Wall Street is fvcking crooked... 10 different WS banks ripped us off and now they pay $1.4 billion. Where does that go?

[brxndxn]

Article


After having time my senior year in high school to actually read analyst reports, financial statements, and forward outlooks for a few tech companies, I realized something was completely wrong.

The analysts recommended the exact opposite of what was obvious.. Amazon skyrockets on dust - and the analysts shout BUY! AMD goes down below fair value and the analysts yell SELL! Then, if you look at who was buying the stocks, you'd see the same analysts doing the opposite of what they recommended.

US Securities regulators have realized this and now fined the 10 banks a total of $1.4billion. But, it was us - the small investor - that got hurt the worst in the burst since we have nothing much more than analyst recommendations to begin with. What do we get from it?

Why the hell isn't there a scoreboard of analyst recommendations? Like, if Piper Jaffray says that Intel will crush AMD and then Intel goes down during the next year while AMD goes up, shouldn't they get a point counted against them so that people know they're less accurate because of that?

The Securities regulations do nothing to ensure that the analysts are even giving good advice. Now, they just have to launder money through a few people but can essentially do what they were doing before.

Never follow analysts' advice. Unless you're paying them to analyze, they're just trying to find ways to swindle you out of your money.

BTW, it's nice to know that the rest of us seem to have the same feelings: link

This settlement is really just pocket change to the banks that hold assets in the $trillions. Why the fvck doesn't everyone get Level 3 quotes? Also, there should be more ability for the consumer (small investor) to sue an investment firm. Anyone buying and selling stocks should be given access to the best quotes. It is unfair that one guy can buy a stock for sometimes a whole percent less than another guy at the exact same time.

Screw Wall Street.. there needs to be a much bigger consumer backlash. :|

 

[Hoober]

It is a capitalist country...

 

[brxndxn]

It is a capitalist country...

True capitalism would say that EVERY investor gets the same access to the same quotes. True capitalism would say that a few Wall Street banks do not get to do something comletely illegal and then get a mere slap on the wrist for it. True capitalism would mean that everyone has the same chance at WS.

The small investor is being screwed.

 

[dullard]

It is common knowledge that you need to be careful when buying stocks. Typically a stock/fund is advertized (and I consider analysts as adveritizing) if it has recently gone up significantly. Thus they tell everyone "look it just went up a bunch, buy some more!". Well of course that is the exact wrong thing to do. If it just went up significantly, then it is likely to come back down to normal levels. Instead if they advertize something as going up a lot, it is the time to sell it (buy low, sell high). This is of course assuming nothing spectacular has happened/will happen to the company to mean that it truely deserves to be permanently higher.

The opposite occurs when they say sell. "Look it is has been plummeting the last 6 months, time to sell!" the analysts say. Well isn't that the time to buy, when prices are low? Buy low, sell high. Of course, if the company looks like it is going bankrupt, you don't buy it, but otherwise you buy just after a long sell off period.

So yes, it is common knowledge that the analysts tell you exactly what not to do.

 

[dman]

Yep, I've noticed that too, kinda crazy, but, the analysts get paid to tell you what people have been doing with a stock for the last few mo's. Soon after their recommendation the price of the stock generally does the opposite... if buy, it drops, if sell, it rises.

then again, there are no rules to the stock market, it's just legalized gambling.

 

[Hoober]

Originally posted by: brxndxn

It is a capitalist country...

True capitalism would say that EVERY investor gets the same access to the same quotes. True capitalism would say that a few Wall Street banks do not get to do something comletely illegal and then get a mere slap on the wrist for it. True capitalism would mean that everyone has the same chance at WS.

The small investor is being screwed.

That sounds more like socialism than capitalism. You're on your own in a capitalistic society. There shouldn't be any one out there to watch your back for you.

 

[Mani]

Originally posted by: brxndxn

It is a capitalist country...

True capitalism would say that EVERY investor gets the same access to the same quotes. True capitalism would say that a few Wall Street banks do not get to do something comletely illegal and then get a mere slap on the wrist for it. True capitalism would mean that everyone has the same chance at WS.

The small investor is being screwed.

Yep, it's sad and unfortunate but the big investors and institutions have a HUGE advantage over Joe Investor. Online trading went a little ways towards bridging the gap but there is still a huge disparity.

And I completely agree on an analyst scoreboard. Wall Street analysts are for the most part useless, but some of it is a self-fulfilling prophecy, it's ridiculous how much power some of these idiots have.

