Comments on: The Greatest Deception in the History of Finance http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 23:28:32 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Collection of best personal finance posts http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239854 Collection of best personal finance posts Mon, 07 Dec 2009 04:18:41 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239854 [...] The Greatest Deception in the History of Finance from The Big Picture This post takes what everybody is in search of and asks if it’s just a marketing scheme.  Okay I simplified it a bit.  I guess you’ll have to read to make up your own mind. [...] [...] The Greatest Deception in the History of Finance from The Big Picture This post takes what everybody is in search of and asks if it’s just a marketing scheme.  Okay I simplified it a bit.  I guess you’ll have to read to make up your own mind. [...]

]]> By: Evelyn_S http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239641 Evelyn_S Sat, 05 Dec 2009 22:28:57 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239641 As long as I can remember, I've been aware of the compromises between time "well spent" and the need for money to survive. My mother struggled to support her family, complained bitterly about the boring computer work she did, and went in to debt so we cold have necessities. She looked forward to retirement so she could finally do the creative things she wanted to. In my late teens, I very consciously decided to trade in my own sexuality rather than endure the much lower-paying indignities of serving food to people. My fears of becoming a street person or "bag lady" never really went away. I wanted to be an artist or a musician but --- I became an entrepreneur, and worked hard in small businesses most of my life. They allowed me to build up some equity and avoid debt, which I abhor. I own my house debt-free. However, "made in USA" became obsolescent: my 20-year-old business failed and I lost my source of income. I patented an idea and had my invention made in China. The years it took to make this dream come true put my product's debut in the teeth of the 2008 recession, and my business our of all reach of consideration for venture capital. It creates work but no revenue. I saved enough money to live on for a while, but that's finite. I don't have any health insurance. I don't go to doctors or get dental checkups, as I'm trying to live on $20,000 a year until I'm old enough to get a reverse mortgage. This arrangement is very fragile. (Take a look at that Elizabeth Warren article about the vanishing US middle class!) My little dog just needed over $3,000 worth of medical care. I'm in shock, but I paid. I cry a lot because it has dawned on me that my ability to support companion animals is now limited such that I'm inhibited from adopting animals as I never used to be before. My life has gone through an arc from poor to wealthy and successful to falling back down the other side of the curve. Philosophy? "Call no man successful until he is dead" because while you're still alive you can be blindsided by life's nasty little surprises and find yourself among the humble. --- Big swindle? The massive dilution of "worked for it" (value-related) money with "gambling debt derivatives bubble" valueless money. As long as I can remember, I’ve been aware of the compromises between time “well spent” and the need for money to survive. My mother struggled to support her family, complained bitterly about the boring computer work she did, and went in to debt so we cold have necessities. She looked forward to retirement so she could finally do the creative things she wanted to.

In my late teens, I very consciously decided to trade in my own sexuality rather than endure the much lower-paying indignities of serving food to people.

My fears of becoming a street person or “bag lady” never really went away. I wanted to be an artist or a musician but —

I became an entrepreneur, and worked hard in small businesses most of my life. They allowed me to build up some equity and avoid debt, which I abhor. I own my house debt-free.

However, “made in USA” became obsolescent: my 20-year-old business failed and I lost my source of income.

I patented an idea and had my invention made in China. The years it took to make this dream come true put my product’s debut in the teeth of the 2008 recession, and my business our of all reach of consideration for venture capital. It creates work but no revenue.

I saved enough money to live on for a while, but that’s finite. I don’t have any health insurance. I don’t go to doctors or get dental checkups, as I’m trying to live on $20,000 a year until I’m old enough to get a reverse mortgage.

This arrangement is very fragile. (Take a look at that Elizabeth Warren article about the vanishing US middle class!) My little dog just needed over $3,000 worth of medical care. I’m in shock, but I paid. I cry a lot because it has dawned on me that my ability to support companion animals is now limited such that I’m inhibited from adopting animals as I never used to be before.

