HOME
Message Board
CURRENT COLUMNS
- Editor's Corner
- Blogfest 2005
- Commentary
- Commentary Too
- Down The Middle
- Faulking Around
- Global Warning
- This guy walks into a bar...
- Investing 101
- Faulking Opinions
- Off The Rail
- Words
ARCHIVES
LINKS
CONTACT US
 | |||
Investing 101 - Jan 17, 2006 - Printable Version
- The Circle of Greed:
The Only Bull in this Stock Market is a Cash Cow
by Mark Faulk
Hedge funds and brokerage firms. It's a match made in Wall Street Heaven. Brokerage firms make their money not by representing their clients, the average investor. They make their money by trading stock. It's that simple. And no one trades more stock that the hedge funds. Between the two of them, they have created some of the wealthiest individuals in America, lining their own pockets with outrageous salaries, unbelievable commissions, and massive bonuses that most Americans can only dream about. And they do it in a stock market where the average investor is still struggling to recoup even a fraction of the losses sustained in the market meltdown of 2000. They do it by selling stock. It doesn't even matter whether that stock is real or imagined, just as long as the shares keep flowing. It doesn't matter whether the shares are delivered or not, just as long as the "customer" keeps paying the commissions for the shares that flow in a neverending stream from one hand to another. Counterfeit or real, as long as the brokerage firms collect their fees, they'll continue to buy and sell, sell and buy.
In a New York Times article last Thursday, they announced the yearly bonuses doled out by Wall Street by opening with the sentence, "Ferrari dealers, get ready. Wall Street bonuses are in and they are big." It wasn't an exaggeration. According the Times article, "Those bonuses were driven by record profits at many of Wall Street's major investment banks, including Goldman Sachs, Bear Stearns and Lehman Brothers."
Record profits on Wall Street. So what drove those profits? Did Wall Street deliver record returns to their clients to go along with those record profits? Isn't that the job of the brokerage firms, to make money for the millions upon millions of investors that they represent? So it stands to reason that investors across America shared in the banner year that lined the pockets of Wall Street, that gave literally thousands of Wall Street executives bonuses of well over a million dollars each.
Not so fast. According to the same article, "the bulk of Wall Street's profits continue to come from trading," and Alan Johnson, managing director of compensation consulting firm Johnson Associates, put it more bluntly, "The trading business, which drives Wall Street - it's not investment banking - continued to be extremely strong, even though interest rates went the wrong way."
So there you have it. The brokers get rich, not just rich but obscenely rich, by trading stock, and the hedge funds generate nearly half of all trades in the stock market, and an estimated 30% of total stock commissions. Real or counterfeit, every trade is money in the bank for both the brokers and the hedge funds. It's criminal, and it's a financial scandal so massive in scope that it's unimaginable that the major media still isn't reporting it, and in fact appear to have duct tape across their collective mouths when it comes to speaking out for the American investor.
Why is that? What earthly reason could there be for ignoring, no wait, make that aiding and abetting the perpetrators who are robbing America blind? As I was reading the Times article about Wall Street executives, bankers, and traders who had "already budgeted or spent their bonuses on multimillion-dollar estates, rare art, luxury cars and fractional shares in private jets," another Faulking Truth writer, Mike Bohling, sent me an unrelated article about media bias, called "Liberal Media Bias - Dismantling the Myth." At first glance, it had nothing to do with the stock market scandal, because, as I've said, this issue is not about liberal or conservative, it's an issue that crosses party lines and political demographics. But then, I read something in his article that triggered another of those "defining moments" that I speak about so often.
Why isn't the media covering this issue? As always, it always comes back to the Circle of Greed, to power, to control, not just the control of our ideology or our politics, but control of something far more important to those at "The Top" - control of the flow of money, specifically the flow of money from the Middle Class to the Ultra Wealthy.
Let's begin with my favorite media target.....Dateline, who spent thousands of hours and, I'm guessing, tons of money putting together an expose' on Stockgate, only to sit on it for a year and a half, and then, when they finally did air it, turning it into the biggest non-event in the history of uh....."investigative journalism." It was as if some unseen hand from above came down and slapped it into oblivion. At the time, much was made of the fact that NBC (and CNBC, MSNBC, Bravo, USA, and the sci-fi channel as well) are owned be General Electric, but that still didn't answer the question of why they seemed to have a vested interest in not just killing the Dateline story on NBC, but why they also seemed to almost take delight in hiring media hacks like Jim Cramer to promote their short selling agenda, and who blatantly attack advocates of stock market reform such as Overstock's Patrick Byrne and Dave Patch of www.investigatethesec.com.