 

[DaveSimmons]

Why the hell isn't there a scoreboard of analyst recommendations? Like, if Piper Jaffray says that Intel will crush AMD and then Intel goes down during the next year while AMD goes up, shouldn't they get a point counted against them so that people know they're less accurate because of that?

(a) You want it "free" just like the "free" advice from the analysts (you got what you paid for), and you don't want to think about who would actually pay the salaries, office expenses, etc.
(b) Anyone doing the rating would be sued. Then who would pay for the defense lawyers?

and
(c) There [ may ] actually be $10K-a-year private newsletters that do exactly what you want. I haven't bothered to look for them since I put my stock money into mutual funds.

 

[Shantanu]

You know what the best part is? The new regulations proposed by Elliott Spitzer will actually help the big Wall Street securities firms in the long term, because they act as a barrier to entry. That is, it's easier for Citigroup to handle $100 million worth of regulation costs every year than it is for a startup, off-the-Street discount i-bank.

 

[iamwiz82]

that money goes to the SEC who determines what happens with. I am sur emore than one investor will sue to be paid reperations for bad advice.

IMHO, everyone on wall street is out to make money for themselves, thats why it works so well. Sure you have lots of crooked investors, analysts and specialists, but NO ONE makes you listen to them. People got screwed because they heard what they wanted to hear, not because they searched for the truth.

 

[Ornery]

"...since we have nothing much more than analyst recommendations to begin with."

You can learn what they know OR, you can pick a broker with a proven track record if you want to go that route.

My wife told me about a story she saw on TV. Don't know who carried it, but maybe somebody else here saw it. This black guy ended up homeless, and I think he even had a very young child to look after. Not sure how it came to pass, but he ended up interning for a broker. Eventually he got REAL good and had quite a few clients. One client, who had never met him, was always peppering their phone conversations with racial slurs, jokes and what not. He was really impressed with this broker's performance, so he wanted to come and meet him. I'd love to have seen the look on his face he saw that his super performing broker was black after all. I guess it all turned out OK, because he gave all his business to this fellow.

Bottom line is, find a broker who knows his sh|t, and trust his judgment. Short of handling it yourself, that's about the best you can do.

 

[tcsenter]

After having time my senior year in high school to actually read analyst reports, financial statements, and forward outlooks for a few tech companies, I realized something was completely wrong.

The analysts recommended the exact opposite of what was obvious.. Amazon skyrockets on dust - and the analysts shout BUY! AMD goes down below fair value and the analysts yell SELL! Then, if you look at who was buying the stocks, you'd see the same analysts doing the opposite of what they recommended.

US Securities regulators have realized this and now fined the 10 banks a total of $1.4billion. But, it was us - the small investor - that got hurt the worst in the burst since we have nothing much more than analyst recommendations to begin with. What do we get from it?

The settlements were for specific instances of alleged fraud or wrong-doing, not generalized condemnations of all practices of all named companies. If you were harmed by specific instances of alleged fraud by these firms, than you should find an attorney to take your case and sue. Perhaps there's a class action in the works.

Never implicitly and absolutely trust a brokerage firm's recommendations just because they are a brokerage firm any more than you would trust a Catholic Priest with your son just because he is a Catholic Priest. You should know enough about the markets and the companies in which you invest that you will recognize bad advice when you see it.

If you place all your trust in any brokerage firm or advisor without also doing your own evaluation of the companies, markets, or funds in which you invest, you might as well be handing your checkbook to a stranger and saying "here you go, do whatever you want with this, I won't question it!"

Though brokers and advisors must be licensed, its not as though we're talking about a field of science. Investing is speculative in nature, brokers and advisors are required to be licensed only so the accuracy of that speculation is something [nominally] better than rolling dice or tossing coins or astrological projection. In any event, you're still getting nothing more than an 'informed guess', not the results of a PCR DNA analysis.

I am reminded of a humorous piece entitled "Everything I need to succeed in life I learned in Kindergarten".

Everything you need to protect yourself from bad investments you learn in Investing 101. You were injured only to the extent you were willing to toss all those fundamentals of sound investing out the window in hopes of getting rich.

That's the way it goes...thems the breaks.

 

[Jhill]

Stock trading these days is legalized gambling. Nothing more nothing less.

 

[Vic]

You're only now figuring this out?

 

[LH]

The $1.5billion is just chump change and only $400million will go to investors. However, this was just the first step.

Three words

CLASS ACTION LAWSUITS

These 10 banks will be losing tens of billions in the long run. Will people get all their money back? No but they will get some back, and somes better than nothing.