HIGH FREQUENCY TRADING...UNINTENDED LONG TERM CONSEQUENCES.

Back in the day brokerage firms were owned by partners. If the firm lost money, the partners were personally liable. Commission charges to buy and sell stocks and bonds were extremely high but no one forced anyone to buy and sell stocks and pay those fees. When I was originally a broker at E.F. Hutton and Company and I wanted to get a quote on a stock, I walked up to the front of the room, stood in a long line, picked up the phone and was able to request one quote and only one. I then had to find my way back to the desk through the throngs of other brokers, I would give my customer the quote which really wasn't current anymore, I would write out the order on what was called a trade ticket, I would put it in a vacuum tube, it would travel a long distance and about an hour later I would know if we bought the stock or not. Times have changed.

Somewheres along the line the powers that be decided that fixed and high commission rates were not the way to grow a hearty participation in American Capitalism among the people. Rates were then lowered, then lowered, then lowered, and then lowered. It also came to pass that "money management for a fee" began its monumental growth. We now can trade billions of shares a day explained by the cult of the necessity for a liquid market. The liquidity is well out of balance with the actual need and has turned stocks into the semblance of a gambling casino with all the rules and regulations of such activity very much in place within our markets. Research is superficial and shoddy at best, but thinking, fortunately, keeps evolving through higher and higher levels.

About the same time,Donaldson, Lufkin and Jenrette found a way to pierce the wall of the New York Stock Exchange prohibition requiring all member firms to be private. The cry became "the road to growth requires public capital and we as partners can no longer foresee having enough capital to sustain significant growth". The members of the exchange tried to maintain their historical rules of private companies but the opportunity for making the existing partners wealthy men controlled the outcome. So the door was opened and privately owned firms were able to create great wealth for their owners by selling shares in their privately owned companies. There is no question that I personally benefited from this "time in history". The combination of much lower commissions and the loss of the future money management asset growth, made the traditional brokerage business a heck of lot less profitable, even with the ancillary interest income.

This is the story of what really led to the breakdown of the investment arena into a gambling casino.

ICAHN HOPE - SCHNEIDERMAN'S SOCIALISM???

For those of you that are interested in the stock market I'm sure you read about the advantages of investing in low cost market index funds.  As the expectations for hedge fund rate of returns continue to decline, more and more money will head toward the indexes.  Whether this is good or bad is entirely another story.

For lack of being able to put it in a better context, I draw your attention to the liberal Attorney General of New York State.  A "lightweight" according to Donald Trump, and probably a light weight in reality.

Recently the Attorney General of New York State made some kind of agreement that asset management firms had to change the way they solicit information from Wall Street analysts.  First of all there is some serious question of whether most information solicited from analysts, on a repetitive basis, adds over time to the performance of equity portfolios.  I venture to say that it doesn't.

But this is not the point.  Our economic system is predicated on the hope that one can rise from the ashes to the top of the heap.  When someone has money to invest, it is human nature to try to make the best possible investment they can.  If they give their money to a "professional" they expect that professional will seek and evaluate information to give the investor some hope of outperforming the returns from the indexes.  It is hope that creates excitement in life.

What the Attorney General of NY is trying to do is a typical liberal ploy of intimating to the public that they are somehow being taken advantage of by money managers seeking to increase the value  of their clients investments.  According to his liberal left wing policy, everyone should be on a a so called "level" playing field.  There can never be such a thing  as a "level" playing field in the world of equity investing, because there is no such thing.

The result of the Attorney Generals' actions will have absolutely no impact on the performance of portfolios. What it will do is take away hope, reduce incentive and move everyone to becoming more and more of a robot.

WHY DOES ISRAEL HAVE TO PAY FOR LAND?

In every one of the wars between Israel and its neighbors, Israel was the one attacked.

Various Arab or Palestinian people seem  to feel that they are entitled to request compensation for land they claim they previously had rights to.  Whether true or not, it is not nearly the point.

If we go back and trace the history of nearly every country, we would find that land had originally belonged to other people.  No one talks about every other country paying back historical owners of their land, only Israel is expected to act differently.

THOMAS PERKINS...THE RIGHT TO SPEAK YOUR MIND...

For twenty years I have read almost everything I can find on the history of Germany and its people.  There are no words to describe World War II and the Holocaust.  Words like horror, terror , Apocalypse, torture, cruelty, abomination and whatever you can think of cannot represent one grain of sand in the atrocity of the Nazi regime.

Albeit, that does not take away from a person's right to compare the holocaust to other human behaviors.  Whenever a minority group by race, religion, sex, economic standing, disability, education level or any such criteria are singled out for a form of punishment, that they are not given a right to vote down, they may be being abused.

The first thing the Nazis did was to confiscate the possessions of the Jews.  It was only later that the physical tortures and annihilation came into being.  

