A MARKETS GLOBAL-C graph 370.
(photo credit: REUTERS)
You never know – which is to say I never know – how people will react to a
column and who will react. Last week’s column, on the subject of why fundamental
corporate analysis has become of very limited use in a market that is openly
manipulated by central banks as part of their declared policy objectives, drew
some fascinating responses, davka from professional money managers.
they were basically in agreement is gratifying, but their additional insights
were really valuable. It seems that the situation is even worse than I had
thought, in that seasoned professionals relate to the markets as a)
dysfunctional and b) out of line with anything they have previously
Their conclusions are that the only realistic options
available are either to withdraw completely from investing – which in their case
means to find another profession and source of income – or to join the herd and
play by the new rules that, effectively, require treating the markets as a
casino that has been rigged by the house. Individual investors should think
carefully about what that means.
Meanwhile, the markets’ dysfunctionality
has been overshadowed by “the shutdown,” in which parts of the (federal)
government in the US have stopped functioning altogether.
This is caused
by the deliberate and systematic hobbling of the functionality of the
legislative branch of the US government. The price to be paid for what is now
permanent and intentional gridlock mounts steadily, and it is not measured
merely in dollars and percentage points of GDP lost.
The most frustrating
aspect of this mess, from the viewpoint of the average American citizen, is his
or her powerlessness to do anything about it. That holds true for the mess in
the financial system and for the mega-mess in the political system. The only
thing that individual citizens can do is to regain control of the
decision-making process in their own day-to-day lives.
In last week’s
column I cited a friend who said he was trying to learn about the world of
investments and financial analysis. But when he sought to enroll in one of the
many courses offered on these topics by private firms, he encountered such
highly aggressive sales techniques that he recoiled in disgust and eventually
found a small “study group” run by a committed and knowledgeable individual,
offering more substance for much more reasonable prices.
In fact, the
phenomenon of hard selling has exploded in Israel in recent years, and although
it is especially prevalent in the area of financial services, it is very
Everyone has their own pet peeves, but I hear many people
complaining bitterly about phone calls to them, at home in the evening or at
work during the day, in which they are blasted by recorded messages, almost
always seeking funds for a supposedly worthy cause. Personally, I find these
easy to deal with and have become adept at responding by disconnecting within a
second or two. Much worse than the recorded messages are the live ones, in which
real people solicit donations for organizations of every stripe.
the organizations are well known and entirely legitimate, while others belong to
the rapidly proliferating “hessed industry,” which is one of the primary growth
sectors in the burgeoning haredi economy.
There are two separate issues
here. The first is the difficulty in distinguishing between the genuine and the
fraudulent, and hence how – or whether – to respond. The second is that even if
the cause is worthy, who gave these people the right to “pursue me into my home
and attack me there?” – to quote a rabbi friend of mine who is neither stingy
nor unsympathetic. He is fully cognizant of his halachic and moral obligations –
but also knows that other people have the same obligations toward
Arguably worst of all are the sharply honed salespeople deployed by
financial firms to sell you things you don’t need at exorbitant prices. Two
recent examples from personal experience: The banks have excess funds and phone
to sell me money (i.e., offer me loans). I have learned to cut into the sales
pitch and ask, “What rate of interest you are charging?” When it turns out to be
in the order of prime plus 9 percent or 10%, I tell them to tell their bosses
that this is absurd and acceptable, and that’s that.
But the insurance
salespeople can’t be stopped at all. Their offers of wonderful policies that
will protect you against an array of awful threats, but that are available for
only a few more days, as well as their ability to rattle off facts and figures
like a machine gun are highly disconcerting. There is only one response that can
work: JUST SAY NO. Always, to all of them. Eventually, they will drop you from
their computerized databases and you will have to decide, by yourself, whether
and what to buy and to whom to give charity.
Maybe it’s a small thing in
the context of dysfunctionality at the national and global level, but it’s a big
thing for an individual person – and it’s the only thing that everyone can and