In the case of NBC and CNBC, the "unseen hand from above" that guides the policies that perpetuate this massive fraud against America isn't the hand of God, or even the hand of GE. In this case, one doesn't have to look any further than NBC's Board of Directors to see who benefits from protecting the hedge funds and burying the evidence of massive stock counterfeiting. The list is a who's who of Wall Street and banking interests: J.P. Morgan & Co, Chase Manhattan, Citicorp, Morgan Guaranty Trust all have "representatives" sitting on NBC's Board of Directors. Oh, and there's one other entity who sits on the NBC Board of Directors, and helps to set the policy for both NBC and CNBC.....The New York Stock Exchange.
Enough said.
Let's just make this simple. I'll list every major media giant, and then mention a few companies who have "their people" sitting on the board of directors of those media giants. It won't take long to understand why the Corporate Media is allowing the rich to continue to rob the poor by the immoral and illegal manipulation of our financial systems.
Ready? here we go:
General Electric/NBC - Chase Manhattan, J.P. Morgan & Co, Citicorp, Morgan Guaranty Trust, State Street Bank and Trust, Banco Nacional de Mexico, and The New York Stock Exchange.
Viacom/CBS - Chase Manhattan, Credit Suisse First Boston Corp, Morgan Chase & Co., Bear Sterns Companies, Polaris Venture Capital, and.....(once again) the New York Stock Exchange.
AOL/Time Warner - Citigroup, Morgan Stanley Dean Witter, Forstmann Little & Co. (venture capital and buyout firm), Kleiner Perkins Caufield & Byers (venture capital firm), ZG Ventures, (venture capital and investment firm), and (who else?).....the New York Stock Exchange.
News Corp (Fox) - Rothchild Investments, Allen & Company (investment banking firm), and (say it with me this time).....the New York Stock Exchange.
Disney/ABC - City National Bank, LM Institutional Fund Advisors I, and Trefoil Investors (investment capital firm).
So how about the print media? Surely our major newspapers are interested in the truth, in exposing what many believe could turn out to be the largest financial scandal in our country's history. Again, it's been mostly the collective sound of crickets chirping when it comes to newspaper coverage of stock market fraud. After all, when Wall Street is handing out $38 million yearly bonuses to the CEO of Goldman Sachs, nearly $15 to Lehman Brothers' CEO, and $11.5 million (for half a year's work) to the new CEO of Morgan Stanley, who wants to rock the hedge fund boat that generated those beautifully obscene paychecks?
Certainly not these board of director members (see if you recognize any of them):
New York Times Co. - Lehman Brothers, Chase Manhattan, State Street Research and Management (investment management firm), and Warburg, Pincus & Co. (investment banking).
Gannett (99 daily newspapers including USA Today and 21 television stations) - Goldman Sachs, Prudential Mutual Funds, Capital Investment of Hawaii, Carlisle Group (investment and financial software), Millennium Bank, and Pacific Century Financial Corp.
Knight-Ridder (32 daily newspaper, including the The Philadelphia Inquirer, The Miami Herald, and the San Jose Mercury News) - Goldman Sachs, Providian Financial, BankAmerica, State Street Bank and Trust, and Vanguard Group (investment management).
Dow Jones/Wall Street Journal - American Express, Bank of East Asia, Bankers Trust Company, and Lazard Freres (the French company that bills itself as "the world's preeminent advisory investment bank").
Washington Post - J.P. Morgan, Moody's (investment banking and finance), and Dun & Bradstreet.
The Tribune (Chicago & LA Times) - Wells Fargo, First Third Bancorp, and Washington Mutual (financial services).
So there you have it. The same media giants who we should be able to trust to give us fair and unbiased coverage of one of the most important issues facing our country today, controlled by the same banking and financial institutions who are lining their pockets with the spoils of a stock market spinning out of control.
And this is only a small part of The Circle of Greed. The web of corruption and collusion extends far beyond the cozy arrangements between the brokerage firms, investment banking industry, hedge funds, and the media shills who protect them. It involves our government officials and even our beloved Congress.
But that's a story for another day. Goodnight, America, and when you wake up tomorrow, don't forget to call your brokers and demand that they actually deliver your stock certificates to you, after all, they can afford it. They're millionaires.
And that's the Faulking Truth.
Mark Faulk is the Editor of The Faulking Truth, and the author of the upcoming book entitled "The Naked Truth," due out in June, 2006. For more information on the book and on the stock market scandal, go to http://www.faulkingtruth.com , and to pre-order your copy, go to http://www.theownersgroupinc.com/cart/
Add your name to our mailing list on our homepage, and we'll update you on developments in the Stockgate scandal.
Voice your opinion on our message board (you don't have to sign up to post).