“When Main Street jobs go overseas, Wall Street generally shrugs,” a USA Today editorial noted. “The typical response from the nation’s financial elite is that people who have lost work should tough it out and acquire new skills.” But now that Wall Street is losing business to foreign exchange markets, it is demanding government intervention.
Some of the regulation complaints may be legitimate. But as the USA Today editorial argued, the main reason Wall Street is losing business is that foreign competitors will provide similar services for much lower prices — something that Wall Street cheered when its own jobs and bonuses weren’t at risk.
Posted by Phillip Brownlee
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43 Comments
Competition is a great thing. The market will force down the overblown compensation of some on Wall Street who dont deserve the pay that they are getting.
However, many Wall Street execs deserve every penny, and they will prove it by working smarter and learning to compete for more business.
A good Wall Street exec has the speaking skills of a great trial lawyer and the math skills of an engineer. What is more, they can adjust their delivery to the audience, making their delivery more technical, for those who demand it, or more basic, for those who don’t get it. I have been in awe of the few I have met.
Watch out for one thing: how long until a foreign exchange starts asking American Businesses to trade American Corporate stock on that foreign exchange, exclusively?Yes, there are some hurdles to overcome, but Elliot Spitzer was a real jerk in New York, he punished some mutual fund companies, for instance, that came to him and asked his advice on “market timing” issues. In fact, Spitzer told one company, “Its your problem, deal with it” and then took that company to court 3 years later, over the issues that they had asked him about previously!I am a firm, even radical, believer in full disclosure and shareholder rights.However, if you make regulations too tough, Corporate America can always incorporate offshore and trade their stock elsewhere!A simple merger with a foreign company might do the trick.
In that event, what power will Congress or any State AG, like Spitzer, have?
This particular story says that Wall Street is worried about foreign companies NOT trading on US exchanges as much as they used to.Sorry, that isnt “outsourcing” of U.S. business —that is foreign business refusing to outsource to the U.S.
Oh, listen to the rich folks scream when it’s their jobs on the line. I’m having a tough time being sympathetic.
A few years ago, a university professor did an experiment in which he picked stocks by throwing darts at a board and then checked to see how he fared for the year against the so called “Wall Street experts” and in fact his portfolio actually bettered the “experts” by a little. The ugly truth is that Wall Street “experts” are not all that and are nowhere worth anything what they are paid. During a bull market, any dumbass with an MBA can manage a fund and make money. The real test of expertise comes during bear markets and who can make you money when the market is going south. And very few of the “experts” on Wall Street can do that. Those few are worth a lot. The others are not worth much of anything.
I’ll have to call Rajib, my new stockbroker, and get back to you on this one. :)
Good.
This is a case of folks cut by the very sword they swing.
There WAS a time when news of layoffs damaged the stocks of a company. NOW? News of layoffs causes a stock to surge.
It is part of the greed that is destroying this country.
“Sorry, that isnt “outsourcing” of U.S. business —that is foreign business refusing to outsource to the U.S.”
Dont you just love it when nut job supply side and tax cut armchair republican economists DEMAND the free market take care of things…
… until THEY are the ones the free market weeds out?
heheheheheheheheheh
Paulie Rossell, SURELY you are not suggesting the government interfere with the choices imposed by the free market?
SURELY you are not saying the free market has flaws? That consumers voting with their feet and their wallets are wrong?
Paul Rossell, as hypocritical as you think. Cant wait until fleetie and joe williams join him here. This oughta be fun!
hee hee hee hee hee hee
Still laughing here as Paul Rossell, the securities trader, flops around on this thread like a gasping fish on it’s way to the fryer.
VERY nice gymnastics though, paulie. You do get style points for degree of difficulty in executing those twists and turns. We are amused, and we do encourage you to play again…..
KS Farm Girl
Go back and read what I said:
Goverment regulations MIGHT force some businesss overseas! I did not say I wanted any regulations that interfered with the free market, I said that the governmetn is ALREADY raising some barriers to US business with excess regulations that don’t really help investors.