My life has gone through an arc from poor to wealthy and successful to falling back down the other side of the curve.

Philosophy? “Call no man successful until he is dead” because while you’re still alive you can be blindsided by life’s nasty little surprises and find yourself among the humble.

—

Big swindle? The massive dilution of “worked for it” (value-related) money with “gambling debt derivatives bubble” valueless money.

]]> By: Forever_Young_ http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239541 Forever_Young_ Sat, 05 Dec 2009 11:16:36 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239541 Thanks for a lovely article supplemented by all those who commented – all with much of value to add to a complicated subject – especially those of DiggidyDan who puts a lot more perspective on the difficulties of having ‘enough’. Most of us are born and indoctrinated onto the treadmill – ‘born in chains’ - so to gain financial freedom means to be first and foremost one of those rare birds – a philosopher – a questioner of the status quo. And then to question the system we have been indoctrinated into means in essence that we have for whatever reason become disillusioned with it – a Richard Branson or a Tiger Woods for example would in all likelihood never have the need or even desire to debate the issue of ‘financial freedom’. And then we need to have the time to question and the means to do something about it – as Marx said - ‘it is our material circumstances that dictate our consciousness’ – also - ‘from each according to his ability, to each according to his needs’. And, importantly, lets not forget the equation - Money = Power which is probably the single most powerful drive of all (Nietzsche) possibly even above that of sex (Freud). Our drive for power is determined during our infancy so those to whom power is an issue will find it extremely difficult if not impossible to overcome. So we have to take into account the fact that while some have ‘enough’ the vast majority don’t and those who do might stick out and dare to be ‘different’ which in days gone by was a curse that could mean isolation from the community and thus even death. To put it bluntly - those who have ‘enough’ swim against the tide and to do so by choice requires a very strong constitution. I’m reminded of a joke about an entrepreneur who visited an African village that was surrounded by fertile land which lay fallow even as the village men slept under a tree in the shade. So he approached them and asked them why they lay under the tree when they could be working the land and the men said ‘what for – we have sufficient food from the wild that we can eat’. ‘Ah’ said the entrepreneur ‘you are missing the point – if you farmed the land you could grow a surplus which you could sell for a profit’. ‘And what would we do with the profit?’ asked the men and the entrepreneur explained to them how they could build up a big agribusiness company exporting food all over the world in order to accumulate a huge fortune’. ‘And what we would we do when we had all this money’ asked the men to which the entrepreneur replied - ‘then you could lie in the shade all day’. Thanks for a lovely article supplemented by all those who commented – all with much of value to add to a complicated subject – especially those of DiggidyDan who puts a lot more perspective on the difficulties of having ‘enough’.
Most of us are born and indoctrinated onto the treadmill – ‘born in chains’ – so to gain financial freedom means to be first and foremost one of those rare birds – a philosopher – a questioner of the status quo. And then to question the system we have been indoctrinated into means in essence that we have for whatever reason become disillusioned with it – a Richard Branson or a Tiger Woods for example would in all likelihood never have the need or even desire to debate the issue of ‘financial freedom’. And then we need to have the time to question and the means to do something about it – as Marx said – ‘it is our material circumstances that dictate our consciousness’ – also – ‘from each according to his ability, to each according to his needs’.
And, importantly, lets not forget the equation – Money = Power which is probably the single most powerful drive of all (Nietzsche) possibly even above that of sex (Freud). Our drive for power is determined during our infancy so those to whom power is an issue will find it extremely difficult if not impossible to overcome.
So we have to take into account the fact that while some have ‘enough’ the vast majority don’t and those who do might stick out and dare to be ‘different’ which in days gone by was a curse that could mean isolation from the community and thus even death. To put it bluntly – those who have ‘enough’ swim against the tide and to do so by choice requires a very strong constitution.
I’m reminded of a joke about an entrepreneur who visited an African village that was surrounded by fertile land which lay fallow even as the village men slept under a tree in the shade. So he approached them and asked them why they lay under the tree when they could be working the land and the men said ‘what for – we have sufficient food from the wild that we can eat’. ‘Ah’ said the entrepreneur ‘you are missing the point – if you farmed the land you could grow a surplus which you could sell for a profit’. ‘And what would we do with the profit?’ asked the men and the entrepreneur explained to them how they could build up a big agribusiness company exporting food all over the world in order to accumulate a huge fortune’. ‘And what we would we do when we had all this money’ asked the men to which the entrepreneur replied – ‘then you could lie in the shade all day’.

