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alstry (35.49)

Has America Become Enron????

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September 08, 2008 – Comments (4)

Integrity in our financial markets is what distinguished America from the rest of the world.

Now we are seeing corporate heads of our most important companies make outright misleading and/or misrepresentations and nothing is done about it.

Think about this little fact for one second, one month ago Fannie and Freddie were representing they were well capitalized and now they are essentially bankrupty and in conservatership. 

How many bank heads have told us the same and raised money a few hours or few days later diluting existing shareholders.

In the past, the FBI and SEC would be knocking on these guys doors that afternoon.  Today....nothing.

If you can't trust the financials or the statements of the company's leaders....what basis can any investment decision be made??????

Let's hope this nonsense comes to an end before all Americans are holding shares in just a bunch of Enrons.

4 Comments – Post Your Own

#1) On September 08, 2008 at 11:53 AM, MakeItSeven (32.83) wrote:

This statement, in particular, made me sick.  He should collect a jail term instead.  He knew back in July where the company was heading:

Freddie's Richard Syron could get a package valued at $14.1 million after a clause was added to his employment contract in mid-July

The SEC has been made dysfunctional so we end up with this.  It beats me why there are people who still want to make govenment agencies more ineffective and give these CEOs free reign as if they would be driven by the country's or even the company's interest and not their own.   Considering all the money these CEOs companies collect in the past few years do they really care if their ex-companies go bankrupt ?

People who advocate free market and smaller role of the government make one mistake.   They assume that companies are integral entities which make decisions to benefit themselves in the long term.   That's not true.   Chuck Prince is not in the minority when he said: "As long as the music is playing, you’ve got to get up and dance,”.  Did that help Citigroup in long term or just himself in short term ?   Definitely he knew the music would end.

Greed is just another side of ambition.  While ambition might drive innovation, greed destroys it.  The only entity which has the capability to prevent excessive greed is the government and greedy people wants to destroy it too.  The current government, other than bailing out the CEOs, might as well be non-existent.

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#2) On September 08, 2008 at 12:27 PM, jesusfreakinco (29.58) wrote:

And people complain about the cost of Sarbanes-Oxley which apparently has NOT accomplished its objectives of full and fair disclosure with penalties for not doing so.  Is America any less corrupt than Russia?  Moral hazard... where are you?

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#3) On September 08, 2008 at 12:56 PM, jesusfreakinco (29.58) wrote:

Jim Rogers - The Fed will eventually fail.

Another great insight from Jimbo...

 

http://www.moneymorning.com/2008/09/06/jim-rogers-book/

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#4) On September 08, 2008 at 2:52 PM, alstry (35.49) wrote:

You simply can't go from a company that is well capitalized to bankrupt in just two weeks.  The problem now is that trust is breaking down in the system.

Look what happened to United Airlines when a rumor started it was going bankrupt.  The fact that a rumor of bankruptcy could gain traction is evidence of the lack of trust of company financials.

If the government can destroy equity of the largest company in the world and pay off a select few....it would not be too much of a stretch before your 401K can be destroyed to pay off a few.

We do live in amazing times.

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