that prey on investors (as you’ll read) give their people bonuses?
How much of government is run by ex-Wall Street types?
The bottom line is...
This article is just one media story in a long series of stories illustrating why the majority of investors should learn to do it on their own. Wall Street has done a great job of brainwashing people over the last 50 years into believe they had all the best ideas, solutions, and wealth creating vehicles. Now, for years to come, I believe that more and more people will start to do it themselves. I mean, people have been building their own houses and doing their own remolding for years thanks to stores like Home Depot. Why not take the same time and become a better investor?
If you're visiting GuruFocus.com I sincerely hope you are managing your own money even if you're using this services ideas and information to help make those decisions. And while making your own decisions will not guarantee that you make money in the market, with over 85% of money managers never beating the collective market averages, you have to be able to match those odds, right? I'm guessing that if you're using GuruFocus (and any other site like it) you're ahead of most. And, using any one of the strategies on this site can help you outperform the market and those 85% of helpers.
Another thing…
This article is just one of many that show that we do not live in a free market capitalistic society and that our government acts on the behalf of major corporations because these companies have situated themselves inside politics. You probably already knew that.
What do I mean?
Well, I am a big fan of Austrian Economic Theory. I think that laissez-faire political action toward economics should be the practice in our society. Let the free market decide what is what without the government being involved. Sure, we need standards of practice to support certain things, but we have seen how faulty regulation can actually be - Fannie and Freddie being prime examples.
In the article on Goldman, Taibbi explains how many of the top level political offices are held by ex-Goldman employees. In fact this is ludicrous to me. Should former top employees at McDonalds or Merck be allowed to go to the FDA? I would hallucinate there are some inside that organization. The article also explains how, contrary to popular brainwashing, the Democrats (not Republicans) have been the one's responsible for the bubble markets because of their association with Goldman, especially since the 90's.
Unfortunately, all the data point to our country heading toward more socialization (a.k.a. more government power and less freedom) and less free market enterprise - banking and healthcare to lead the way. To do this we are increasing our debt by trillions. I remember when a trillion dollars was a huge deal for the national debt. Well now we're approaching 15 times that.
Austrian Theory has been used to explain why the Great Depression really happened and how it could have been avoided. It also was used recently to predict the housing collapse, by Peter Schiff and others. And, it can be used to get us out of the current mess we are moving towards. Of course the plot of government is always to get more power, just like the plot for any business is to make more money. These two seem to be moving at odds, while in our society they are actually moving in step. At least for the biggest companies that are truly "too big to fail."
This may have been a very round a bout way to say the following:
1. No one cares more about your money than you do, so start investing on your own, if you haven't done so already. GuruFocus.com can help.
2. Government intervention is bad for the economy and has been for centuries. Our country looks to be heading for high inflation soon - be prepared.
3. I believe that Warren Buffett is right in NOT PAYING ATTENTION to most economic indicators and focusing strictly on the businesses fundamentals. This is why there will always be good bargains to be found in the United States stock market.
