Yesterday Maria Bartiromo interviewed the CEO of Morgan Stanley on CNBC – mostly about the Facebook IPO. One of the questions was about the people who bought it at the IPO price $38 but who were now down on it. His response was a fair one – those people that bought into the IPO hoping for the quick pop to make money off it were being naive or not buying it for the right reasons. I’m sure he meant they were being greedy day-trading bastards but used naive instead. And he went on to explain you want to see the buyers getting in on IPOs being long-term investors who believe in the long term outlook and value of the company. Which I agree with. I ranted…errr…blogged…about the people whining about their lack of lotto-style riches the Saturday after the IPO.
So now on Friday afternoon Maria plays that clip with his answer and then says something like “he had less than sympathetic words for people taking a bath on Facebook.”
Every time I listen to CNBC’s American Greed on my drive home I can’t help but be just as annoyed and irritated with the “victims” as with the criminals.
I’m not saying the thieves were right. I’m not saying it doesn’t suck to have your money stolen. BUT, the bulk of these people were clearly quite lucky to ever have come in contact with the money they lost to begin with.
As an example, tonight’s victims were of to a guy who offered (phony) bridge loans. He lived in Hawaii and convinced people that he barely knew to loan him tons of money to supposedly make bridge loans. And of course, you got tons of interest on the money you lent him to do this. But then you didn’t. And then your money was gone. 1 woman said she took out 3 high-interest mortgages on her home on Kauai to loan/invest with him.
So then this guy declares bankruptcy in Hawaii and is being investigated by the FBI. So he leaves his $4 million mansion and moves to Seattle and is living in a rented single room. And gets a job at a mortgage broker. Of course. Then he convinces another guy renting a room in the same place to give him his kid’s college fund ($30k) to “invest” in bridge loans. And apparently more people, to the tune of hundreds of thousands of dollars, also invest with him. Just in Seattle. Many millions in Hawaii. And just while he has been in Seattle for a short time. And living in a rented room while working at a mortgage broker office. Clearly a trusted investment professional.
The woman from Kauai, the one who took out 3 mortgages on her home, and was forced to sell her home and move in with family in Maine, had the nerve to say “This could happen to anyone. I am an educated woman.” No. No, you can be 100% sure it would not happen to me. You thought you were getting a quick and easy way to money that you didn’t actually have to work for. Be honest. Great if it can happen but winning double 00s in Vegas is fun too. But you can’t blame anyone when you go bust. So not much sympathy coming from over here.
Watching CNBC this morning and they start talking about a company/stock – HK. It’s a US gas/oil exploration company (I only knew that by searching for them.) The stock was up $0.33 on the day as they talked about it and I was looking at what the heck they do. Sure enough, starts jumping up and up once they were done to + $0.75 (this isn’t AAPL, it’s a $10 stock so that’s a decent jump.) Made me laugh to see that happen…again.
When I worked at a hedge fund and sat right outside the trading room, I would listen to CNBC all day. This was during the internet stock craziness and it was pretty much 100% guaranteed the minute CNBC mentioned a stock, the sucker would launch. I had access to instant execution on trades so I would buy and sell small lots in my account. This is basically how I paid for my wedding/Hawaii elopement & reception. That and some options trading.
I remember calling a friend and asking if she wanted me to trade her account on a stock I was getting into that day AS they were talking about it on CNBC. She was stressed but did it. We both had a great day. She went into trading soon after that and ended up being a trader for a fund. She just left that to work on a stock newsletter. Good times. The stories she and I have about our old jobs would put the Nanny Diaries & Devil Wears Prada to shame. But we’ll never tell :)
Good to see the CNBC effect is still in place. The sheep are still there and you can profit from it (just like in ZNGA!)
It’s pretty gross that Congress takes a month off (yeah, yeah they are going to visit their constituents. Uh-huh.) The President (and God knows how big of an entourage) is going to Martha’s Vineyard. The EU leaders (as well as most workers in EU) get all of August off as well. At least the British Prime Minister acted like a leader and came back to deal with the scum-sucking, pieces of crap rioters who all should just be shot and dealt with that way.
But no. The average American is lucky to get to Disneyland for the weekend or take a few days off to spend with their kids on their summer vacations from the pathetic institution of public schools. But our leaders get to take the summer off while our markets tumble, our economy continues to falter, we have high unemployment and we continue to fight wars in Afghanistan and Libya (this has been a long few days for our troops helping the UN there.)
But right…I forgot. This is all George Bush’s fault. Or the fat cats on Wall Street. Or the private jet owners. Finger-pointing = done. Time to hit the beach….