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.

Like What You’ve Read? Support CounterPunch
Weekend Edition
July 31-33, 2015
Roberto J. González – David Price
Remaking the Human Terrain: The US Military’s Continuing Quest to Commandeer Culture
Jeffrey St. Clair
Bernie and the Sandernistas
John Pilger
Julian Assange: the Untold Story of an Epic Struggle for Justice
Lawrence Ware
Bernie Sanders’ Race Problem
Will Parrish
The Politics of California’s Water System
Andrew Levine
The Logic of Illlogic: Narrow Self-Interest Keeps Israel’s “Existential Threats” Alive
ANDRE VLTCHEK
Kos, Bodrum, Desperate Refugees and a Dying Child
Paul Street
“That’s Politics”: the Sandernistas on the Masters’ Schedule
Ellen Brown
The Greek Coup: Liquidity as a Weapon of Coercion
Sam Husseini
How #AllLivesMatter and #BlackLivesMatter Can Devalue Life
Stephen Lendman
Russia Challenges America’s Orwellian NED
Jeffrey Blankfort
Leading Bibi’s Army in the War for Washington
Geoffrey McDonald
Obama’s Overtime Tweak: What is the Fair Price of a Missed Life?
Brian Cloughley
Hypocrisy, Obama-Style
Robert Fantina
Israeli Missteps Take a Toll
Pete Dolack
Speculators Circling Puerto Rico Latest Mode of Colonialism
Paul Buhle
The Leftwing Seventies?
David Swanson
Vietnam, Fifty Years After Defeating the US
David Rosen
Hillary Clinton: Learn From Your Sisters
Shepherd Bliss
Why I Support Bernie Sanders for President
Louis Proyect
Manufacturing Denial
Howard Lisnoff
The Wrong Argument
Robert Hunziker
Human-Made Evolution
Colin Todhunter
GMOs: Where Does Science Begin and Lobbying End?
Masturah Alatas
Six Critics in Search of an Author
Mary Lou Singleton
Gender, Patriarchy, and All That Jazz
Ron Jacobs
Black Literature and the FB Eye Blues
Charles Larson
Tango Bends Its Gender” Carolina De Robertis’s “The Gods of Tango”
July 30, 2015
Bill Blunden
The NSA’s 9/11 Cover-Up: General Hayden Told a Lie, and It’s a Whopper
Richard Ward
Sandra Bland, Rebel
Jeffrey St. Clair
How One Safari Nut, the CIA and Neoliberal Environmentalists Plotted to Destroy Mozambique
Martha Rosenberg
Tracking the Lion Killers Back to the Old Oval Office
Binoy Kampmark
Dead Again: the Latest Demise of Mullah Omar
Kathy Kelly – Buddy Bell
No Warlords Need Apply: a Call for Credible Peacemaking in Afghanistan
Ramzy Baroud
Darker Horizons Ahead: Rethinking the War on ‘IS’
Stephen Lendman
The Show Trial of Saif Qaddafi: a Manufactured Death Sentence
John Grant
The United States of Absurdity, Circa 2015
Karl Grossman
The Case of John Peter Zenger and the Fight for a Free Press
Cesar Chelala
Cultural Treasures Are Also Victims of War
Jeff Taylor
Iowa Conference on Presidential Politics
July 29, 2015
Mike Whitney
The Politics of Betrayal: Obama Backstabs Kurds to Appease Turkey
Joshua Frank
The Wheels Fell Off the Bernie Sanders Bandwagon
Conn Hallinan
Ukraine: Close to the Edge
Stephen Lendman
What Happened to Ralkina Jones? Another Jail Cell Death
Rob Wallace
Neoliberal Ebola: the Agroeconomic Origins of the Ebola Outbreak