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Bedrock of the Community
United States
12006 Posts |
Quote:
I do, however, have an admiration for the folks who thoroughly immerse themselves in a particular market, and who obsessively scrutinize every bit of news. I have zero admiration for people who devote their lives to lightening the pockets of the millions of fools who come into the market to earn a return and don't know any better. Not everyone who works hard in the market is in this camp, but in my experience, it is the vast majority. In the professional financial industry, it is perfectly legal, desirable and part of the business plan to fleece fools. The wreckage that this creates for millions of families is none of their concern. Professional finance has the sheen of being a reputable endeavor in our society, unlike gambling, and that makes the damage that it does more pervasive. IN NECESSARIIS UNITAS - IN DUBIIS LIBERTAS - IN OMNIBUS CARITAS THE MAN IN THE ARENA, Theodore Roosevelt at the Sorbonne Paris on April 23, 1910: " It is not the critic who counts; not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." My coin website: https://fairfaxcoins.com |
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Pillar of the Community
United States
6952 Posts |
I don't think any of the gold or silver bugs on this forum are pillaging the unsuspecting proletariat. I enjoy reading their interpretations of action in the precious metals markets. I don't put any of my personal money at risk in those markets, and it's therefore it's good, clean fun to hear their divining of the tea leaves and the resulting predictions.
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Bedrock of the Community
United States
12006 Posts |
Quote:
I don't think any of the gold or silver bugs on this forum are pillaging the unsuspecting proletariat. I agree. Just some observations about the world we live in.  IN NECESSARIIS UNITAS - IN DUBIIS LIBERTAS - IN OMNIBUS CARITAS THE MAN IN THE ARENA, Theodore Roosevelt at the Sorbonne Paris on April 23, 1910: " It is not the critic who counts; not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." My coin website: https://fairfaxcoins.com |
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Pillar of the Community
United States
1386 Posts |
Well I guess someone had to try huh? Personally I thought the original post by Brandmeister was extremely well written, definitive, unassailable and well just plain beyond reproach. Because it's an honest and quite profound observation and analysis of what's happening. Weird that it's being dragged in this bizarre direction tonight.. Yet I'm very intrigued by this experience I'm reading about... Please elaborate? Who are these people? What experience? Millions of families? How is it legal? In which financial industry? Quote:
I have zero admiration for people who devote their lives to lightening the pockets of the millions of fools who come into the market to earn a return and don't know any better. Not everyone who works hard in the market is in this camp, but in my experience, it is the vast majority. In the professional financial industry, it is perfectly legal, desirable and part of the business plan to fleece fools. The wreckage that this creates for millions of families is none of their concern. Professional finance has the sheen of being a reputable endeavor in our society, unlike gambling, and that makes the damage that it does more pervasive.
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Bedrock of the Community
United States
12006 Posts |
It it not illegal to separate fools from their money. However, there are tons of arrogant fools in the financial industry that brag about fleecing their (sometimes millions of) customers for profit. The get investigated by Congress and law enforcement and are made to pay restitution. Hardly ever does a white collar criminal go to jail. They can buy their way out. But they are dragged into Congress and courts and they are publicly shown to have bragged extensively about making the most money when they sell to the biggest fools in the market. The following is just one of endless examples:
During the April 2010 Senate Permanent Subcommittee on Investigations hearings regarding the 2008 financial crisis, lawmakers exposed internal Goldman Sachs communications. While there was no literal testimony about an official "dumbest investors list," internal emails showed employees using derogatory language about the complex mortgage products they were selling and deliberately seeking out less-sophisticated institutional buyers (referred to as "the short squeeze" or "the other side" of bets).
The most famous internal email string exposed during the hearings was between top Goldman executives Thomas Montag and Daniel L. Sparks. Discussing a mortgage-backed security deal known as "Timberwolf," Montag explicitly wrote: "boy, that timeberwof [sic] was one sh***y deal." Despite internal recognition that the product was toxic, Goldman sales teams continued aggressively pitching it to institutional clients, such as pension funds.
