Going down like ninepins - who's next?

[Leonis]

Originally posted by Leonis: One.Tel, Ansett, HIH, United Medical Protection etc...

Oops. For those who don't know, these have been some of Australia's major collapses lately. There are more too I think... Froggy, what else?

[Silver Cheetah]

Originally posted by MagiK: quote: Originally posted by Silver Cheetah: By the economics editor of the most right wing paper in Britain, for anyone who isn't aware of the politics and ideology of The Daily Telegraph, (which is probably most people on this forum.) The Telegraph subcribes 100% to the prevailing free market ideologies (like it's not obvious... [img]smile.gif[/img] ) I would totally dispute the statement 'So far, only investors, a few market players and those goatee-bearded dotcommers have felt the impact of shrivelling shares.' Is this man living on another planet or what? Here in the UK, 100s of 1000s of people are going absolutely bonkers because their private pension plans are in total disarray. During the last couple of decade, a large percentage of the population changed from public to private pension plans. Now they find that the value of their savings has dropped dramatically. Public confidence here in private pension plans has gone through the floor, and there are a whole lot of very worried people wondering just how they're going to manage upon retirement. More and more companies are closing off their pensions schemes to new employees, who are having to go it alone in funding their own. However, due to the long bear market, and the recent spate of revelations re corporate misdoings, people no longer know what to do or who to trust. I seriously question this guy's flippant dismissal of the problems as confined to those who have been so far 'found out'. Maybe that's the way the situation is being perceived in Australia, but is far from the case in the UK. Basically we don't know WHAT the situation is. The plain facts are, how on earth is the investor supposed to know which sets of accounts are honest and which are not? If we can't trust the accountants, and if the company is lying to the market, how are we to know? Netscape's founder Jim Clarke said 'I don't understand why business journalists expect to be told the truth. The share price is too important for that.' In Britain, the Times last week published research shoing that 10 of Britain's leading 10 insurers have booked up to £5.7 billion in profits they have yet to earn, to boost the apearance of financial strength. The problems are actually inherent in the system. As soon as a company is floated, its worth is very much dependent on how its current performance and future prospects are perceived by the market. Those who buy shares, or bonds, do so on the basis that the company will provide them with decent returns on their investment. In the cut throat, dog eat dog environment of the markets, to be seen doing less well than expected is to wipe value of the share price, as investor confidence falls, (obvious but I thought I'd say it anyway). It is crucial that companies are seen to be doing well, otherwise, they run the risk of going to the wall. Of course sharp practice takes place. If it's that or ruin, many executives will go for the sharp practice, and hope that they get away with it, as opposed to seeing the value of the company decline and fall, and their fortunes with it. Of course they will look for any loophole they can find. So, how to stop it? Anyone got any ideas? I haven't. It's all very well to talk glibly of doing something to stamp out managerial propensities for manipulating earnings, but what? Answers on a postcard please - or just post 'em here.....

I know this will sound totaly unsympathetic but there is a reason that ANY intelligent investor knows the word "Diversification". The foolish people that worked for Enron for example had a huge percentage invested in their employer..big big stupid mistake, You already are 100% dependant on your employer for your income so you should not be putting the BULK of your investment dollars there too. Second, if you are going to have a private investment plan you should not put all the money into one kind of stock (example tech stock) For pension plans only highly diversified mutual funds should be looked at. Perfect examples of good pension funds are, funds that cover the "Wilshire 5000" or the entire DOW. While temporary setbacks (like the current crisis) will happen, over a 30 year period you will make money.

The problem here is not the system, it is the ignorant and or greedy people who do not educate themselves on how to best manage their funds. Yes there are shady characters manipulating their companies earnings statements but if you don't have all your money in one basket you can only be burned for a little instead of everything.

I cannot speak as to how your funds are managed over there, the laws and system are probably very different from here. All I know is that if you keep your funds properly diversified you should have nothing MAJOR to fear in having a privatized pension fund.

