Wal-Mart released it’s 12 “Must Buys” for the holidays earlier this year, and you know what was on the list? Aqua-Dots. The toy that has a date rape drug in it.

Now I’m not saying that Wal-Mart is the only company with questionable business practices, but they’re the largest company in America, and they do more harm than just sell toxic toys.

You wanna talk about union busting? Or environmental degradation? Or their deplorable health care plan?

Wal-Mart has no regard for safety. It imports shoddy products from China without knowing if they’re toxic or not. And don’t even get me starting about how it sells out American jobs.

Hugh @ 52

neokneme,

I have never understood how institutional investors could be such chumps. The subprime meltdown was a disaster that could be seen years out and yet these groups walked into it like a bunch of gormless saps.

Although even this I think would have been a violation of their fiduciary responsibilities, if they had wanted to play these markets, they could have done so and left them in 2006, figuring the sh*t would hit the fan sometime thereafter. Instead they held them and got screwed, and now they have the chutzpah to act surprised about it all. Like I said, I don’t understand them.

Greed….

Greed, yes. But it’s interesting to figure out how it actually works. Since I was there during the tech bubble, I observed it first hand. It still took me years to be able to articulate it.

Of my own employer, I used to say they got up every morning, put on blindfolds & did the same thing that worked yesterday. Turns out that my employer was mainstream. Evey other Wall St. firm did the same. (Goldman Sachs is somethimes, though not always, an exception.) This works great while markets are going in a given direction, but it misses every turning point. Missing an upturn is not much of a problem, since they tend to last a long time, meaning you can get on the bandwagon. But missing a downturn can be devastating, as we are now observing.

Peel back another layer of the onion. Why do Wall St. & institutional investors behave that way? When I asked during the tech bubble, I would get weak sounding excuses. For example, when I would point out that the B-to-C internet stocks had already crashed, the answer would be, Oh that’s not what the Internet is about, it’s about B-to-B and those stocks are still going up. It wasn’t until later that I understood. These folks are in the quarterly beauty contest. They lose business (or get fired) if they underperform for more than a short period. So, in tht sense, they are “forced” to do what everyone else is doing. The other side is equally pernicious. No one (so to speak) gets fired or loses business if they made the same mistake that everyone else made.

So even those who are smart enough to see it coming, and chances are that won’t be many because denial is such a powerful force, can’t take action unless they want to downsize now rather than take a chance & perhaps downsize later.

I’ve mentioned before that I sold my tech stocks in Oct 99. The NASDAQ climbed another 50% and another 6 months after that. If I had done that for a client, I would have been toast at some point during those 6 months.

A point: I had my son when I was 45. He has Asperger’s Syndrome. More and more kids are having these neurological difficulties, and my take has been environmental polution in general, rather than any specific cause.

Hugh @ 52

Although even this I think would have been a violation of their fiduciary responsibilities, if they had wanted to play these markets, they could have done so and left them in 2006, figuring the sh*t would hit the fan sometime thereafter. Instead they held them and got screwed, and now they have the chutzpah to act surprised about it all. Like I said, I don’t understand them.

Greed….

That and the inability to think/act independently. If they’re on the “inside” then to go against the play would be heretical, I’d say.

The risk management training is overwhelmed by the short term loyalty urge which seeks to preserve the continuity of the “culture” over the needs of the “individual”.

neokneme,

I have never understood how institutional investors could be such chumps. The subprime meltdown was a disaster that could be seen years out and yet these groups walked into it like a bunch of gormless saps.

Although even this I think would have been a violation of their fiduciary responsibilities, if they had wanted to play these markets, they could have done so and left them in 2006, figuring the sh*t would hit the fan sometime thereafter. Instead they held them and got screwed, and now they have the chutzpah to act surprised about it all. Like I said, I don’t understand them.

What Hugh said. Especially since even _I_ can remember the *REIT market blowing up in exactly the same way and screwing over institutional investors/pension funds in places like California.

*Real Estate Investment Trust (iirc)

Feh!

FunnyDiva

Hugh @ 52

neokneme,

I have never understood how institutional investors could be such chumps. The subprime meltdown was a disaster that could be seen years out and yet these groups walked into it like a bunch of gormless saps.

Although even this I think would have been a violation of their fiduciary responsibilities, if they had wanted to play these markets, they could have done so and left them in 2006, figuring the sh*t would hit the fan sometime thereafter. Instead they held them and got screwed, and now they have the chutzpah to act surprised about it all. Like I said, I don’t understand them.

Greed….

Greed certainly, but it is the stupidity angle I don’t get. You didn’t have to be a rocket scientist to see that these markets were going to tank a few years out from when these mortgages really began to move. At that point the rates would change on them and make them unsustainable and the bubble would burst. These guys had to have known this but they held on to what was soon to be worthless paper anyway. That’s what I don’t get.