Utah repealed the sunshine bill that was passed by an overwhelming majority last year. That bill would have required Wall Street to report to state securities regulators the level of delivery failures, by company.
An unprecedented amount of lobbying went into halting its implementation, right from the get go. First, the SIA lied and said it would support the bill, but only if implementation was delayed until October - originally it was supposed to be July, 2006. Once that was changed and voted in, 27-1, the SIA then filed a lawsuit, and threatened the Governor with pulling businesses from the state. Why all this over a law that simply required Wall Street to open the kimono and allow the state to discover who is doing all the naked short selling in Utah, and what level that naked short selling is actually at?
Because the industry understands that it is a pervasive practice, the exposure of which would collapse the system. Out of one side of its mouth it argues that anyone claiming it is a massive problem is a loon and a kook, and on the other it does the full court press to avoid any exposure of the true level of the problem.
Basically, what happened is that the Senator who advanced the bill got cold feet, no doubt after receiving extraordinary attention from a lobbyist for the SIA. I'm quite sure that a thorough examination of the Senator's business fortunes would show a remarkable increase in his prospects over the last few quarters. A truly remarkable and inexplicable increase.
Be that as it may, this was a victory for the forces that have stalled any meaningful action to protect investors. The bad guys win this round. They were able to buy off an entire state, using a combination of threats and bucks. They convinced a governor that allowing the SEC, the federal regulator recently described by Senators Grassley and Specter as either incompetent or corrupt, to continue to do nothing to protect investors from the massive theft ring that is the delivery failure crisis, is preferable to protecting investors. It sent a clear message to me - just as in the S&L crisis, where whole groups of our elected officials were involved with the worst of the worst guys, and were taking their marching orders from them, now isn't much different.
My solution is to pull my money out of the US stock market. I've already done it. It will never return. And I am not alone. Most of my acquaintances have done so as well.
To continue to support a system that is beyond redemption is stupid. I've watched as the SEC violated every notion of decency and fair play, for years, and ignored its mandate to protect investors - preferring to enable racketeering by the industry it was set up to rein in. It legalized and grandfathered delivery failure on an epic scale, ignoring Congressional requirements for timely delivery in favor of allowing Wall Street to turn on the printing presses and print shares at will, refusing to deliver real ones for years. It sanctioned this theft of our retirement savings, and is running interference for the industry, delaying any reform for as long as humanly possible. The SEC website has hundreds of letters describing the problem and the solution - all ignored, as was the rule that any new regulations receive a public commentary period - Grandfathering never did, as an example. But so what? The rule of law is a sham, and the regs are whatever a few Wall Street cronies in Washington say are the regs. Suck it up, and smile, and keep pissing your retirement savings into this black hole of larceny.
We are constantly told we live in the best country in the world. One of the highest violent crime rates on the planet outside of a war zone, more of its population in prison than virtually anywhere else, with a higher effective tax burden (State, federal, sales, property, gas, energy, estate, etc. etc.) than most industrialized nations, living one on top of each other in wood stick and sheet-rock boxes that cost a million bucks, driving crappy cars that suck gas and break down more than the foreign competition on roads that are dilapidated in spite of mega budgets, with one of the largest drug problems in human history, boasting an education system that is the laughingstock of the globe, where the notion of freedom is celebrated with token lip service while cash is criminalized and tracking chips are put into our drivers licenses and passports, whose population is obese at unprecedented levels and whose health care is the most expensive on the planet while boasting some of the worst levels of service, where virtually everything that feels good is illegal or taxed into oblivion, and which believes that international law and rules of engagement are for everyone else - not us. Why not add that we have the most corrupt, opaque, obviously broken market system to the mix? Most nations in decline have had most of the above, throughout human history. They start out strong, achieve greatness, build empires, and then the human frailties that are immutable characteristics of our species get involved, and the whole thing unravels into inevitable decline.
We are watching it happen as we speak. This is how it looks as it occurs real time. The population becomes subjects rather than citizens, and a small circle of royalty, the military/industrial/financial complex that Eisenhower warned about, runs the country and steals the rest of it blind. Eventually, the decline turns the once proud super-power into the equivalent of Britain, usually during one or two generations. You are watching it live.
Utah wasn't a surprise. At all. One could say it was ordained. That a state would have the temerity to try to protect its companies from a small sliver of predators in NY couldn't possibly stand.
Welcome to the machine.