All of you libs need to understand, the “market” of investment advisors and brokers is as diverse as lawyers, politicians or doctors, or more so:
Bulls and Bears
Bond traders and Stock Traders.
Initial public offering types, (IPO types) who DESERVE their money if they do a good job.
Pit traders, who handle huge transactions in their heads and can make a profit on very slim margins.
Back office people, whose jobs are much like the jobs of a title company, in the Real Estate or Auto business, simply changing ownership and verifying legal stuff.
Then there are the hundreds of thousands of individual, licensed advisors or brokers out there — and we all disagree with at least some of the groups listed above, on a regular basis.
We also disagree with each other.
Some are fee based, some are commission driven, some are a combination of the two.Some hate “packaged products” like mutual funds and variable annuities, and some of us do little else but packaged products.You cant lump us all together.Believe it or not, the MAIN STREET advisors are more upset at problems on Wall Street, when they happen, than any of you can imagine.
Kev,I subscribe to the “efficient market theory” — there are actually several variations of this theory.In short, I think that trading individual stocks should be no more than a hobby, at best. I do not consider individual stock picking to be an “investment” as much as it is a past time. If you dont enjoy it, dont do it! Over time, I do not believe it is possible for the vast majority of people to beat the market. Everything will average out!Everything that can be known about an investment is priced into the current value of the stock.There is no legal way to consistently hit “home runs” picking your own stocks!Diversification is the key, and the best way to do that is to buy a mutual fund or variable annuity.
This is not an offer to sell or a solicitation of an offer to buy any security.Offers are made only by prospectus.
Yes, the lawyers would want me to say that!
By the way, this is another reason I use a fake name now. This Blog is a hobby for me. This stuff is purely for my own entertainment and for political purposes.
Oh, I see paulie rossell. When the government does something you DONT like, they are interfering with the free market.
When the government does something you DO like, they are mearly correcting some existing imbalance in the free market.
Imbalance = “doesnt go paulie’s way”
hehehehehehehehehehehehehehehehheheeh
Got it!
Like Ann Richards used to say, it just depends on WHOSE ox is being gored.
Does anyone else hear paulie sounding like a fearful ox? Wassa matter boy, afraid the free market wont protect your current economic advantage?
Economic darwinism is what you get with an unfettered free market in capitalism.
Now THAT has to be a bitter pill for freemarket wingnuts like paul rossell!
I guess paulie and I were typing at the same time. But I am ROLLING now at his verbose attempt to divert attention away from his whining about the results of the free market at work.
No one cares for a dissertation of the diversity of your profession.
The cold hard truth is, you and yours are not delivering what the customer wants. There are OTHER places the customer can do business, and, like the good free market economic men they are, they are taking what THEY see as the best deal the market offers.
And that aint you guys paulie.
Let the market work. Isnt that what YOU always say?
But nice try at diversion and red herrings. We are VERY amused, and we do encourage you to play again.
Listen to Paulie pushing the “variable annuity.”
No financial tool has screwed more people out of more money than the variable annuity.
You can make money on them . . . if you live to be 275 years old.
Variable annuities are what rich people use to get poor people’s money. Next to “pay-day loans,” it’s legal robbery.
The conservative in me is smiling. This needs NO government intervention (that is if NAFTA CAFTA etc and trade agreements were good fro the country, this should be no different.
It is WAll Street FINALLY seeing the same things the majority of Americans have seen for 2 decades ie, the outsourcing of our country. “Lt the market work.” is their battle cry, until it pains them a little.
This is PURE ECONOMIC KARMA.
BTW folks we are starting to see the problems of the entire outsourcing of everything in the American Conscience to other countries. It is time to overturn the trade agreements, take care of our own ports, and only offer commerce to business that actually pay taxes in America. (Most of the “free Trade” is that way because is is not taxed.)
“Watch out for one thing: how long until a foreign exchange starts asking American Businesses to trade American Corporate stock on that foreign exchange, exclusively?”
That is my same argument against illegal immigration. ONLY American Companies GET American protections. The companies want to “off shore” and not pay taxes,… fine, then there should be an import fee. THAT is how you keep the work here. That is what has wrecked our manufacturing sector. WE open our markets, and all the other little POS countries charge us an IMPORT TAX.
