The financial community apologizes

Yes, the bankers are finally saying sorry to you and me

Important note regarding financial advice:

This is an APOLOGY and CORRECTION issued by the global financial industry (formerly known as the Masters of the Universe, the Lords of Capitalism, the Gurus of Free Market Economics and so on).

Our headquarters were in Wall Street, New York, but we had representatives in every major city on the planet.

Our reps wore black suits, had fancy offices in the central business districts, and promoted our philosophies in every newspaper.

Today, we are using this space to issue an unqualified apology to, well, pretty much everyone else on planet Earth. And particularly to folk in emerging markets such as Asia.
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First, we’d like to apologize for the "long-term investment fallacy".

We told you in hundreds of books, thousands of speeches and countless financial advice columns that stocks may fall in the short term, but always rose in the long term.

The phrase “long term” was traditionally defined as a generation, which is 25 years. We now realize this was completely wrong. Following this advice, millions of people bought stocks in Japan in the 1980s, when the index hit 38,000 points. They are now about to retire and are wondering why the index, more than a quarter of a century later, hovers at around 7,000 points.

Oops! Sorry!
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Second, we wrote large numbers of negative reports about organizations in emerging markets. In particular, we never wrote about banks in China without sneeringly adding the words "which are technically insolvent".

We now realize that there are many insolvent banks around the world, and the worst examples are not in Asia. They are in London. And Iceland. And right here in Wall Street.

We goofed. Sorry!

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Third, we peddled the wonders of globalization. We and our acolytes, the financial press, worked tirelessly to tell the world that it was a good thing that your bread came from Germany, your butter from New Zealand and your marmalade from Valencia. We now realize this makes no financial sense at all. (Not to mention the fact that it causes climate change which might just destroy the world.)

In recent weeks it has become obvious that the one large country which has escaped the financial tsunami is India, which ignored almost everything we said about globalization.

Oh dear. Yep, we screwed up.
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Fourth, we pushed the phrase “trade not aid”. When your organizations were in trouble, we said they should not receive bailout aid, since free market principles required badly managed institutions to go bust. But when our car makers and other institutions started to go belly-up, we realized that sometimes you should give troubled organizations bailout funds.

Ouch. Sorry again!
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Fifth, we promoted commoditization of bad investments. We thought that by chopping them into small pieces and selling them to lots of people, risk would be lowered. We now realize that bad investments are bad investments, and the more people involved, the more people lose money.

Yeah. MAJOR goof-up.
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To sum up, much of what we told you was wrong. We promise not to do it again.

In the meantime, if you see an unemployed person in a black suit wandering around your nearest central business district, please be kind. Buy him a bowl of rice.

But don’t believe a word he says.

Comments

[Danny Lam]

Hang the bankers!
Hang the cheaters!

[Naruto]

They chase all the hot chicks!,
They drive the best car!
They talk with their head up!
they think they are the best of the best!

Now, they should learn a lesson ---

"There are no free lunch"!!!!

[Ellen]

I know you are just having a bit of fun but what you say is actually quite accurate. we really did get terrible advice from the financial community for many years. it seems to me that they really should make some sort of apology like this..

[BJ]

Dude, I like your humor columns but your third point is definately off the mark. Are you saying all countries should go back to autarky? Like a pre Deng China?

[Nury]

Hi, BJ, thanks for your kind comments, much appreciated.

It's funny, I originally intended the article above to be a laugh, but as I wrote it I got more and more serious.

I actually believe most of the arguments above, even number three, which does not promote autarky, but says that transporting stuff around the world is not automatically a good idea.