During the hearings, Senator Carl Levin and other lawmakers pressed Goldman CEO Lloyd Blankfein and trader Fabrice "Fabulous Fab" Tourre on why they sold assets they were actively betting against. Internal emails revealed that the firm purposefully marketed synthetic collateralized debt obligations (CDOs)—like the infamous Abacus 2007-AC1—to specific institutional clients who held optimistic views on the housing market, while a hedge fund (Paulson & Co.) helped structure the deals specifically to bet against them.
The "Muppets" Letter (2012): Former Goldman Sachs executive Greg Smith published a scathing op-ed in The New York Times after resigning, asserting that managing directors routinely referred to their own clients as "muppets" and looked for ways to rip them off.
General Wall Street Memes: The concept of a "dumb money list" or "dumbest investors" is a colloquial term frequently used on trading desks to describe retail investors or lagging institutional funds that buy toxic assets right before a market crash.
Ultimately, Goldman Sachs did not testify to holding a formalized list of "dumb" targets, but Congress did prove that its employees privately mocked the very investments they pushed onto clients. In 2016, Goldman Sachs agreed to a $5 billion settlement with the Department of Justice, admitting to misleading investors about the quality of the residential mortgage-backed securities it sold leading up to the crisis.
IN NECESSARIIS UNITAS - IN DUBIIS LIBERTAS - IN OMNIBUS CARITAS THE MAN IN THE ARENA, Theodore Roosevelt at the Sorbonne Paris on April 23, 1910: " It is not the critic who counts; not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." My coin website: https://fairfaxcoins.com |
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Bedrock of the Community
United States
12006 Posts |
Fabrice Tourre was charged with civil securities fraud by the Securities and Exchange Commission (SEC). Specifically, the government accused him of intentionally misleading institutional investors during early 2007 by structuring a financial product designed to fail, while lying about who chose the underlying assets and who was betting against them.
The core mechanics of his fraud involved three major actions:
1. Concealing a Toxic Conflict of Interest
Tourre created a $1 billion synthetic collateralized debt obligation (CDO) named Abacus 2007-AC1, which was tied to the performance of subprime residential mortgages. The SEC proved that Tourre allowed a massive hedge fund, Paulson & Co. (run by billionaire John Paulson), to help select the specific mortgage bonds that went into the Abacus portfolio. Unbeknownst to the buyers, Paulson specifically picked weak, unstable mortgages because the hedge fund planned to short the CDO—essentially placing a massive $1 billion bet that those exact mortgages would default. Tourre completely hid Paulson's involvement and adverse financial interest from investors.
2. Misleading the Independent Reviewer
To make the Abacus investment look safe and attractive to mainstream buyers, Goldman Sachs hired an independent third-party analysis firm, ACA Management LLC, to serve as the official "portfolio selection agent". Tourre deliberately misled ACA into believing that Paulson & Co. was a major equity investor who was investing hundreds of millions of dollars into the "long" side of Abacus. Because ACA thought Paulson's financial interests were aligned with theirs, they agreed to greenlight the portfolio. Tourre used ACA's reputable name as a shield to convince other institutional investors to buy into the deal.
3. Fabricating Marketing Materials
Tourre was charged with drafting and distributing marketing materials that contained material omissions and outright lies. The pitch books explicitly stated that the portfolio was independently selected by ACA Management, completely omitting the fact that a short-seller had co-designed it to maximize its chances of collapsing.
The Aftermath
The fraud worked exactly as intended. Within less than a year, 99% of the subprime mortgage portfolio was downgraded to junk status.
• The Investors: Long investors—such as European banks like IKB Deutsche Industriebank and insurance entities—lost over $1 billion.
• The Hedge Fund: John Paulson's hedge fund cleared a $1 billion profit from the collapse.