I am partially with you Econ 101, however, the American Corps. made this bed and they are now bitching about having to sleep in the same bed. They want “special privilige”. NOT good in a “free market”.
BTW, the US is the only “Free market”, outsourcing and trading companies to other countires is not “Free Market”. Look at Hugo Chaves. We built up their production via “free market” and he turned around and nationalized.
That one bit us in the butt. This moving of companies and off shoring is a scam, allways has been. It should NOT be allowed. A few profit and the nation suffers, not a good long term market strategy, nor a sounc economic policy.
Currently US Economic policy is for short term gain and Market maintenance. There is no long term strategy, or the trade agreements would go away, and import taxes and tariffs would be imposed.
you people are funny
Why would I give a rip, personally, over the high rollers on Wall Street?What happens to them doesnt directly affect me any more than it affects you.I simply might have some more knowledge than a few of you, on what is going on.That is all.I am not the least bit worried about foreign competition.HINT:Most of us have access to foreign exchanges, foreign securities and global investments!
CapnYou simply dont know what you are talking about.First of all, most stock is held by retirement plans.Therefore, those who make the capital gain and dividend arguement are missing more than half the market.Secondly, the “non-qualified” mutual funds out there actually dont give much tax advantage, either. Internal gains are pro-rated based on portfolio turnover, so most of that gain is, also, ordinary income.
Next, the biggest problem the average investor has is “time in the market” not “market timing” — Diversification and a LONG holding period will make a winner out of most strategies.
Finally, we WILL have more market crashes.Do you have insurance on your house?Why would you insure your house and not your portfolio?
For a nominal fee, a variable annuity can guarantee a death benefit that is never lower than the principal amount, often with annnual increases.A variable annuity can guarantee a lifetime income, without any loss of control over your principal, if done correctly.
I have met some 65 year olds that will still be alive 30 years from now.Current inflation rates mean that the value of the dollar will be 25%, at their age 95, what it is today.Show me how to guarantee an income to such folks, maintaining their standard of living, without equities?Now show me how do make it through the next market crash!
Farm Girl
My explanations, above, had a point.I make my income off of middle income people.There is very little chance that Joe Six Pack will pick up the phone and call Tokyo for insurance or investment advice.And if he does, good for him!I dont care, competition is a great thing.I am simply making the point that no law forces a company to list its stock on an American exchange.Regulators will lose much of their power if companies take that option.Me?It wont affect me a bit.
sorry, it wont EFFECT me at all, for you English nuts!
sorry, it wont EFFECT me at all, for you English nuts!
“Affect” is the correct word, notwithstanding your double post to the contrary.
Maybe you should take one of CrapnAmerica’s junior college classes.
You could learn to imitate false erudition.
AFFECT: to pretend, to put on, to touch, to change —AFFECTING: —which makes you feel emotion—
EFFECT: result/influence
I guess BOTH would work, huh?I thought I was wrong once, but I was mistaken!
“I guess BOTH would work, huh?”
Sigh. . .no, you pathetic moron. I’m not real (sic) big on language proscription, but noun vs. verb is 6th-grade stuff. . .
I guess you’ll have to wait for CrapnAmerica to explain for you!
PAUL ROSELL,
Learn how to use a dictionary.AFFECT: #1, to have an effect on; influence
CosmosWebsters Student Dictionary, 1999 Barnes and Noble Books:
Affect: [a'fekt] v. (a)to pretend/to put on. (b)to touch/to change sth. affectation n. pretense, affected, pretended, put on affecting adj. touching/which makes you feel emotion.
Cosmos as affected (pretended) to prove he is smarter than the rest of us, once again!
For the millionth time, I DO NOT teach in a junior college.
You’re welcome to go on believing that if you must . . .
And Econ, you were right the first time. “It won’t affect you” just like I don’t allow no-name trolls to affect me.
If I did, the EFFECT would be a waste of time.
*****
Concerning annuities, fixed annunities are bad, but they’re not horrible.
Variable annunities are horrible.
Why someone wants to give a private company a big lump sum of money so that they can then have it doled back out to them annually makes no sense to me.