If you're interested, here's an fascinating article on the subject: http://www.bbc.co.uk/food/food_matters/foodmiles.shtml

Or look up "food miles" on wikipedia for an intelligent discussion of the subject.
cheers

[Shaik Anwar Ahamath]

What is conspicuous by its absence in your article is the odd ball financial institutions in Sri Lanka. Amidst all the cries for devaluation, the Central Bank has not only resisted but has also propped up the Rupee by sacrificing almost all of their foreign currency reserves. The result of this is that their major exports suddenly became too expensive (almost all of their competitors have devalued their currencies) and now have had to go cap in hand to the IMF for loans to help meet their foreign currency debts. I am building a nest egg in Sri Lanka and have personally suffered with the madness Eg. In September 2008 I was getting Rs. 224.00 for the £ and now I am lucky if I get Rs.160.00. Part of it is due to the weak £ but in the global credit crunch,this is making the Sri Lankan Rupee the strongest in the world. It's a great trick achieved without any significant income generators. The only gain is prestige and cheaper imports which the government is trying to discourage anyway.

[Nury]

What Shaik says is true. It is mindboggling that the Sri Lankan rupee is actually rising and just goes to show the truth of the contrarian theory of investment. The SL rupee has traditionally been worth nothing at all as this article about me trying to buy stuff with it shows: http://mrjam.typepad.com/diary/2008/05/what-the-shrink.html

Since the whole contrarian theory seems to work so well, I guess we should all be investing in Sri Lanka, Palestine and AIG.

[fardel]

- Hi Todd ,how'r you doing?
-Good Bob.Since i closed Screwup Ltd , I have been a teacher in HK ;I teach English;what about you?
- I'm fine thank you;I closed Ripoff Intl last June, before the s...t hit the fan.
I live now in Middle-of-nowherecity, in Ceylon where I started Hide -a- Buck Inc, .
I bought an island the size of Long Island for peanuts;I am building a resort with my property on the sea, and a fishing village in the background .
-Aren't you missing the " civilization"?
- Nope, here the civilization cannot catch me: there is no extradition agreement with the-rest -of the-world.
I am safe;
And i am building MY civilization;
The locals do not understand zip about international affairs , so I am teaching them ( and they are paying me big bucks for it). I support their cricket national team
Here I am a King;
By the time the s...t is over I shall have built my own town with Marinaz ,my own Bank ,Safe-haven Trust & Co , Casinos,AND an international airport .
My wife Sally got bailout funds to save Crooked Airways.
With this money , she is starting our own airline here,Run-away Intl
It's foolproof.what are the news ,the OTHER news ?
- Bad;Didn't you hear?
- Nope , I am in hiding and there is no media here;
- Good for you,
- How bad?
-Real bad , the rest-of-the-world medjas are after us.
We tried to rig the Us Presidential election, but we failed to control the votes; you messed up with too many people with your subprime scheme.
- Surely , you could pull out a few congressmen from you magic hat, like you did last time.
-Nope , not this time.They elected a black guy,whom nobody knew a year ago.
-WHAAAAAT?
-Yes and now the REST-Of -THE-WORLD is after us with Con Network News , kissing the new guy's butts;
- Whow.That's really bad
- Why don't you contact Freddy at Con Broadcast service and publish a Public apology?
- I like the idea , but con broadcast is kissing is rear as well;
- Hmm;I see
- Don't you know anybody , who can spread the GOOD Words
- Comes to think about it;I know an editoralist , here in HK who has a worldwide audience.
-He makes jokes, and he is some kind of a rebel .People take him seriously
- THIS is good news;
- Make a public apology in his newspaper .
That will cool down the Medjahs.
Insist that you will not do it again, they will got for it ( anyway , we cannot do it again. We squeezed everybody dry this time)
-What a great idea!
-Thanks
- By the way, would you have any property left?
- Yes, I have a 2 Acres lot for 20.000.000 US Dollars , but you would have to clear the jungle yourself;
-Let me put an option on it. I should receive my bailout money soon
- Great, When you settle in , I have a good scheme we should discuss,better than the subprime;
-Great , but let the fools recover first, so that we can puck them again.

[Uzume]

Nice..really makes my day !! If only I found out about this article earlier :P

[jeffrey kilpatrick]

microsoft apoligiges thart the poor little puppy dog windows xp did not take over my two clone kitty cat at 121212 microsoft relatives his cousins use windows 98 developer and program relative binary on visual basic in two computer but remember the childnren of japan in photographic poetry their sill alive!

[peter wei]

I believe only people who know the yin-yang principles can determine the true or normal gender of a male or female.