]]> By: Uncle Billy Cunctator http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239311 Uncle Billy Cunctator Fri, 04 Dec 2009 11:53:53 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239311 Bergsten? This Bergsten? http://en.wikipedia.org/wiki/C._Fred_Bergsten Bergsten? This Bergsten?

http://en.wikipedia.org/wiki/C._Fred_Bergsten

]]> By: Links 12/4/09 « naked capitalism http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239306 Links 12/4/09 « naked capitalism Fri, 04 Dec 2009 10:47:56 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239306 [...] The Greatest Deception in the History of Finance Ken Thune (hat tip reader Doug) [...] [...] The Greatest Deception in the History of Finance Ken Thune (hat tip reader Doug) [...]

]]> By: DiggidyDan http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239283 DiggidyDan Fri, 04 Dec 2009 04:40:18 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239283 http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html http://www.huffingtonpost.com/elizabeth-warren/america-without-a-middle_b_377829.html

]]> By: Sunny129 http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239191 Sunny129 Thu, 03 Dec 2009 22:38:11 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239191 There is definitely ENOUGH between NEEDS and WANTS! Each of us have to find our own 'Enough' to lead a content and happy existence. There is definitely ENOUGH between NEEDS and WANTS! Each of us have to find our own ‘Enough’ to lead a content and happy existence.

]]> By: Thursday links: spread shrinkage Abnormal Returns http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239112 Thursday links: spread shrinkage Abnormal Returns Thu, 03 Dec 2009 17:47:17 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239112 [...] Kent Thune, “To conclude, there is no such thing as financial freedom, at least not in the conventional sense of the term, which is the great deception.”  (Big Picture) [...] [...] Kent Thune, “To conclude, there is no such thing as financial freedom, at least not in the conventional sense of the term, which is the great deception.”  (Big Picture) [...]

]]> By: Jib http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239063 Jib Thu, 03 Dec 2009 14:59:24 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239063 Thanks for the post, Kent. Awareness of the corrosive effects of materialism and the elusiveness of a satisfied life in pursuit of abstract wealth is an important lesson. However, few people I know actually pursue wealth for wealth’s sake; they are more concerned with being able to get by and create a safety net for the people they care about. As Kanye West said, “Money isn’t everything, not having it is.” “Financial freedom” to me would be having enough money to provide for food and safe shelter, a solid education for my children, and sufficient cash to cover myself and my family members in cases of severe medical problems. Judging by the costs of cancer treatments, surgeries, houses in safe neighborhoods, and college expenses nowadays that amount sadly goes well into the millions of dollars. Granted people can and do get by without these assurances, but the uncertainty of not knowing how one is going to provide for one’s family and protect against these hardships is unpleasant. Surely the satisfaction of knowing these needs are met raises the happiness in one’s life. Thanks for the post, Kent. Awareness of the corrosive effects of materialism and the elusiveness of a satisfied life in pursuit of abstract wealth is an important lesson. However, few people I know actually pursue wealth for wealth’s sake; they are more concerned with being able to get by and create a safety net for the people they care about.

As Kanye West said, “Money isn’t everything, not having it is.”