A person's wealth is their personal possession.  The Democratic party has singled out what has been called in the press the top "1 percent" as almost criminal because they have more money than others do.  The truth in the matter is that progressive tax rates don't increase the standard of living of people of less wealth.  What they do is form the basis of a democratic political  policy of promises rather than real results.

It was said long ago if we really want to improve our "best of class" country to an even better place we can.  We have to add more policies that increase the well being of the largest majority of people and stop the class warfare.

For the record, Federal Express and UPS do a more efficient job than the United States Postal Service.

WHAT IS INSIDE INFORMATION...WHERE DO YOU DRAW THE LINE?

A friend of mine went to a Doctor.  She was told she had a severe cancer.  The hospital had an experimental drug for this type of cancer.  She went home, looked up the drug, found out who made it and bought the stock.  Not only that so did her family, etc.  As it so happens the drug did not work as it was thought it would and the stock eventually collapsed.  The patient died.  Did she use inside information to purchase this stock?  Should her estate be sued for her use of this "inside" information?

PRESIDENT OBAMA - MINIMUM WAGE EQUALS POPULARITY IN POLLS...

The problem with President Obama is that he knows that his proposals on minimum wage are destructive to economic activity, not constructive.  The point being he proposes them anyhow because he is not interested in true economic improvement, yet only interested in political power which can come from giving people what they think they want, even if it will do them more harm than good.

President Obama should focus his energy into improving our educational system and providing more economic incentives to people of all ages who want to further their education so they can pursue higher level jobs.

Many young people have started by earning minimum wage and then worked hard to rise in their ranks and increase their income through success in their careers and seeking further education.  That is the way the world works.  If it isn't broken, why does he insist on fixing it?

SAC PORTFOLIO MANAGER - WHAT IS RESEARCH??

There are so many things I could write about but I don't.  Our infamous government can't get Snowden, so it goes after a young money manager who tried to make his clients money.

The subject of what represents "research"on behalf of investment management clients has not even begun to unfold.  

OUR UNDERACHIEVING STUDENTS IN AMERICA????

It is often reported that students in the United States underachieve on academic tests compared to a substantial proportion of the world.  This reporting hasn't sat quite right with me and I couldn't quite put my finger on why these headlines were misleading, if they were in fact statistically accurate.

Lets keep the record straight.  Let the same media report the following comparisons,  how do our mixed American nationalities compare to their home countries.

For example, lets compare our American Mexicans to Mexicans in Mexico.  Lets compare our American Germans to Germans in Germany. Lets compare American Russians to Russians in Russia.  When this is done, we will have a much more accurate picture of whether substantial portions of our media are either lazy, biased or accurate on whether in fact our children really do underachieve.

WHAT THE FITCH (STANDARD & POORS RATING AGENCY)?!? (ORIGINALLY PUBLISHED ON 11/17/11)

Yesterday, November 16th, within five minutes the Dow Jones Industrial Average dropped 200 points after a negative release by the FITCH company concerning the US banking system. Our markets have dropped sharply before based on the antiquated opinions of companies like Fitch, which are no more and probably less capable than anyone of the hundreds of investment firms that provide research on other matters.

You are not going to be able to believe this but I decided to take a look at who owns the FITCH rating service, let alone its record of prediction or the qualifications of its key personnel.

Guess what? This company that drove the market down, with its less than brilliant statements, is primarily owned by a man (are you ready for this) by the name of Marc Ladreit De Lacharriere. We have no idea of what his politics are or whether he even votes in the United States... he seems to be French. Yes, that's right a Frenchman controls one of the three rating services that were approved by the SEC in 1975. That's right, 1975. Something that was sanctioned in 1975 and doesn't seem to have been updated. The whole situation is so absurd that there has to be an immediate investigation of the qualifications, historical accuracy and potential hidden agendas of the people that run these companies. The three rating agencies, in my opinion, are of little value.

There is a better way. Its simply the following...everyone that sells bonds has to release information to bondholders exactly the same as information is released to shareholders. Any money management organization that gets paid to manage bonds for others must be held accountable to do its own research and form their own opinions about the quality of bonds that they buy or sell. If the meaning of this prior comment is not clear to you, at another time I will talk about it again.

The CEO of FITCH holds a BS degree from a poorly rated college. The President of FITCH has a marketing degree from a mid level college in another country. A top managing director at FITCH has a management administration degree from a University in France.

Globalization has distorted human nature. No one would ever dream of having foreigners take control of companies like Boeing, Raytheon, Lockheed Martin, General Dynamics. The rating companies fell off the radar.

OBAMACARE - MERIT YET TO BE WRITTEN...

