Andrew Sorkin, a New York Times reporter, described what he felt investors should be doing who have money tied up in bank stocks and the like. “Start throwing tomatoes.” I mean after all, that is what you do for a bad performance now isn’t’ it? I must say I have to agree with him. Who among us wasn’t surprised to hear earnings reports last week from the banks citing billions and billion of dollars in profits? Yeah, you got that right.
In what has become the norm rather than the exception, creative accounting 501, has us learning better and better ways of covering up things like losses, more losses and absolutely being broke losses from those who apparently should know better; you and I the investors. Ideas such as creating a new bank and then transferring your negatives to that bank or suddenly finding yourself solvent because you value nothing as a asset rather that say the rest of the English speaking world who still value nothing as “ 0”. And if the pit of your stomach was truncated enough over all of this, you learn as you well expected to, that it is all perfectly legal. You can only come up with one conclusion: you don’t beat a man at his own game; at least not a smart one and trust me, these corporations are smart ones.
Sixty minutes last weekend had a great piece on the hidden fees of 401 k’s. The fees your retirement account is being charged. They range from small maintenance fees to larger fees for monitoring or for just having an account with whomever. Do you know all the fees you are paying and why? Few do. And to add insult to injury you will soon start hearing that these accounts were never meant to be savings accounts for retirement. If you thought that this was the money you were going to use for retirement, you should have invested in something more secure! Talk about being on top of the Ferris wheel and watching as the whole carnival crew packs up and drives off!
The new economic model of both government and business is to make it simple. In hopes that we will go away after being fed a dressed up fancy big word or two along with fairy tale earning reports feeling that someone is working on saving our money and making the financial problems go away. The President is even planning on attending hearings this week, in which the banks and credit card industry explain why they have to raise credit card rates and bank fees to get back on their feet. Unfortunately the last four Presidents could attend the meeting and I doubt it would make us feel any better about this crisis!
No one understands how money is made or lost anymore and that goes for the banks as well as the people who put their money in them. Try as the powers that be seem to be doing in giving us the plain facts in terms we can understand, there is no understanding the underestimating of the lack of value or the flat out corruption that has taken over making, investing and controlling money in our country. And don’t forget, it’s a global market, it is everywhere. While that will not make anyone feel any better, the good news is we can ship tomatoes anywhere in the world, and at this point it appears we are going to need a lot of them!!