Perhap[s the schools should start teaching economics 101 again [/QUOTE]Some of the pension funds over here have performed pretty badly, so the prognosis is not good for those very near retirement. Britons generally are not so au fait with private investment as are Americans. 'Ordinary' people have mostly got into the game relatively recently, from the time of Thatcher onwards. The majority still don't have any investments outside their pensions, many don't have a company/private pension at all, and rely on the very small state pension.

I believe that in America, private investment is far more common than it is here. I don't think schools here teach any kind of financial management? I could be wrong. But they didn't when I went to school. I think it would be a great idea. If they had, my early life might have been very different! [img]smile.gif[/img]

[Leonis]

Originally posted by WOLFGIR: Just a couple of thoughts around the MS discussion here... Have you thought that peole might have wanted the MS products and the Monopoly basis it offers since that is a higher productive rate for companies, friends etc. You can communicate with each other easily. (Read easily apart form all the shite that can happen when you use something that is electronic ) Many buisnesses here chooses MS because they know it works with the rest of the market in 90% which means less time to spend on making up things as they go. Gamers buy MS cause they want to be able to play all the games. Monopoly isn´t always bad, and you can choose to stand aside. Competition means different products to place your product in a different light and hope that consumers choose your products. A more open program market, and maybe even some static choices in the OS´s should make most things work on different OS´s but then you have Monopoly on different comapny solutions and have a monopoly there as well. See GIF, PSD, JPEG .DOC and all the other litte endings out there, based on technologies and standards that have outmatched others.. Just a couple of thoughts, and by all means, if you want there is a way to make MAC and PC communicate almost without trouble now adays, and it is getting easier to use Linux as well

Here's a thought:
Say you strongly object to MS - So much that you wish to avoid them like a Vegan avoids animal products. But you also want to work and earn a living...
Can one morally object to an OS or a phone company your employer uses? Of course not, but why? You can object to someone's 'offensive' religious practices, or politically incorrect speech. (free speech? Bah! It exists in concept alone in the US and is nowhere in Australian legislation. Don't know about elsewhere)

Originally posted by Leonis: "The rich get richer, the poor get the picture" as Midnight Oil elegantly stated.

This is the biggest copout that has ever been propagated. The rich being rich or getting richer in no way prevents other people from getting wealthier. errr....well as long as you live here that is.

Im not going to comment on how other countries manage their systems, but in the USA, anyone from any background has the ability to excel and to succeed. I grew up at first poor, but my father worked and we made it to middle class. I started life after highschool with $20 and the clothes I was wearing. Quite a few thousand Asian Refugees landed in California with no mony at all, and have in the last 3 decades become fairly prosperous and now have thriving communities,

All around me are people who started with little or nothing and I see them doing quite well....no they aren't RICH but they are well enough off and fairly successful. So please do not use the excuse that rich people make money so poor people can't. It is a total crock.

While Im thinking of it...exactly when is someone considered "rich"?
And do you take into account that it is the so called "rich" people who start businesses and HIRE others allowing them to MAKE money and get ahead? There is no finite amount of wealth in the system, so that if Joe rich guy manages to make more that there is less for others. The whole concept of "the rich get richer..." is just an excuse to put the blame for personal failure onto the shoulders of someone else.

Sorry but I just had to say it.

[Silver Cheetah]

Originally posted by Leonis: Trefgarne feels at ease saying this: quote: The answer is that just about every one of the recent problems to hit financial markets has been caused by individuals acting incompetently, fraudulently or dishonestly.

then this

It starts right at the top, with Alan Greenspan, chairman of the United States Federal Reserve....(edit)...Nobody is questioning Greenspan's honesty or even his good intentions. He just got it wrong. That is more than can be said for many of the players on Wall Street who inhaled his heady gas and became delirious on the vapours.