• The Trader (Fabrice): The SEC used Tourre's internal emails as key evidence, including a famous note to his girlfriend where he bragged that he was the only one who could survive the impending collapse, writing that he had managed to sell the complex bonds to "widows and orphans that I ran into at the airport." [A glib reference to the pension fund clients that managed money for widows and orphans]
Fabrice was found liable in civil court for fraud and never saw a day in prison. He is currently on the faculty of Baruch University in NYC. I suppose all good white collar fraudsters land on their feet in our Country.
IN NECESSARIIS UNITAS - IN DUBIIS LIBERTAS - IN OMNIBUS CARITAS THE MAN IN THE ARENA, Theodore Roosevelt at the Sorbonne Paris on April 23, 1910: " It is not the critic who counts; not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." My coin website: https://fairfaxcoins.comEdited by numismatic student
Yesterday 01:10 am
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Bedrock of the Community
United States
12006 Posts |
For an example closer to home, another example that most rich people don't go to jail for financial crimes:
The Hunt brothers were not criminally convicted of silver market manipulation, but they were found liable in a civil trial and settled civil charges with regulators.
Charges:
• Market Manipulation: Artificially inflating the world price of silver and silver futures contracts between September 1979 and March 1980.
• Rigging the Silver Futures Market: Accumulating an enormous, leveraged position (over 100 million ounces of physical bullion and massive futures positions) to force short sellers into a corner.
• Using Secret Global Accounts: Sneaking capital through a network of U.S., Swiss, Panamanian, and Bermudan accounts to bypass exchange rules.
• Antitrust Violations (Sherman Antitrust Act): Conspiring to monopolize and restrain trade in the market for silver and silver futures.
• Commodity Exchange Act Violations: Directly breaking federal rules regarding fair trading on commodities exchanges.
• Common Law Fraud: Operating a fraudulent scheme to deceive the public market and drive prices from $9 to over $50 an ounce.
• Racketeering (RICO Act): Nelson Bunker and William Herbert Hunt were explicitly charged with and found liable for civil racketeering for organizing a structured conspiracy with Saudi billionaires and foreign shell companies to manipulate the market.
• Damages & Bankruptcy: The court ordered the brothers to pay over $130 million in damages, which contributed to Nelson Bunker and William Herbert Hunt filing for Chapter 11 bankruptcy in September 1988.
• CFTC Settlement (1989): In a final settlement with the Commodity Futures Trading Commission (CFTC), Nelson Bunker Hunt and William Herbert Hunt were each fined $10 million and permanently banned from trading on U.S. commodity markets.
IN NECESSARIIS UNITAS - IN DUBIIS LIBERTAS - IN OMNIBUS CARITAS THE MAN IN THE ARENA, Theodore Roosevelt at the Sorbonne Paris on April 23, 1910: " It is not the critic who counts; not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." My coin website: https://fairfaxcoins.com |
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Pillar of the Community
United States
1386 Posts |
Ah okay, I see, I thought when you said in your experience I was going to hear how you had some actual experiences in the market. Like maybe you had some experience with the infamous Bernie Madooff. You know the guy that ran the biggest Ponzi scheme in American history. But he only fleeced about 40,000 people or fools as sadly you call them, not millions of families. And he went to jail for 150 year's, where he died. I suppose not all good white collar fraudsters land on their feet, you just gotta look for the right ones to pick as examples. Martha Stewart went to prison for what could be viewed as a minor securities fraud incident, compared to what's happening today.
But Yes all of which you wrote has happened in the past, just ask Google. It is happening now, just wait until the hearings start next year and beyond. And it will happen again. And from what I read in your examples I saw key words like "charges", "investigations", "fraud", "fined", "violations" and a list of others that clearly indicate none of the what you call fleecing of fools is "Legal". Wether or not they got away with it is another story. I saw Teflon Don John Gotti beat many criminal cases in New York City when I was younger, it doesn't mean what he was doing was "legal". It doesn't mean fleecing fools is part of the business plan of the majority of individuals engaged in the financial industry.
