The Turning of the Tide

Warren Buffet has said that a rising tide may lift all boats, but when the tide goes out you get to see who’s been swimming naked.

When the economy sours, it seems that the scandals come out. A couple years ago it was Enron and WorldCom. The latest news is about a couple of Bear Stearns fund managers, who told investors that all was well even while they were panicking over the sub-prime meltdown. They join a rogues gallery who thought that the good times could be just a little better for them if they shaded the truth.

As bees are drawn to honey, crooks are drawn to money. When times are good, no one wants to hear about Wall Street’s peccadilloes. But when times get tough this crowd gets no sympathy.

I’ll never condone wrongdoing, but the sad fact is that these guys are small potatoes. Why was Bob Rubin paid $10 million by Citigroup if not to warn them about the sub-prime shuffle? Citi has lost $150 billion in market cap since last summer; now Rubin’s at the trough arguing for a bigger bailout.

That’s a crime that will never be prosecuted.


Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-03T19:50:06+00:00 June 23rd, 2008|Global Market Update|0 Comments

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