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Corporate Greed

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F*ckCommunism

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Stephen, I hope that you understand that I meant to be humorous myself, not insulting, as it is obvious that you have a sense of humor, as evident in your very statement, which I thought to be very funny.

I'm an optimistic sort of guy, so I always hope for the best. :rolleyes:

Thanks for taking the time to clarify, though.

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Certainly.

I apologize, as it seems that you did take it as an attempt to insult you.

No. Not at all. I thought I was communicating the opposite to you, in a funny way.

Hey, maybe it is you who does not have a sense of humor! <_<

Or, maybe I really don't, but I just think I do.

Or, maybe you really do, and you just think I do not.

Or, maybe I'm getting a headache!

Enough, already. Pass me a Good Humor bar. :angry:

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Well, perhaps you have broad shoulders, but it would certainly help were you to develop a sense of humor! ;)

When I was a kid we were very poor. We were so poor that we lived in a neighborhood bypassed by the the Good Humor truck. I have felt deprived ever since. :D

p.s. I wonder how many people here even know what the Good Humor truck was? I suspect that most were not born until after the demise of Good Humor. See http://www.icecreamusa.com/goodhumor/know.asp

Good Humor.

Now there's a capitalist trend right there!:D

In my neighborhood, Good Humor had competitors. We bypassed Good Humor for the better Mr. Softee, who had more variety. And Howard Johnson had ice cream trucks in our neighborhood as well.

I think these ice cream vendors all read the writing on the wall that it was far more profitable to sell their products in the big box supermarkets. ;)

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I think these ice cream vendors all read the writing on the wall that it was far more profitable to sell their products in the big box supermarkets. ;)

Perhaps it became more profitable due to the ridiculous restrictions placed on ice cream trucks by many local governments.

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  • 5 months later...
Spitzer now wants to run for Governor of New York state in 2006. I hope enough money is forthcoming for the campaign against him.

The good news for the week is that Mr. Kerik, proposed by Guliani's for the top post at Homeland Security has been rejected.

As an aside, it is interesting how the Republicans, rather than the Democrats, are publicising the fact that Kerik once employed an illegal immigrant as a nanny. Since most people would view this as a minor offense, I suspect they're trying to distract people from realizing that there were some really substantial skeletons in the closet of their former nominee.

I hope that powerful Republicans blame Guliani for this, and sideline him.

Here's hoping Spitzer makes a similar slip.

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  • 2 weeks later...
Hi, new here, just finished reading atlas shrugged and am full of ideas...

but i wanted to know, after reading some of the other posts regarding the war in iraq, etc, some of your views on the state of the economy...

i am canadian... a big bad, unsupportive canadian... i believe that if the US is waging war, they should at least be honest about what they are fighting for... i am also a former socialist who believes in government but not in excessive control... i don't think the govs should be passing laws like where you are and aren't allowed to smoke ciggarettes, whether you can open a bar here or there,  or tell me that i can't choose to smoke marijauana! i do believe that taxes can be levied at reasonable rates to keep roads, schools and our ever loving socialized health care system going...

but i want to know how egoists and objectivists react to the deceit of businesses like Enron, Tyco and even good ol' Martha Stewart Living, where executives fake reports and fluff up results to line their pockets, with no view of the impending crash that will come when they are found out... i love business, i love to sell, to work, to trade, to create... but when i hear about the dishonest practices, i feel like my friends who want to string up big business... so many of you seem happy that the US if fighting in Iraq, and so i would likle your views on these corporate crimes as well...

Most of the 'crimes' you have identified could not have existed without altruistic <bad) government intervention.

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  • 10 months later...

John Bogle (of Vanguard Funds) has written a new book about corporate governance. He's doing radio interviews to promote the book. This is a summary of what he said on from the show I heard (heavily paraphrased):

  • In the early days of capitalism, most managers were also owners. So, their interest was pretty much the interest of their companies.
  • Widespread shareholding changed that a bit. Still, the managers had to keep the shareholders happy.
  • Now, he says, there is another "layer" because the guy on the street often owns mutual funds and index funds and the like.
  • It is becoming easier, and more common, for managers to simply milk the system for a quick gain.

The solution he calls for is new legislation. Makes me suspicious, but I cannot say unless I known what he's asking for. He said that he's not calling for new rules about processes and procedures; he wants legislation that will create the principle that managers have a fiduciary responsibility toward owners (i.e. shareholders).