Now the Hunt Brothers, these were individuals trying to enrich themselves. People want to ride along in the FOMO, in what they think are get rich quick ideas or so called investments. I'm reminded of what my old attorney used to say to me all the time when I was involved in litigation decades ago - "ignorance is not an excuse". The court does not care if you didn't know, it was your responsibility to know. The same way the market does not care if you didn't know, it was your responsibility to know, and to do your due diligence.
Don't be mad at the market if it takes your money, be mad at yourself for not understanding what your putting your money into. Which brings us back to how this conversation started. I blamed the education system. Brandmeister took it 10 levels better and explained the problem we're experiencing both on this forum and in society. People wanting simplified answer on a particular action to take in a situation where they are not an expert.
Edited by Harry213
Yesterday 10:56 am
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Bedrock of the Community
United States
12006 Posts |
Quote:
Ah okay, I see, I thought when you said in your experience I was going to hear how you had some actual experiences in the marke I worked on Wall Street for decades, including at Goldman Sachs where I met many of the people dragged in front of Congress in the prior post. Fleecing fools is part of the business plan at every major firm. It has been documented since the days when investment banks were referred to as bucket shops. Probably bad for business to put that in your marketing materials. There has never been a shortage of fools in the market IN NECESSARIIS UNITAS - IN DUBIIS LIBERTAS - IN OMNIBUS CARITAS THE MAN IN THE ARENA, Theodore Roosevelt at the Sorbonne Paris on April 23, 1910: " It is not the critic who counts; not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." My coin website: https://fairfaxcoins.com |
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Pillar of the Community
United States
6952 Posts |
I cannot dispute that those things are terrible. Indeed, I switched my voting pattern over failed promises to prosecute the obvious cases of fraud and regulatory corruption and negligence during the financial crisis. However, I would like to offer a counterpoint on the rights of fools. I happen to believe that with rights come responsibilities.
When I was working my first job in high tech, it was in the post-2000 tech bust. My peers were college educated engineers. It is safe to assume most of them were above average IQ and that most possessed math skills considerably above the median American. During the quarterly rounds of layoffs, quite a number of those people bemoaned the short sighted or suboptimal nature of the firings, forced vacation consumption, and painful pay cuts.
Due to the odd way that our employee stock purchase program set its discount prices, we had locked in a massive discount that produced a 2-4x return for a couple years. Essentially everyone took advantage of that opportunity for easy money. Many folks had been consistently investing 10% of their salary into the stock plan for 10, 20, 30 years. As a result of these two factors, our employees owned a massive slice of company stock.
In the eight years that I worked there, I only ever met one other employee who actually voted their shares. I asked a lot of people directly, especially people who expressed anxiety or complaints. The nearly universal response was scoffing that voting our shares was irrelevant. Some people pretended to thoughtfully take the feedback and feigned an interest in voting their shares, but I very much doubt they ever did.
I sympathize with the hens. But it is hard not to judge their distress when they could vote to close the henhouse door, and instead simply leave it standing open for the fox. The board votes were split on important issues, and the elections were sometimes close. For a collection of people who regarded themselves as much smarter than the average bear, I always harbored a disillusionment at their total apathy towards the only real control they could exert over the company from the top down.
I'm not a fox apologist, but I think some of their disdain for the hens is not entirely misplaced.
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Bedrock of the Community
United States
12006 Posts |
Quote:
I'm not a fox apologist, but I think some of their disdain for the hens is not entirely misplaced. I'm not ignoring that fools are often greedy and lazy and looking to gain disproportionately from their gambling tendencies. That still doesn't mean that they deserve to be targets of fraud or outright theft. And then there's the collateral suffering that their spouses, children and others in their vicinity end up enduring as a result of their foolishness. IN NECESSARIIS UNITAS - IN DUBIIS LIBERTAS - IN OMNIBUS CARITAS THE MAN IN THE ARENA, Theodore Roosevelt at the Sorbonne Paris on April 23, 1910: " It is not the critic who counts; not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." My coin website: https://fairfaxcoins.com |
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Pillar of the Community
United States
6952 Posts |
One thing that I've been curious about lately is why gold and silver seem to stock correlating sometimes. I know that people sometimes trade that difference by switching back and forth. Is there an obvious underlying cause that splits them apart, when most of the market forces acting on gold and silver tend to be the same?
