Tuesday, March 17, 2009

"Wake up, pal! If you're not inside, you're outside" Gordon Gekko

The above quote is from the movie "Wall Street", and to me, this quote is the most memorable line.

As someone who used to trade stocks for a living, I understand that trading follows little rhyme or reason, and the reason is because Wall Street is a game rigged by the insiders, which is why I feel Gordon Gekko's line is probably the truest line in the movie.

If you watched the recent interview between Jim Cramer and Jon Stewart you may recall Jon Stewart nailed Cramer for his unethical practices. First, Cramer tried to play like the innocent victim saying "I didn't know" until Stewart played the clip that showed Cramer admitting the practices he participated in when he managed a Hedge Fund. Cramer gave an interview a few years ago where he explained how to manipulate the stock market by first manipulating the futures market. The practice is a little bit complex, but suffice it to say, people with a lot of money can make the market move in any direction they want it to move, and this happens all the time.

In other words, Cramer knows the market is giant rigged game, but he gets up on his show and acts like some kind of talking monkey, and some people actually are dumb enough to believe he's their "friendly advisor."

All these Wall Street fat cats and their minions on CNBC know the stock market isn't really set up for the little guy to win. It's set up for the big players bleed the little guys dry, and their networks like CNBC act as their cheerleaders egging on the little guys. "Hey guys, just put your 401k with us. Over the long run you'll make money," is the standard message. Listen to any of the "advisors" for more than 5 minutes and those words will come out of their mouth.

But the reality is sometimes the market goes down 50%, and it takes 15 or 20 years just to reach the "break even" point again. Does that sound like a winning proposition for anyone who wants to retire at 55? Companies like CNBC do a disservice to the American people when they don't talk about these kinds of scenarios, and they never do, which is why I don't think anyone should listen to anything the people on CNBC say. Or better yet, you're probably doing the exact opposite of whatever they're recommending because they are almost always wrong.

People need to recognize that CNBC doesn't have We the People's interests, but rather they represent the Wall Street vipers. How many times have they let some lying douchebag CEO come on and lie his ass off about his company's prospects. Then, every time something devastating happens the commentators on CNBC act like--"Wow, we never saw that coming," which I find to be a tad disingenuous. How can people, who are so smart, who have more degrees and experience than most, always be so dumbfounded by these catastrophes.

Ultimately, what's wrong with the stock market goes back to what Gordon Gekko said, "Wake up, pal! If you're not inside, you're outside." Unless you know all the little intricacies of what's going on in the market, why trust that someone is going to do the right thing, when they have their own mortgages and their kids to send to college?

I really think the answer to all Wall Street's problems from the "little guy's perspective" is openness. That's the only way to find the people, who are committing fraud, and I personally believe there are still a ton of people out there committing fraud because they can get away with it, and I wouldn't trust the market until this issue of openness is addressed and sweeping changes are made.

Moreover, I believe these "stimulus packages" and "bailouts" are covering up the criminal behavior, which is another reason why I wouldn't trust the market.

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