There is a bit of irony to this, because Bogle's Vanguard was a pioneer in Index funds, which relieve the "owner" from making even the most fundamental decision: what should I own? (Not that one should not own index funds, just that it is ironical that he is now complaining about something he helped along.)

If anyone reads the book, I'd be glad to see a review.

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he wants legislation that will create the principle that managers have a fiduciary responsibility toward owners (i.e. shareholders).

:lol: Corporate officers and directors already have fiduciary duties to shareholders (though not necessarily by statute). Unless he means something else by "managers." I'm interested to hear from anyone who reads the book about what exactly he means by this.

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That was my thought too. He might have been referring to managers of money (mutual fund managers and even pension fund managers). Even here, I figure there must be some legal responsibility; there must be some circumstance where an "owner" can sue. That interviewer didn't ask him to clarify.

I couldn't find the interview I heard, but I found another here (16 minutes) where he called mostly for individuals to "wake up". He didn't call for legislation. There is another interview here. A Google search brings up more stuff.

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John Bogle (of Vanguard Funds) has written a new book about corporate governance. He's doing radio interviews to promote the book. This is a summary of what he said on from the show I heard (heavily paraphrased):

  • In the early days of capitalism, most managers were also owners. So, their interest was pretty much the interest of their companies.
Which is actually true. Mutual funds and pensions are almost exclusively hulking burecracies. And given the level of regulation, nobody is really responsible for anything anymore. Plus fund companies, as I mentioned before, will actively rotate managers so that quite frankly they can minimize damage from a bad manager.
.

  • Widespread shareholding changed that a bit. Still, the managers had to keep the shareholders happy.

  • Now, he says, there is another "layer" because the guy on the street often owns mutual funds and index funds and the like.
  • If investors would take 20 minutes per year to actually read their prospectus or reports that are mailed out by the companies, then these two problems would resolve themselves. But, at least in my experience, 99% of those documents get tossed in the trash. Plus people investing cheaply or for free even makes it easy to get in/out of investments so yet another reason for people to not pay attention. After all, if it only costs them $10 to get in and out again then they really don't have to pay attention because they can leave if they need to. That's total crap of course.

  • It is becoming easier, and more common, for managers to simply milk the system for a quick gain.
  • The solution he calls for is new legislation. Makes me suspicious, but I cannot say unless I known what he's asking for. He said that he's not calling for new rules about processes and procedures; he wants legislation that will create the principle that managers have a fiduciary responsibility toward owners (i.e. shareholders).

    Yes, managers do have a fiduciary responsibility to their shareholders/clients. However, there is so much wiggle room it almost negates it. A good example is it's illegal for a mutual fund company to give expensive rewards (like trips) to people who sell lots of their funds. Instead of rewarding them with a trip for selling, high producers get to do "due dilligence" (or education in the risks and rewards of a particular fund or continuing education) in places like Aruba.

    Plus, it is rare that someone will ask a broker/advisor if they are being extra by a fund company or if they are earning a special reward for doing their special portfolio plan. People are afraid to ask. That or they don't know to ask.

    There is a bit of irony to this, because Bogle's Vanguard was a pioneer in Index funds, which relieve the "owner" from making even the most fundamental decision: what should I own? (Not that one should not own index funds, just that it is ironical that he is now complaining about somethinghe helped along.)
    Index funds, ETF's, etc all have a very good place in investing. It does help someone pick the industry or nation without having to do as much research or exposing themselves to the risk of investing in individual companies. But yes, passive investments are becoming more and more popular. And Bogle is right that people like them becasue they take alot of the decision making out of their hands. Plus people can blame the managers for losing money instead of taking responsiblity and exercising their own fiduciary responsibility. Of course, thanks to the internet we have evolved from investors to traders.
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    I agree, Scott. Individual investors and mutual fund managers both have to share the guilt, the first for not doing enough thinking, the latter for taking advantage of that fact. There's a lot of short term thinking going on. As an aside, I wonder what is the more fundamental error that underlies short-term thinking? If it is short term in the sense of being at the expense of the long term, is it a form of evasion? wishful thinking? what?

    Another legal/institutional factor that interferes with good owner decision-making is the "401k". Not only are owners putting their money into mutual funds without thinking, but often the funds they can put money into are limited to a small subset.

    Also at fault -- perhaps the root lies here -- are the professors of finance. Modern portfolio theory basically preaches the futility of applying thought to investment decisions.

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