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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerWith all the talk about mortgage fraud, Freddie Mac, Samuel Israel, and now the mother of all scandals, Bernard Madoff, it's easy to conclude that we are in the midst of a financial disaster.
But on his White Collar Fraud blog, ex-con Sam E. Antar writes that the wave of fraud is really an illusion. In effect, fraud is being exposed right now because of the market collapse. Fraudulent investment schemes are a lot easier to run when a bull market is there to bail things out. As Warren Buffett said, you get to see who's swimming naked when the tide goes out. The down market has put an end to a lot of scams that might have been able to linger on unexposed if the economy were better.
But the sad thing is that these massive financial crimes are only being exposed now because they are collapsing, and there's essentially nothing left for investors to recoup. Antar writes that "We simply do not have enough adequate effective measures in place, to prevent most white collar crimes .... Worse yet, during a strong economy, our regulators and policy makers often ignore or pay little attention to crime prevention resources and regulations that can actually reduce the amount of white collar crime. Often white collar law enforcement resources are reduced and regulations are watered down, in the name of efficiency and regulatory relief, to promote economic growth."
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Reader Comments (Page 1 of 1)
12-14-2008 @ 12:42PM
Iridium said...
When have we not been in the midst of a white collar crime spree?
Stealing money by Wall Street high ups has been happening ever since the market was created. The Great Depression was caused by white collar crime, stealing money and hyping stocks.
I would say that the books of almost every single major corporation are fraudulent. By many cases by millions or in some cases billions of dollars.
The biggest scam of them all is the stock market itself. It is 100% manipulated to take money from small investors and redistribute it to very wealthy people.
There is no way Bernard Madoff is the only major scheme in the market right now. We really need to look into government fraud as well. Welfare, Medicare, HUD, and Medicaid are so rife with fraud that the programs need to be shut down.
Everywhere I look I see massive fraud and stock manipulation. There is no way that many corporations could stay in business unless the use fraudulent tactics. The problem is that this has been going on for such a long time that fraud seems to be the normal way of conducting business.
12-14-2008 @ 3:26PM
BHarrison said...
This article fairly well summarizes the basic problems of there not being any fianacial INTEGRITY in our corporations or in our stock markets . . . and it has always been so, to varying degrees.
The problem this time is that the enormity of the massive frauds has hit ALL segments of our economy, and all of the reserves have been drained via FRAUD.
Our government, expecially Congress is so corrupt and at the beck and call of the special interests groups, and our regulatory agencies have not been set up to deal effectively with "normal fraud; and they certainly are not equiped and manned to handle this massive fraud.
The only way out of this is to establish "oversight and strong basic regualtions" AND to being to indict and prooecute everyone who is guilty of fraud, starting from the top down.
We either work to stamp out corruption and FRAUD or we become enslaved to it. The first step should be to "clean house" in Congress. Every Cogressman should be held PERSONALLY ACCOUNTABLE for what they have and have not done, irrespective of party affiliation.
If "the American peole" are not willing and able to do that, then very little will change. I don't know abut others, but I will NOT invest in a corrupt, maniplated stock market again . . . it is a FOOL'S Market.