When you let the company decide how MUCH to dole back out to you (the variable part of variable annunity), you gotta be nutz.
oops “annuity” — must have been thinking of “annul” as in annuities should be annulled.
I’m still thinking about “imitating false erudition.”
I can see imitating erudition, which would be false.
But if one imitated FALSE erudition, that would mean they were imitating conservatives.
Most CONs can’t even fake erudition however, so they opt simply to ridicule it.
“You could learn to imitate false erudition.”
That sounds like it would hurt.
PAUL ROSELL,
http://www.yourdictionary.com/ahd/a/a0120200.html“Affect: 1. To have an influence on or effect a change in: Inflation affects the buying power of the dollar….Usage Note: Affect and effect have no senses in common. As a verb affect is most commonly used in the sense of “to influence” (how smoking affects health). Effect means “to bring about or execute”: layoffs designed to effect savings.”
There is little floor traders and stock brockers do that couldn’t be done cheaper and just as well electronically or from someone operating in cyberspace. They just don’t like it when the crows come home to roost.
All you have to do is remember that AFFECT is a verb.
Here’s a little trick:
It starts with an A and verb starts with a V (toward the end of the alphabet. Effect is closer to the middle, as is Noun.
A……E…..N…..V
CosmosYou are living in the past.
Variable annuities, in the advanced forms we have today, are without a doubt the best investments anyone can make, if the purpose of the money is to provide for retirement.
Granted, “suitability” issues come up with some people. This product is not designed for funds that are not primarily ear marked for retirement. It is not for education funding, it is not for the downpayment on a young couples first house. For retirement funds, however, you can’t beat it.
Those who attack the concept either dont understand annuities or have other motives.We are seeing a battle between banks, insurance companies and securities firms right now.Granted, some large companies do all three functions, but most TV and radio financial shows are watched by active day traders and those who enjoy jumping in and out of the market.The advertising that supports those shows is pretty much bent towards the active trader, not the couple that simply wants to make sure they dont run out of money and that they stay ahead of inflation.Day trading is not investing. Day trading is gambling, but it is gambling that serves a public purpose, giving liquidity to the market.Jumping in and out of the market is not what retired people, who dont enjoy that kind of thing, should be doing with their money!
The truth is, most brokers and insurance agent realize, with the variable annuity enhancements that have come out, we now have a NEW liability.It used to be that everyone who got involved in the stock market simply understood that there were NO guarantees.That is no longer the case.A good variable annuity will guarantee income without restricting access to principal.
Those brokers who refuse to look at annuities for their clients now face this question, in the next crash, during arbitration:”Sir, you invested $100,000 in a mutual fund for someone who needed $5000.00 a year in income from that money, withoug losing control of their principal.Why did you refuse to consider a variable annuity?”In a 20% market decline, a $100,000 variable annuity would, with most companies, have the ability to provide 7% withdrawals for 14 years or 5% withdrawals for 20 years, depending on the option chosen at purchase. That is $5000 or $7000 based on original amount. Realistically, the guarantee amount will be higher for most people, based on market gains and adjustments, before the next bear market hits.That withdrawal amount would be based on the original principal, minus withdrawals, with annual step ups based on investment returns.
You cant beat it Cosmos.
There is absolutely, positively, no way you can argue against that attorney, in court, during the next bear market.
There are training classes taking place right now, among investment attorneys, on how to attack brokers for not advising variable annuities for at least a portion of their clients’ funds.
When the market goes down, they will be swarming like sharks. I do not intend to get eaten by them!
By the way, in a non-qualifed annuity, the entire loss can be written off when realized, if the annuity is cashed out.In a mutual fund, there are loss limit rules and you have to stretch out the loss over several years.
There are dozens of reasons why you are wrong.I have only mentioned a few.
CosmosYou are living in the past.
Variable annuities, in the advanced forms we have today, are without a doubt the best investments anyone can make, if the purpose of the money is to provide for retirement.
Granted, “suitability” issues come up with some people. This product is not designed for funds that are not primarily ear marked for retirement. It is not for education funding, it is not for the downpayment on a young couples first house. For retirement funds, however, you can’t beat it.
