Comments on: Ethics without regulation won’t cut it

By: Damian Palmares

Damian Palmares — Mon, 02 Feb 2009 21:40:06 +0000

Truly Max, maybe then they will realize what they have done is wrong and make amends to the public, who is very suspicious of the banking and financial industry, the government and our World leaders right now. What we need right now is action, something needs to be done to appease the public and give them some piece of mind. The TARP money that has “disappeared” needs to be found and people need to be held accountable, and you are right in saying that our regulators now, over the financial industry at least, are underpowered, under funded, understaffed and lack the intelligence to fight these “big boys”. Someone said their average salary is $50,000 a year. In all honesty, what do you expect with a salary like that, you wont get the top talent from business schools because they are money motivated, unfortunately, and know they can make ten times that in the financial industry with their networks and will continue to do so until we stop them.

By: Max Burgess

Max Burgess — Mon, 02 Feb 2009 18:53:08 +0000

Under the auspice of tighter regulation imposed by complex and costly organisations such as the FSA the fee earners and the bonus bandits hoodwinked the novice regulatory practitioners. The saying “big is beautiful” came true. Regulatory practices and costs forced the small operator, who mostly sold a “sincerity package” to win customer affection, out of business leaving the field clear to those who could manipulate the rules and regulation with weasel cunning. They (the big boys)had the money and the tactical advisors to do this whereas the small IFA and fund manager only had time to comply and a conscience that curbed misadventure.
The call for simplified products is paramount, maybe this way the regulators will be able to identify over extension and a feast that is only served at the end of the table. However, if you pay peanuts you only get monkeys so instead of novices overseeing the mighty would it not be a good idea to impose the duty of regulation on those that know the industry best and allow them to stand in judgement on each others investment and funding practices in much the same way OPEC controls a valuable world commodity.
Councils do work where as regulatory authorities will never be able to recruit knowledge where it matters. They at best, are amateur game-keepers. Right from the very beginning the FSA failed with the malfeasance of Michael Bright of the Inependent Insurance Co – they just don’t know what they are looking for so choose easy, small targets for self justification. My call is to put the bankers and fund managers into an ethical role and ask them to take time out to serve the poor !

By: H I Manning

H I Manning — Mon, 02 Feb 2009 17:36:04 +0000

We need another Cromwell a Lord protector once more
If Westminster is no longer fit for purpose it is a waste of time trying to re-introduce integrity
A gentleman wilding an axe once more on Tower Hill might
introduce some serious thinking in the corridors of power Halk a dozen should be enough

By: Damian Palmares

Damian Palmares — Mon, 02 Feb 2009 17:07:02 +0000

Sorry, I was just venting my frustration at the whole situation. And yes Bill, you are right that the investor is aware of the risk.

By: louis

louis — Mon, 02 Feb 2009 10:29:18 +0000

What is needed is a stringent criminal code for those that destroy the lives of thousands

By: MrBill, Eurasia

MrBill, Eurasia — Mon, 02 Feb 2009 10:00:45 +0000

It is good to vent frustration, but if you do not start with a good code of ethics, or code of conduct, as the backbone towards regulation you will ultimately failed if you rely on a rules based approach only. Finance is too complicated. It has to be. The world is a complicated place, and finance does not exist in a vacuum, but is instead based on the many hundreds of thousands of transactions and prices that take place in the real economy for goods and services.

Transparency? The average initial private offering or bond issue comes with hundreds of pages of disclosure. Even an average annual report can be a hundred pages. A term sheet is not a substitute for an investment circular. And by definition an abridged term sheet cannot point out all market and legal risks under all circumstances.

Investors, professional or otherwise, accept those risks when they purchase a financial security. To pretend otherwise is just naive. Too lazy to read the fine print? Well, even if you are not you will find many paragraphs and warnings to the various risks you are accepting by buying the security. So read the official filing twice if you want. You are still accepting the risks if you choose to buy. Risk is the flipside to yield and return. When you invest you accept both.

By: Damian Palmares

Damian Palmares — Mon, 02 Feb 2009 09:29:20 +0000

Are we really that dumb you guys? That you can’t see the protectionism coming if you put that into a stimulus bill…we don’t have the manufacturing base to “buy American” since our greedy corporations started outsourcing all of our manufacturing and factory jobs overseas to people who will work in a factory for $3 a day….are u kidding me? And then you say “BUY AMERICAN”…we don’t have anything that is American anymore except a failed Automotive industry that can’t get a handle on design and fuel efficiency…it almost makes me wonder if it has been done on purpose? Oh wait we have Wall Street…they can make us some money…oh, maybe not they took it and lost a huge huge unforgivable amount of our money and are laughing at us as they dole out billions of dollars of our money in bonuses. Nationalise everything..someone is out to get us, the honest people, and if we don’t stick up for ourselves we will all be living in shacks begging and praying to get picked to go work in the factory for $3 a day.

By: Damian Palmares

Damian Palmares — Mon, 02 Feb 2009 05:52:23 +0000

Wow…if that’s true then why even fight it…maybe we should just take up our arms and this world should be run by someone who would take care of the under privileged…this is pretty unbelievable if you ask me. Get rid of the people who want to take their work to that level and get rid of them entirely. It’s pretty unbelievable when you leave the world to the folks that are only concerned with advancing their career and don’t care about who they run over or to what extent the data they are providing may affect a certain country, in hat case Louis. Look where we are at right now…the “brilliant” folks at Wall Street, London…worldwide who want to advance their countries and have no care about anyone else in their world…we should just start over. Bring in new people…that wont be influenced by this kind of crap. We are at their knees right now unless we come together…the G20…our Governments…they need to put a stop to this. This incompetency needs to stop before we are all looking at each other thinking ….what now…once the entire world collapses and we are at war. Stop the protectionism….we are so wrong, the U.S., for trying to put that into legislation…all it is going to do is bring the rest of the nations against us. Lets solve these problems here first…there is a fix and then move to global cooperation, not protectionism.

By: LOUIS WOOLF

LOUIS WOOLF — Mon, 02 Feb 2009 04:26:24 +0000

When the IMF decides to assist a country, it dispatches a “mission” of economists. These economists frequently lack extensive experience in the country; they are more likely to have firsthand knowledge of its five-star hotels than of the villages that dot its countryside. They work hard, poring over numbers deep into the night. But their task is impossible. In a period of days or, at most, weeks, they are charged with developing a coherent program sensitive to the needs of the country. Needless to say, a little number-crunching rarely provides adequate insights into the development strategy for an entire nation. Even worse, the number-crunching isn’t always that good. The mathematical models the IMF uses are frequently flawed or out-of-date. Critics accuse the institution of taking a cookie-cutter approach to economics, and they’re right. Country teams have been known to compose draft reports before visiting. I heard stories of one unfortunate incident when team members copied large parts of the text for one country’s report and transferred them wholesale to another. They might have gotten away with it, except the “search and replace” function on the word processor didn’t work properly, leaving the original country’s name in a few places.

By: John

John — Mon, 02 Feb 2009 02:47:27 +0000

Nice discussion about ethics, however one should realize what the practical situation : in most countries the experience shows that no major project contract is signed without some party , either in company or government is gratified with some benefit. It is not an apologetic discussion that will right this, only if companies are prepared to forgo revenue change will come, we all should look out for the volontairs, which in practice are in short supply