Thursday, August 12, 2010

Financial Fraud and Collapse Known Not Reported Clearly and Repeatedly by Media

Tags: Financial Collapse Fraud by Wall Street/Banks Known Early But Not Reported So the Public Understood, Hedge Funds Survived Had Inside Information

I noticed a great deal of volatility with a downturn in the market in early 2007. This usually means the Federal Reserve is buying the index funds and the big players are getting out or becoming more conservative to allow the market to drop too steeply. I diversified worldwide and got out of mutual funds into index funds. I had no idea how much leverage was in the system. I thought it was mainly the housing market mortgages. I advised friends to sell their homes in high uptake in house prices, but no one followed my advise as usual when I gave them the facts.

Most of the smartest investors who have influence to know more than we know are heavily into cash as are the hedge funds who were not the 3,000 that failed. No one really seems to know what will happen although they seem to give their hedged advice readily on television. Even the Emerging Markets which are doing quite well now in Brazil, India, and China, it is not a risk free market. Remember for most emotions control what individual investors do in the market. Many are making the mistake of trading Exchange traded funds with many professional traders having a decided advantage. Stock Picking propagandized by mutual funds to get investors is not working. The index funds or S&P 500 determines the price of stocks.

Even longer termed Treasury Bonds and Notes could present a longterm risk so go for the shorter yields to increase safety. When interest rates or demand changes, large changes in demand could result in large losses. Corporate bonds with good dividends are favored now. Investing in the five food monopolies might be prudent because Climate Extremes might make food very scarce so every country who can pay a higher price will and poor countries will suffer. An index fund in oil companies might also be prudent for the long-term. Oil is sold internationally so oil in the Gulf will provide jobs but not necessary make oil cheap for us.

There is a huge amount of liquidity or cash now, so no matter the news coming out, I would be on the optimistic end and start gradually investing small amounts before the steep run up. Don't leave out the emerging markets. If some areas go up much better than expected, you might considering some of profits to other parts of your investments. I do it automatically every quarter by my advisory company.

Remember, no matter who talks about keeping taxes low, it will go up unless we greatly reduce our military related spending which I think is impossible now because it serves as a major part of our economy along with Wall Street and Banks unfortunately. Too many jobs are involved all over the country.

Note that I am far below the intelligence and knowledge on Wall Street so all I can expect is that you might at least think about and start reading books which I have recommended in the past. Lots of very good books now, surprisingly. Browse through the books at your book store and find one you like. Read the Table of Contents, the Introduction, and the first and last chapters at the store.

Television where most Americans get their news or not, thrives on short Sound Bites to report the news so they have time to dump advertising into our brain. Our temporary working brain which has a small capacity frequently gets deleted because we fill it new stuff in a rapid manner on television. I have to concentrate hard to absorb important facts and ignore most of what I see and hear on television.

Many times I just listen to it instead of watching the pictures except for Margaret Brennan on Bloomberg television on financial analysis. Financial news on TV makes it hard for most to really understand it because they often have an opposite view given equal access no matter how crazy in a similar manner to our political news on television.

Our brains are shrinking because our memory brain cells in the hippocampus is not used enough. Use it or lose it.

Of course, I think confusing us is the media’s main role except for parts of MSNBC with Maddow and Olbermann who take the time to explain things in more detail. Note that soundbites used in television news very often does not help our understanding so we react emotionally to news so it helps the Republicans because they always try to scare us about the “Other” and lies about their opponents by reading soundbites from Billionaire established Think Tanks. They say the exact same thing and behave like robots with emotion.

I normally skip the news on MSNBC which emphasizes polls too much to shape our thinking. Why do you think they use polls so much? It is not used to inform us but to mislead us because polls are develop by corporations which may have interests contrary to ours.

Jim Kawakami, August 12, 2010,

Power Problem by Dean Starkman, Columbia Journalism Review CJR May/June 2009, “The government, the financial industry and the American consumer—if they had only paid attention—would have gotten ample warning about this crisis from us, years in advance, when there was still time to evacuate and seek shelter from this storm.” Diana Henriques, New York Times business reporter, speech at The George Washington University, November 8, 2008

“But anybody who’s been paying attention has seen business journalists waving the red flag for several years.” —Chris Roush, “Unheeded Warnings,” American Journalism Review, December/January, 2009

“I’m kind of curious as to . . . why is it that people were shocked, given the volume of coverage.” —Nikhil Deogun, deputy managing editor, The Wall Street Journal, quoted in “Unheeded Warnings”

“For in an exact sense the present crisis in western democracy is a crisis of journalism.” —Walter Lippmann, Liberty and the News, 1920

(The real truth is that Lippmann supported journalists not telling the public the whole truth because they could not understand it or get too emotional! This is about the time that Official Journalism Schools was started to cut down a diversity of newspapers expressing all points of view and news. They wanted to control what Americans saw and heard and read. This was the start of our Journalists and government (President Wilson) to get us into World War I at a huge cost because young soldiers were the biggest victim of the 1918 Bird Flu Pandemic. Jim)

These are grim times for the nation’s financial media. Not only must they witness the unraveling of their own business, they must at the same time fend off charges that they failed to cover adequately their central beat—finance—during the years prior to an implosion that is forcing millions of low-income strivers into undeserved poverty and the entire world into an economic winter. The quotes above give a fair summary of the institutional response of the mainstream business press to the charge that it slept on the job while lenders and Wall Street ran amok. And while the record will show this response is not entirely wrong, one can see how casual business-press readers...

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