Saturday, February 2, 2013

U.S. Stock Markets Hit New Highs: Should You Invest?

Recently U.S. stock markets have hit new highs, and now they are near the all-time highs they hit just before the crash of 2008-2009. From the mass media coverage, euphoria reigns supreme and one gets the sense that one should invest rather than miss out on making big money.

But dear reader, please be careful. There is no greater oversight over Wall Street than existed before the crash and there is a revolving door between Washington and Wall Street, in which high paying jobs await those coming and going from public service. With such a blatant conflict of interest it should not surprise you that the public is largely unprotected.

Add in huge campaign contributions from often secret donors, but apparently among them from Wall Street firms and giant banks, and you can understand why there is so little oversight of the markets despite the crash.

Recently, some "Too Big To Fail" banks got caught rigging LIBOR (London Interbank Offered Rate) which is used to set interest rates directly or indirectly on most loans around the world. They paid a relatively small fine and business went on as usual. No-one was criminally charged.

Then another scandal broke. Some of those "Too Big To Fail" banks were laundering stunningly large sums of money for giant drug cartels, Russian Mafia and for other illegal operators who not only make money illegally, but over the last several years have killed thousands of people.

Once again, these banks paid relatively small fines, no-one is being criminally charged and it is business as usual. By comparison, if you or I robbed a liquor store or possessed a small amount of an illegal drug, we will be prosecuted and will likely go to jail, perhaps for years behind bars.

Ten years ago when Enron and some other giant firms committed crimes, those firms and their executives were prosecuted. This is not the case today. And not one person behind the crash of 2008-2009 has been prosecuted.

So if you plan to invest in the U.S. stock markets, please be skeptical for it is risky and in my opinion, potentially rigged by insiders. And the easiest way to sell to you is to appeal to your greed by giving you a sense through the media that unless you give Wall Street your money to invest, you are missing out on making a financial killing.


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