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
 | |||
Faulking Opinions - Jan 18, 2006 - Printable Version
- My Mother's (deceased) investment Credo
by Henry Wade Harris
My mother (1929-1999) said her mom jokingly blamed the great crash of 29 on her. My mom was born 16 OCT 29. In her life she bought a good many stocks. All were ordered Certificated upon placing the orders. She said stocks, like real estate had three golden rules. As we know the three rules of real estate are Location, Location, Location. The rules for stocks and bonds were Certification, Certification, & Certification. In her formative years she heard & read the evidence on why the crash occurred and how to prevent the recurrence of the disaster. She learned the government was not to be trusted in matters of money. Her father was a conductor for the railroad and died in a crash died when she was two. Needless to say, her mother struggled immensely to feed her and her brother and sister. Several Irish Catholic families of similar challenges banded together under the same roof to survive. Their patriarchs died in the war. I find this situation compellingly similar to the era we find ourselves in now.
We must band together to achieve unanimity of action. The exchanges are bent on the de-materialization of equity assets. That alone will make an equitable resolution to the past, current, and future manipulations impossible. Al possible legal efforts must be nade to prevent this from occurring. The move to T+1 or T+0 is the last step before dematerialization is reality.
I can not express how urgent the mandatory call for Certification truly is. The Brokers can hold the certs as can banks and loan money accordingly. Regular audits by the customer, IRS, and/or whatever entity replaces the SEC. Furthermore, The fact that the exchanges are universally becoming for profit public entities necessitates the disbanding of the SRO concept. No public company has the ability to self regulate other than as an audit & control function to keep itself in compliance of the laws governing their existence. The police function must be a totally independent and properly staffed & properly compensated group (entity).
The FED should not be involved. They have been abusing their influence to regulate the markets for years under Chairman Greenspan's tenure. He could not accurately forecast the effects of gains or losses en-mass so he put a ceiling on the market via interest rate policy. Needless to say, his assets are not subject to a blind trust as per other government officials. Thus the reason for his total investment in the bond market. No doubt certificated during the self created greatest bond bull market in history. I propose the members of the FED be forced to place their assets in a blind trust as part of the sweeping reform I suggest.
Finally, there must be a constitutionality test of the "grandfathering" provision of Regulation SHO, if not the repeal of the entire Regulation itself. The same fraudulent scams that caused the crises of the 1920's have caused or at least exascerbated the crash of 2000. The laws written in the 30's were well written. Strict enforcement is all that is necessary, along with the prompt certificated settlement of stock & bond trades.
Thank you for taking the time to read my suggestions. If only one notion survives let it be certification. That alone will separate the chaff from the cream. Until then the cream continues to waste away.
Voice your opinion on our message board (you don't have to sign up to post).