That's bizarre; system or individual matey?
I'd have to agree about the 'robber barons' though. But current government and business practices are designed to support them as far as I can tell.

"The rich get richer, the poor get the picture" as Midnight Oil elegantly stated.

Solutions? How do you remove greed from an individual? Does it weigh about a pound? [/QUOTE]With you 100%. Re Trefgarne, well, he has an ideology to uphold, doesn't he, ie. the markets, left to themselves can do no wrong, generally speaking (ok, there might be a few rotten apples but they can be rooted out) and intervention is always, but ALWAYS bad.

[Yorick]

Originally posted by Silver Cheetah: I seriously question this guy's flippant dismissal of the problems as confined to those who have been so far 'found out'. Maybe that's the way the situation is being perceived in Australia, but is far from the case in the UK. Basically we don't know WHAT the situation is. The plain facts are, how on earth is the investor supposed to know which sets of accounts are honest and which are not? If we can't trust the accountants, and if the company is lying to the market, how are we to know? Netscape's founder Jim Clarke said 'I don't understand why business journalists expect to be told the truth. The share price is too important for that.'

Cheetah, it's preferable to trust that there are no problems when one doesn't see any, than to assume there are problems when one doesn't see any. Seeing problems when they are yet to be known is a form of paranoia. Fear of the unknown. We have to presume innocent until proven guilty or the wheels fall off.

This is a general rule of life. If we applyed that thinking to all our behaviour we wouldn't walk out the door because a car was going to hit us... such are the odds, or Al Qa'eda will blown up NYC on the 4th of July as predicted here.

All we know is that there are problems where found out. THe rest is unknown. UNKNOWN as you yourself stated. You don't know.

Thus your choice is, as ever, to live with optimism or pessimism. Optimism entails knowing you will get disappointed, but have the power of choosing to get over it.

As a musician in the industry I have to fight cynicism. I've been screwed by pretty much every company I've been with. I have to assume that all will be cool with the next company I'm with, or my career goes no-where. I wouldn't embark on any new projects. Same with relationships. Every old relationship fails somehow or it would still exist right? Law of averages would mean the next will fail too right? Going into it with the expectation of failure is a self fulfilling prophecy though. One has to presume it will work.

Fight fear with trust. Fight cynicism with idealism. Fight seeing problems in the unknown with seeing problems only where you KNOW they are.

The world is not as bleak as it seems. Russias recovery started with the collapse of the ruble. Seeming disaster brought about survival. Imports were priced out of the market, so domestic purchases stimulate growth.

Similarly Australia has a weak currency which has resulted in a strong economy, as our exports and services are effectively half price. The movie industry has grown through the roof because of this. Highly trained specialists at 50% off!

So the US dollar is falling a bit. Perhaps that will help rather than hinder the country... you just never know.

Originally posted by Leonis: SNIP......Telco stories......SNIP

So you uncovered unethical business practices, and rather than blow the whistle to do something about it you just tucked tail and left? Things like that need to be brought to light.

I personally worked for Sprint PCS when they first went to market in washington DC with this nations first ever Digital PCS system. I had access to all the billing practices and anything that was kept on the computer systems. (I was one of 6 Senior Systems people) Now I can say that we did everything possible to make sure our billing was accurate. However, I cannot tel you how many thousands of people tried to rip us off. We had people calling us with bogus complaints, lies and non-payment of legitimate bills......Our policy was to be polite and if nothing else would placate the irate customer give them an amount of free service. Oh yeah we occasionally ttok some people to court but these were big time scam artists. All in all sounds like out telephone system is a bit different.

When you uncover dishonest dealings if you don't do something about it...you are part of the problem...we each have an obligation to fix things when we see they are wrong

[Yorick]

Originally posted by MagiK: quote: Originally posted by Leonis: "The rich get richer, the poor get the picture" as Midnight Oil elegantly stated.

This is the biggest copout that has ever been propagated. The rich being rich or getting richer in no way prevents other people from getting wealthier. errr....well as long as you live here that is.