“Financial freedom” to me would be having enough money to provide for food and safe shelter, a solid education for my children, and sufficient cash to cover myself and my family members in cases of severe medical problems. Judging by the costs of cancer treatments, surgeries, houses in safe neighborhoods, and college expenses nowadays that amount sadly goes well into the millions of dollars. Granted people can and do get by without these assurances, but the uncertainty of not knowing how one is going to provide for one’s family and protect against these hardships is unpleasant. Surely the satisfaction of knowing these needs are met raises the happiness in one’s life.

]]> By: Kent @ The Financial Philosopher http://www.ritholtz.com/blog/2009/12/the-greatest-deception-in-the-history-of-finance/comment-page-1/#comment-239027 Kent @ The Financial Philosopher Thu, 03 Dec 2009 13:31:00 +0000 http://www.ritholtz.com/blog/?p=45182#comment-239027 @ TakBak04: Thanks for the generous compliment! Certainly knowing what is "enough" is key. @ rod_kane@hotmail.com: I'm sorry for the loss of your mother but her parting wisdom, "it’s more important to do things you want than to have things," is priceless. Your comment is a blog post in itself. @ jaysan: Your self-described "addiction to trading the stock market and to reading internet news and blogs" may not be quite the problem you imply because you are aware of it. Also, your study of Buddhism and meditation likely balances everything! You seem to have, what I would call, a good balance of brain and mind. @ bergsten: I appreciate your kind words and for adding my blog to your "list." Barry has kindly left a door open for me to write here at TBP so you'll also see me here a few times per month. I look forward to hearing from you at The Financial Philosopher. Cheers... @ TerryC: Certainly, civilization has a price. Everything has an ideal balance. Personally, I think a little less "civilization" than we have in Western societies might be closer to this balance. There is no escaping paper money but there is opportunity to escape much its conventional use. @ DiggidyDan: Yes, we are more alike philosophically than not. The time you took to make comments "in the dark" is a compliment in itself! I also like Taoism, especially the principles of humility and passivity. I look forward to future "conversations" with you. In the mean time, here are a few of my favorites from Tao Te Ching (Lau Tzu): "There is no calamity greater than lavish desires. There is no greater guilt than discontent. And there is no greater disaster than greed." "Health is the greatest possession. Contentment is the greatest treasure. Confidence is the greatest friend. Non-being is the greatest joy." @mknowles: I haven't killed my TV but I don't have cable and I don't subscribe to any periodicals! Thanks for the comment... @ TakBak04: Thanks for the generous compliment! Certainly knowing what is “enough” is key.

@ rod_kane@hotmail.com: I’m sorry for the loss of your mother but her parting wisdom, “it’s more important to do things you want than to have things,” is priceless. Your comment is a blog post in itself.

@ jaysan: Your self-described “addiction to trading the stock market and to reading internet news and blogs” may not be quite the problem you imply because you are aware of it. Also, your study of Buddhism and meditation likely balances everything! You seem to have, what I would call, a good balance of brain and mind.

@ bergsten: I appreciate your kind words and for adding my blog to your “list.” Barry has kindly left a door open for me to write here at TBP so you’ll also see me here a few times per month. I look forward to hearing from you at The Financial Philosopher. Cheers…

@ TerryC: Certainly, civilization has a price. Everything has an ideal balance. Personally, I think a little less “civilization” than we have in Western societies might be closer to this balance. There is no escaping paper money but there is opportunity to escape much its conventional use.

@ DiggidyDan: Yes, we are more alike philosophically than not. The time you took to make comments “in the dark” is a compliment in itself! I also like Taoism, especially the principles of humility and passivity. I look forward to future “conversations” with you. In the mean time, here are a few of my favorites from Tao Te Ching (Lau Tzu):

“There is no calamity greater than lavish desires. There is no greater guilt than discontent. And there is no greater disaster than greed.”

“Health is the greatest possession. Contentment is the greatest treasure. Confidence is the greatest friend. Non-being is the greatest joy.”

@mknowles: I haven’t killed my TV but I don’t have cable and I don’t subscribe to any periodicals! Thanks for the comment…

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