Term one President Obama was elected along with a democratic Congress and Senate.  These three controlling components of the government quickly passed what is called "Obamacare".  They made use of their majority power, the Obamacare bill was several thousand pages long and I didn't read about or know anyone who had read let alone analyzed the bill.

The Democratic control legally allowed them to pass this bill.

In the midterm election the Republicans won back control of the House of Representatives along with that control, came certain rights and powers, a similar situation to President Obama's first term

If the Democrats during term one hadn't been so down right nasty and paid little heed to Republican thinking we would not be in the political squabble that we face right this minute.

Because of Republican ineptitude to articulate what really happened ,much of the blame for the stalemate is being placed incorrectly.

P.S. This blog has nothing to do with whether Obamacare is good or bad.

EGYPT...ANOTHER OBAMA DISASTER?? (ORIGINALLY POSTED 9/2012)

Egypt, going the wrong way...Saudi Arabia, still oppressive...Libya, chaotic...Syria, an abomination...North Korea, out of their minds..Iran, apocalyptic.   Woe to the world if atomic bombs proliferate, as their on the road to, in the Middle East.

You have to ask yourself the following question.   Is it just coincidence that the last time a United States Ambassador was killed was under the Presidency of Jimmy Carter?  Now we have lost an Ambassador under another appeasement oriented President.

During World War II it was next to impossible to bring the American electorate into an early tough stance against German expansionism.  It took the attack on Pearl Harbor to give President Roosevelt the political clout to come to the aid of Great Britain and Europe.

The issue is not so much the human suffering of World War II. The issue is that it would have been much simpler to have stopped it in its tracks more proactively with less human loss and suffering.

Wouldn't it have been better if President Obama instead of just saying "America does not denigrate other people's religions" then added that in America there is freedom of speech and we will not tolerate terror to suppress this freedom.  

Therefore we march down the same path as we did in World War II, hoping that appeasement will drench the acts of terrorism.

One is always hopeful that there is an easy path to controlling evil, unfortunately all you have to do is look around and follow the story.

WHERE IS THE OUTRAGE???

From a recent headline from a popular website:

"Arabs Attack American Jew in Venice".

In addition to the story, there was a large picture with a sign in bright red being carried by fully garbed Muslim looking people saying "GOD BLESS HITLER".

WHERE WAS THE OUTRAGE?  There was none.

WHERE IS THE OUTRAGE???

From the Chicago Tribune today:

 "Eight Wounded in Shootings across Chicago Overnight Including Two Teenagers".  

WHERE IS THE OUTRAGE?  There is none.

THE REAL RACISTS!!!

Please think what you want about the following comments.  I would appreciate it if some of you would candidly tell me if the following comments are completely wrong.

We now face a group of people calling for boycotting, marching, protesting, not accepting the rules of a jury trial, etc., etc.

It takes absolutely no courage to attack Paula Deen and Zimmerman, whether they are guilty of transgressions or not, neither of these people are likely to harm the agitators or their families.

Let's see these great protectors of the  people go into Chicago and Detroit and attack the drug and gun culture that is resulting in so many deaths.  Let's see these brave agitators go where the big problems are and face the drug dealers and the thousands of guns and criminals.

They try to make themselves look like heros, but they are really politicians of the worst type; using the race card to sustain a following.

WHERE IS THE OUTRAGE??? CHICAGOLAND..

Quoted from today's Chicago Tribune;

7 shot in attacks on South, West, Southwest sides

WHERE IS THE OUTRAGE?  

ZIMMERMAN TRIAL...THERE IS NO WINNER

Why is "everybody" so interested in the Zimmerman trial?  I think I have heard about fifty explanations, some of which make sense and none of which are vital.

Trayvon Martin being dead is an abomination.  Pulling guns out in a fistfight, let along firing the gun is under most circumstances beyond the boundaries of moral and ethical law in this type of situation.

Unfortunately the Nation's obsession with the Martin-Zimmerman catastrophe totally obliterates the much more pressing issues of death by gun in cities like Chicago and Detroit.

There are hundreds of young black people being murdered in Chicago, mostly black upon black crime. Many innocent lives have been lost there also.  The sensationalized media should begin to put the same amount of time into covering these senseless killings.

Yet we as a Nation are obsessed with this one trial and the legality of murdering a young black teenager, who was unarmed and had a right to be in that neighborhood that night in Sanford, Florida.

There is no winner in the Zimmerman trial.  Trayvon is dead.  A young life lost.  George Zimmerman will never be a hero.  If he succeeds to be found not guilty it will only be due to the fact the prosecution was not able to provide an eye witness to describe what we all know occurred that night, Zimmerman shot and killed Trayvon.

The only winners here are the greedy media and cable news shows that thrive on sensationalizing senseless crimes for their own benefit.

