FacebookTwitterGoogle+RedditEmail

Brokerman

by Russell Mokhiber And Robert Weissman

So, you want to buy some stock in an American corporation.

And you go to your broker.

Brokerman, please help me.

I want to buy some stock in an American corporation.

But here’s the thing, Brokerman, sir.

Is Wall Street a safe neighborhood, sir?

Can’t safely go into Wall Street, with executives being led away in handcuffs, can I, Brokerman sir?

Calm down, calm down — Brokerman says.

It’s all media hype.

I’m here on Wall Street, and I haven’t been mugged, have I?

But Mr. Brokerman, sir, I’m watching television and see these corporate executives being handcuffed by big burly guys in blue jackets and big yellow letters on the back that say F-B-I.

Turn off your television. It’s all tabloid stuff, Brokerman says.

Lookee here, Brokerman says — I’ve got these ratings.

I take all the financial data from all the publicly held companies and rate each one, A to F — just like grade school.

Now — Brokerman says — here are a group of stocks that you can buy safely — because the computer has rated them A.

Don’t worry. Trust me.

Everything is going to be alright.

Trust me.

Yeah right.

Andersen — guilty, obstruction of justice.

ImClone Systems CEO — under indictment, insider trading.

Martha Stewart — under investigation, insider trading.

Enron — criminal investigation.

Or what about Adelphia, CMS Energy, Computer Associates, Dynergy, Global Crossing, Halliburton, Kmart, Lucent Technologies, MicroStrategy, Network Associates, PNC Financial Services, Qwest Communications, Reliant Resources, Tyco International, WorldCom, and Xerox?

All of them are now facing serious questions about their business practices.

Three Rite Aid executives — indicted for cooking the company’s books by overstating revenues by $1 billion.

Trust me.

Trust me.

Remember Merrill Lynch?

Remember the Merrill Lynch analysts who were telling their customers — trust me, buy this stock, this stock is highly rated?

And then they would turn around and e-mail their buddies — hey, this stock is crap, why are we recommending this crap to our customers?

And then New York Attorney General Eliot Spitzer gets ahold of the e-mails, brings some kind of enforcement action, and goes before the television, and says the case is settled, Merrill will pay $100 million.

But Spitzer doesn’t get Merrill to admit wrongdoing. And he signs some kind of agreement that is totally unenforceable.

He later admits that had he forced Merrill to admit wrongdoing, the firm would have gone kaput. Just like Andersen.

And Merrill Lynch isn’t the least of them. Most of the big investment companies are now under investigation by the states for misleading investors just like Merrill did.

Weiss Ratings Inc. is an independent ratings firm (<www.weissratings.com>).

Earlier this month, Weiss Ratings released a study that found that among the 50 brokerage firms covering companies that have gone bankrupt this year, 47 firms continued to recommend that investors buy or hold shares in the failing companies even as they were filing for Chapter 11 in the first four months of 2002.

Lehman Brothers maintained six buy ratings on failing companies, while Salomon Smith Barney maintained eight hold ratings up through the date the companies filed for bankruptcy.

Also sticking with buy ratings until the very end were Bank of America Securities, Bear Stearns, CIBC World Markets, Dresdner Kleinwort Wasserstein, Goldman Sachs, and Prudential Securities.

“This analysis shows that Wall Street’s record is far worse than previously believed,” says Martin D. Weiss, chair of Weiss Ratings “Even when there was abundant evidence that companies were on the verge of bankruptcy, over 90 percent of the latest ratings issued by brokerage firms continued to tell investors to hold their shares or buy more.”

So, what happens when people think that the Street is being overrun by criminals?

They don’t go there.

And that’s what investors have started doing. Pulling out.

As the Dow heads below 9,000 (James “Dow 36,000” Glassman, where art thou?), can anyone doubt why?

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, and co-director of Essential Action. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999.

 

Russell Mokhiber is the editor of the Corporate Crime Reporter..

More articles by:

CounterPunch Magazine

minimag-edit

August 29, 2016
Patrick Timmons
Dildos on Campus, Gun in the Library: the New York Times and the Texas Gun War
Jack Rasmus
Bernie Sanders ‘OR’ Revolution: a Statement or a Question?
Richard Moser
Strategic Choreography and Inside/Outside Organizers
Nigel Clarke
President Obama’s “Now Watch This Drive” Moment
Robert Fisk
Iraq’s Willing Executioners
Wahid Azal
The Banality of Evil and the Ivory Tower Masterminds of the 1953 Coup d’Etat in Iran
Farzana Versey
Romancing the Activist
Frances Madeson
Meet the Geronimos: Apache Leader’s Descendants Talk About Living With the Legacy
Nauman Sadiq
The War on Terror and the Carter Doctrine
Lawrence Wittner
Does the Democratic Party Have a Progressive Platform–and Does It Matter?
Marjorie Cohn
Death to the Death Penalty in California
Winslow Myers
Asking the Right Questions
Rivera Sun
The Sane Candidate: Which Representatives Will End the Endless Wars?
Linn Washington Jr.
Philadelphia District Attorney Hammered for Hypocrisy
Binoy Kampmark
Banning Burkinis: the Politics of Beachwear
Weekend Edition
August 26, 2016
Friday - Sunday
Louisa Willcox
The Unbearable Killing of Yellowstone’s Grizzlies: 2015 Shatters Records for Bear Deaths
Paul Buhle
In the Shadow of the CIA: Liberalism’s Big Embarrassing Moment
Rob Urie
Crisis and Opportunity
Charles Pierson
Wedding Crashers Who Kill
Richard Moser
What is the Inside/Outside Strategy?
Dirk Bezemer – Michael Hudson
Finance is Not the Economy
Jeffrey St. Clair
Roaming Charges: Bernie’s Used Cars
Margaret Kimberley
Hillary and Colin: the War Criminal Charade
Patrick Cockburn
Turkey’s Foray into Syria: a Gamble in a Very Dangerous Game
Ishmael Reed
Birther Tries to Flim Flam Blacks  
Brian Terrell
What Makes a Hate Group?
Andrew Levine
How Donald Trump Can Still be a Hero: Force the Guardians of the Duopoly to Open Up the Debates
Howard Lisnoff
Trouble in Political Paradise
Terry Tempest Williams
Will Our National Parks Survive the Next 100 Years?
Ben Debney
The Swimsuit that Overthrew the State
Ashley Smith
Anti-imperialism and the Syrian Revolution
Andrew Stewart
Did Gore Throw the 2000 Election?
Vincent Navarro
Is the Nation State and Its Welfare State Dead? a Critique of Varoufakis
John Wight
Syria’s Kurds and the Wages of Treachery
Lawrence Davidson
The New Anti-Semitism: the Case of Joy Karega
Mateo Pimentel
The Affordable Care Act: A Litmus Test for American Capitalism?
Roger Annis
In Northern Syria, Turkey Opens New Front in its War Against the Kurds
David Swanson
ABC Shifts Blame from US Wars to Doctors Without Borders
Norman Pollack
American Exceptionalism: A Pernicious Doctrine
Ralph Nader
Readers Think, Thinkers Read
Julia Morris
The Mythologies of the Nauruan Refugee Nation
George Wuerthner
Caving to Ranchers: the Misguided Decision to Kill the Profanity Wolf Pack
Ann Garrison
Unworthy Victims: Houthis and Hutus
Julian Vigo
Britain’s Slavery Legacy
John Stanton
Brzezinski Vision for a Power Sharing World Stymied by Ignorant Americans Leaders, Citizens
FacebookTwitterGoogle+RedditEmail