Im not going to comment on how other countries manage their systems, but in the USA, anyone from any background has the ability to excel and to succeed. I grew up at first poor, but my father worked and we made it to middle class. I started life after highschool with $20 and the clothes I was wearing. Quite a few thousand Asian Refugees landed in California with no mony at all, and have in the last 3 decades become fairly prosperous and now have thriving communities,

All around me are people who started with little or nothing and I see them doing quite well....no they aren't RICH but they are well enough off and fairly successful. So please do not use the excuse that rich people make money so poor people can't. It is a total crock.

While Im thinking of it...exactly when is someone considered "rich"?
And do you take into account that it is the so called "rich" people who start businesses and HIRE others allowing them to MAKE money and get ahead? There is no finite amount of wealth in the system, so that if Joe rich guy manages to make more that there is less for others. The whole concept of "the rich get richer..." is just an excuse to put the blame for personal failure onto the shoulders of someone else.

Sorry but I just had to say it.[/QUOTE]Sure it does. Growth doesn't occur in a vacuum. It's just a reallocation of resources. When a rich person accumulates they are gathering resources at the expense of another.

So the stats are that we who own a PC are considered 'rich'. Only 1% own one isn't that the figure? Any in the 'west' are supposedly in the top 20% of the worlds rich.

You are rich MagiK rest assured.

[ 07-02-2002, 10:42 AM: Message edited by: Yorick ]

[WOLFGIR]

To Leonis.
You can object of course, you have the right, but you might have to put aside your wishes to be able to continue your job. You can choose to take another job etc etc..

It´s not always easy to be living on your principles and beliefs.. Might give you a nice conscious, but an empty s´tomache.. :S

Guess that what someone told me is really true, life is full of sacrifices Usually your own...

[Silver Cheetah]

Originally posted by MagiK: quote: Originally posted by Leonis: "The rich get richer, the poor get the picture" as Midnight Oil elegantly stated.

This is the biggest copout that has ever been propagated. The rich being rich or getting richer in no way prevents other people from getting wealthier. errr....well as long as you live here that is.

[/QUOTE]MagiK, that is just so much total toss, if you'll excuse the experession. (Peace and love, babe... [img]smile.gif[/img] )

Okay, let me spell it out: the top 20% of American populations incomes are steadily rising. The bottom 20% are locked into low wage, low skill jobs, served by crap schools, and can't afford health insurance, or can't get it. The State of Working America is an independent analysis of the American labour market, and reports that the poor in america are less likely to exit poverty than the poor in Canada, Germany, Holland, Sweden or the UK.

Your Warren Buffet (America's fourth richest man) himself says that the US is in danger of developing an aristocracy of the wealthy. He says that it is wrong to construct a society whose likely leaders tomorrow, given the advantages of wealth, will be the children of today's wealthy.

In the US, 31% receive no formal training or education after leaving school. The ones who do go to college are mostly from a higher socio -economic background. Educational achievement is linked in the US MORE than elsewhere to family background. In many European countries, students can go onto to further education with the help of state funding, and so have a good chance of bettering themselves, even from a poor background. In the US, this is more difficult.

In Britain too, it's been made more diffficult for poorer students with the removal of the state funding system. There is some help for poor students, but not enough, and the level of admissions to university from students from poor backgrounds has dropped dramatically.

To attend a public university, the average cost currently is $7013 annually. But over the past 20 years, federal and state support to help fund students costs has declined. In 1965 the Pell Grant (largest fed programme for poor students) covered 85% of the cost of four years at university. In 2000 that had declined to 39%.

In the US, the SAT test is a key measure of intellectual ability offering entry into colleges and universities. However, private coaching to help pass the test is extensive. Fees in New York, for example, can be sky high. Who can afford it? Kids from better off families. There is no level playing field in America. On what do you base your assertion that there is?