PAULA DEEN - "THE TAR AND FEATHERING"

The older brother bashes the younger sibling.  The gigantic father beats the older boy to a pulp. The older boy goes to a hospital, never recovers.  Obviously the father's reaction did a lot more harm than good.

Lincoln believed that slaves should be sent to Central America.  He believed they shouldn't have a right to vote and certainly not marry with whites.  Thomas Jefferson was in favor in sending slaves out of the country and it only gets worse from here, since Emancipation didn't free many slaves when it was issued.

Today Lincoln is revered as he should be despite of his mistakes.

The "tar and feathering" of PAULA DEEN seems to be alot worse than her use of a word  many years ago, as despicable as it is.  The cowardly behavior of so many corporations will breed more resentment than it will breed enlightenment.

If Paula Deen is truly a bigot and intent on harming Negroes through word or deed, than she is not worthy of our support.  If like Lincoln, she lived through a period of her life where certain matters were not quite clear, then she is worthy of redemption.

There's an old cliche that only bullies jump on a man that is down on the ground.

P.S. How many times in recent history have famous black people bashed white people with no repercussions? What's going on??

HORRORS DON'T END...(ORIGINALLY POSTED 3/15/12)

Nothing can compare to the horrors of World War II. The Syrian people are being slaughtered by another mini "Madman". Watching the United Nations and the major powers be completely impotent, (no matter what their rational) is best described by the cliche "A Plague on both your Houses". In the 21st century, there is no excuse, none whatsoever.

SNOWDEN - THE ALL AMERICAN COWARD...

The Japanese attacked and destroyed most of our Naval Fleet at Pearl Harbor, Hawaii in 1941.  Shortly thereafter our Nation declared war on Japan and Germany.  The majority of our citizens did not want to enter into another European and Pacific War.

In 1942/43 our code breakers were able to interpret Japanese military messages.  The Japanese were planning an attack on Midway, approximately halfway between Hawaii and Japan.  The Japanese did not know we had broken their code.  If they had taken Midway, their control over the entire Pacific ocean would have been catastrophic and had a good chance of altering the outcome of the war.

The Japanese sent four aircraft carriers under the umbrella of a large supporting fleet.

Since we had broken their codes, and they didn't know it, we were able to send our last three aircraft carriers to lie in wait for the impending attack.  In spite of surprising the huge Japanese fleet, we almost lost the battle.  Our pilots were young, inexperienced and the Japanese defenses were formidable.  At the end we destroyed four Japanese aircraft carriers, an incredible feat totally due to our code breakers and valiant fighter and bomber pilots.

BUT THIS IS THE REAL STORY.  IMAGINE IF SOMEONE ON THE CODE BREAKING TEAM OR ON OUR NAVAL SHIPS DECIDED THAT THEY THOUGHT TOO MANY JAPANESE WERE GOING TO DIE BY SURPRISE ATTACK AND DECIDED TO SEEK OUT SOMEONE AT THE JAPANESE EMBASSY TO INFORM THEM OF OUR PLANS.

It's obvious we would have been dealing with a traitor.  It should also be obvious that we had to prevent this from happening again.  So our government started to monitor mail, phone calls and travel plans of those people who might be in a position to repeat treason.  Today many people would actually proclaim that privacy rights trump protection rights.

I can't think of greater gibberish, probably coming from people who have never served in the armed forces.  God Bless America.

SNOWDEN IS A CHUMP...

There are all different kinds of mental illnesses.  They have all kinds of names, from schizophrenia,  borderline personality, sociopath, obsessive compulsive, etc.

The person who assassinated Abraham Lincoln believed in his cause.  The same for the assasinator of Kennedy, the attacker of Reagan and the numerous other attempts on other Presidents lives.

Snowden is just another form of terrorist, hiding behind his narcissistic personality and grandiose inflated ego who is probably looking to write a book, make a movie and be crowned Emperor.

If more and more people would decide that the rule of law was not to be followed whenever they believed that their illegal views took precedence over lawful procedures there would be no where to hide, the anarchy would be so pervasive.

The argument is made that if it wasn't for the brave, such as Rosa Parks, Nelson Mandela, Women Suffragettes, and Gorbachev, tyranny would prevail and necessary changes would never have taken place. But none of these people committed treason!

Many of these dilemmas could be included under the banner "the clash of absolutes".

Snowden set himself up at as the ultimate decider of the what's in the best interest of national security.  He did this against the law and I'm sure with absolutely no knowledge of the catastrophic risks the nation is facing from world wide terrorism.

It seems pretty safe to conclude that the elected government believes that extraordinary risks require extraordinary actions.  There is no question that an enormous number of problems will develop from the information gathering that the Federal Government has now undertaken.

Each of us should carefully weigh realistically which is the greater risk to our freedoms.  Privacy protection or terrorism protection.