Saturday, June 29, 2002

Bloomberg: It's Investors' Fault

By MICHAEL SAUL
Daily News City Hall Bureau

Investors who lost money in the corporate scandals sweeping the nation shouldn't look to Mayor Bloomberg for sympathy.

"People who were buying stocks in the stock market at multiples that never made any sense should look at themselves in the mirror," the mayor said.

"They're as responsible, I think, as those that actually committed the crimes of misstating earnings and fudging the numbers," he said.

The remark, made on Bloomberg's weekly WABC-AM radio show, drew heated criticism from the other side of City Hall.

'Knee-Jerk' Reaction

"That's just like equating a woman who dresses in ways that some might feel is provocative as being just as guilty as a rapist," said City Councilman James Sanders (D-Queens), chairman of the Economic Development Committee.

Sanders called the mayor's remark "unfortunate" and a "knee-jerk" reaction to the corporate scandals. "I'm sure, in his frustration against this great theft of everyday working people by the callous and criminal elite, he overstated his position," Sanders said.

But Ed Skyler, Bloomberg's press secretary, said the mayor "stands by his statement."

"The mayor is asserting his belief that investors have a responsibility to educate themselves about the companies they invest in," Skyler said. "Nobody gets something for nothing. That was the myth of the Internet bubble."

During the radio program, the mayor, the billionaire owner of Bloomberg LP, called the corporate scandals a disgrace.

"If there was fraud committed, I am 100% behind investigations and prosecution and enforcing the law," he said. "People in management have a responsibility to conduct their affairs honorably and legally."

Bloomberg conceded that government "probably hasn't done as much as it could" to protect investors. But "this isn't a government oversight issue," he said.

-- Cherri (whatever@who.cares), June 30, 2002

Answers

Taking responsibility for one's own decisions; what a unique idea.

-- (lars@indy.net), June 30, 2002.

Lars, it is rather difficult for any investor, no matter how their deep pockets or how great their sophistication, to make correct decisions when there is no possibility of their obtaining correct information to work from. Especially when plentiful false information is given to them, certified as the truth by reputable sources.

So, who should be held "personally responsible" for the resulting decisions, Lars -- the maker of the decisions who had no chance of knowing the truth, or the liars who provided the false information?

-- Little Nipper (canis@minor.net), June 30, 2002.

Those who engaged in illegal practices should be convicted and jailed as the law defines. If the law does not define, then new laws are required.

Anyone who buys stocks during a mania without realizing that he is shooting craps is the greater fool.

No one was forced to buy stocks rather than T-Bills. Fear and greed, fear and greed, not even Clinton's regulators can repeal that law of nature.

-- (lars@indy.net), July 01, 2002.

Lars:

No one was forced to buy stocks rather than T-Bills. Fear and greed, fear and greed, not even Clinton's regulators can repeal that law of nature.

As I recall, you are incorrect in, at least, some cases. It was required in certain retirement funds and selling was not an option.

Best Wishes,,,,,

Z

-- Z1X4Y7 (Z1X4Y7@aol.com), July 01, 2002.

Well I think you're right for pension funds. I have no idea where GM invests their pension fund and I'm sure you don't know where your state stashes its pension funds. But in 401Ks, I don't think the individual is obligated to buy anything he doesn't agree to. Right?

-- (lars@indy.net), July 01, 2002.

Lars:

I understand it is only in funds where the employer makes a contribution. Where does my state invest pension funds. I have the list. Wow, the guy who supervises this fund has been under attack from the Republicans in the Leg. for three years. He refused to put much into dot. coms, wouldn't invest in Enron or World.com and other such things. Now, the critics are very quiet. Would you like to guess why? :<)))

Best Wishes,,,,,

Z

-- Z1X4Y7 (Z1X4Y7@aol.com), July 02, 2002.

May 14, 2001, CalPERS invests in start-up ventures.

What next, skimming?

-- (lars@indy.net), July 02, 2002.

The mayor of New York is a bit blunt, but he is correct.

There is so much information available to the average investor today, so due diligence is completely possible to do. I myself have mitigated loses the last few years, and also picked a number of winners. I have kept a very conservative 401K, for a person my age, over the last two years.

There is a general dumbing down of America that is occuring, and the masses are just getting more and more hypnotized by the demands of their life. Lemming-like, they just go with "flow" and in pavlovian fashion do what their neighbor is doing, who is doing what their neighbor is doing etc. My wife sunk a bunch of money into a stock recommended by her father- all of her roll-over 401K actually, and suffered the consequences. Diversifying stocks/bonds is a basic, so basic you can find info about it on cereal boxes, I suppose, so ignoring that admonition is inexcusable.

-- Futureshock (gray@matter.think), July 03, 2002.