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Pillar of the Community
United States
1386 Posts |
Quote:
I worked on Wall Street for decades, Decades ago my brother in law, usually after a few drinks at a family gathering, would randomly say "I used to work on Wall Street". He did, he worked the mail room when he was younger. Never lead to anything in finance, he moved on to a different job, but still he proudly declared it, and I would look at him and grin, and nod with approval, as if I didn't know better. But in my mind I envisioned him sitting in the dimly lit, smoke filled, 1980's basement of an an old office building, devoid of any windows, surrounded by overflowing mail bins and boxes and 1970's decor. About 250,000 people work in the financial district of NYC, or "Wall Street" but only about 3/4 of them are actually involved in any finance. The rest consist of hundreds of other job titles in about 20 different occupational fields. Most have never seen a trading floor, sat behind a trading desk or understand what a margin call is. Everything from Security guards to marketing, legal to cyber security, maintenance to food and catering and yes shipping and receiving. I worked on Wall Street for decades too. I was in Electrical contracting and later broadened out to include IT & Network Infrastructure. So I was pretty much in and out of all those big name banks, office buildings and financial institutions we're all familiar with. For year's building out their office buildings, new headquarters, trading floors, data center build-outs, server farms, you name it. I was also around in other areas of NYC in the 1990s when we were building out for all the "Dot Com" AOL era companies, most of whom are no longer around today. In between I helped build and worked on hundred's of other projects from skyscrapers to factories and from school's and hospital's to bridges and subways. But I could always say that I worked on Wall Street for decades and I wouldn't be lying. I moved on to something different since 2022. My last decade of work before I retire completely. Safety and enforcement, Work zone speed enforcement to be more specific. Drive to sites, monitor camera's, do some paperwork, go home. Plenty of down time in between to do stock's and Silver and some trading when it's financial safe to do so. Edited by Harry213
Today 5H 16M ago
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Pillar of the Community
United States
1386 Posts |
Quote:
I sympathize with the hens. But it is hard not to judge their distress...,......................
I'm not a fox apologist, but I think some of their disdain for the hens is not entirely misplaced. It's because the Fox knows the hens have the attention span and patience of a chicken, no wait that won't work.. the attention span and patience of goldfish. The Fox plays the long game. When the hen doesn't see a result in ten minutes, in an hour, in a day, the hen moves on, the hen forgets. Or just gets lulled into complacency The Fox knows the hen has found the next shiny distraction to keep itself amused with and forgot about the fox. Eventually the Fox ends up with all of the hens shiny toy's, including the little round Gold and Silver one's that the hen loves so much. And it's why the hen doesn't realize it's even happening. It's why we will own nothing one day and be happy, as the saying goes. It's why there are days like the day I had last Thursday when I just want to throw my hands up in the air and say - you know what, that's it, let's just get it over with already. Sorry I'm just catching up on these posts, I'll get to the rest later. Quote:
I'm not ignoring that fools are often greedy and lazy and looking to gain disproportionately from their gambling tendencies. Wow now I'm really confused, are you referring to the victims or the abuser's? Sound's more like the crooks than the people that got taken advantage of. Edited by Harry213
Today 4H 2M ago
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Bedrock of the Community
United States
12006 Posts |
@Harry213, you seem to have been triggered by something I said. Not sure what that is but I hope you are able to get over it. IN NECESSARIIS UNITAS - IN DUBIIS LIBERTAS - IN OMNIBUS CARITAS THE MAN IN THE ARENA, Theodore Roosevelt at the Sorbonne Paris on April 23, 1910: " It is not the critic who counts; not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself in a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat." My coin website: https://fairfaxcoins.com |
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Posted 10/18/2026 5:18 pm