Those who attack the concept either dont understand annuities or have other motives.We are seeing a battle between banks, insurance companies and securities firms right now.Granted, some large companies do all three functions, but most TV and radio financial shows are watched by active day traders and those who enjoy jumping in and out of the market.The advertising that supports those shows is pretty much bent towards the active trader, not the couple that simply wants to make sure they dont run out of money and that they stay ahead of inflation.Day trading is not investing. Day trading is gambling, but it is gambling that serves a public purpose, giving liquidity to the market.Jumping in and out of the market is not what retired people, who dont enjoy that kind of thing, should be doing with their money!
The truth is, most brokers and insurance agent realize, with the variable annuity enhancements that have come out, we now have a NEW liability.It used to be that everyone who got involved in the stock market simply understood that there were NO guarantees.That is no longer the case.A good variable annuity will guarantee income without restricting access to principal.
Those brokers who refuse to look at annuities for their clients now face this question, in the next crash, during arbitration:”Sir, you invested $100,000 in a mutual fund for someone who needed $5000.00 a year in income from that money, withoug losing control of their principal.Why did you refuse to consider a variable annuity?”In a 20% market decline, a $100,000 variable annuity would, with most companies, have the ability to provide 7% withdrawals for 14 years or 5% withdrawals for 20 years, depending on the option chosen at purchase. That is $5000 or $7000 based on original amount. Realistically, the guarantee amount will be higher for most people, based on market gains and adjustments, before the next bear market hits.That withdrawal amount would be based on the original principal, minus withdrawals, with annual step ups based on investment returns.
You cant beat it Cosmos.
There is absolutely, positively, no way you can argue against that attorney, in court, during the next bear market.
There are training classes taking place right now, among investment attorneys, on how to attack brokers for not advising variable annuities for at least a portion of their clients’ funds.
When the market goes down, they will be swarming like sharks. I do not intend to get eaten by them!
By the way, in a non-qualifed annuity, the entire loss can be written off when realized, if the annuity is cashed out.In a mutual fund, there are loss limit rules and you have to stretch out the loss over several years.
There are dozens of reasons why you are wrong.I have only mentioned a few.
Thanks for the information, Econ.
BTW, it’s CapnA not Cosmos.
I appreciate what you’re saying, I still disagree.
For one thing, when was the last time the market went down 20 percent?
The worst I remember the Dow was dropping 40 percent under Nixon and price and wage controls, and that was only for about four years.
Probably the worst investment climate since then has been under Bush in which the Dow took five years to get back to where it was at the end of Clinton-Gore.
What’s my point?
1. You’re saying yourself that annuities are only good if the market is historically bad.
2. If the markets go down and stay down, what’s to stop the company issuing the annuity from just taking bankruptcy? Because all they’re doing is turning around and socking the client’s money in investments.
I don’t see how annuities can be any more secure than the investments that the annuities are based upon.
3. The whole thing sounds like somebody using your money to make real money while they give you a little bit of your money back. You assume the risk and they assume the profit.
Sweet deal . . . for them.
But you’re right–I haven’t educated myself on how annuities have changed recently, if they’ve changed.
I’d be happy to look at any sites you’d recommend.
Paul ROSELL,
I didn’t post anything about annuities… but considering how misinformed you are re human-caused global warming, future use of fossil-fuels, etc., I would NOT rely on your financial advice.
That’s good for you cosmos.
I would not take Paul F Rosell’s word that night is dark and day is light.
Your best investements are still real estate which is always a sure thing over the long term and stocks. I prefer index funds like large cap and small cap and I buy them from whomever gives me the best deal. I don’t need “advice” and I ain’t payin for it.
hee hee hee cosmos!
Most of the traders and brokers on the floor of the NYSE are high school graduates who lucked out and made big bucks for many years.
Some were fantastic at what they did but 80% of the jobs would have been performed better and more profitable with a more educated person.
Welcome to the real world Wall Street….
Did I mention that a couple of brokers were high school drop outs?
It’s amazing how far you can get in life when you know the right people.