The Dumbest Idea In The World: Maximizing Shareholder Value – Forbes

http://www.forbes.com/sites/stevedenning/2011/11/28/maximizing-shareholder-value-the-dumbest-idea-in-the-world/

We all know by now. The markets are rigged. The Game is Fixed.

For years I would ask clients ” How are you going to live when we have a big market crash?”

They would smile, sometimes even patronizingly pat me on the head!

“Barbie, you are the best Long Term Care Insurance person I know. But clearly, you just don’t understand The Markets.”

“Really? You are probably right. Because I see one big hot mess, and you see something else. What am I missing?”

And then the same bombshell answer. Heard hundreds of times before.

“Because, The Markets Always Come Back.”

So here we are today. Our market “comeback” has benefited the 1%. Jobs are scarce. College has skyrocketed 600%. Pensions are gone. Companies are gone. And for many of our middle class, they are living in their cars or on the street.

Many others, have not had a single good nights sleep. Fearing the huge foreclosure sinkhole is going to suck them up as it has their neighbors. The pink slip will be in their envelope, and like their former friends they rarely see anymore, the question won’t be “Where did you want to go eat this Friday night?”

It will be who amongst them can spare a few dollars gas money to go to the food bank. Or who can spare a roll of toilet paper because the unemployment check stopped.

This is a grim reality we face. “Who will be next?”

And still I hear, almost every day, it will be okay. The storm has passed, and guess what “The Market is coming back.”

Now what I am about to say is not going to be pretty, and it is not nice. But it is the Truth. And people deserve the truth.

* All those times you thought the markets came back, it did not. You and most of the world, were lied to. *

I hope the above article only chills you to the bone. I was completely frozen in place by this one fact :

“Return on assets and capital investments are one quarter of what they were in 1965.”

Ok. I will pause a moment as you read that again slowly, and catch your breath.

But wait!! This can’t be true! We lived through those years. We saw with our very own eyes!! We saved, invested, spent real money from our gains and dividends.

Really? I believe Madoff victims did too. Until it ended.

What in the dickens, where did three fourths of the ROA & ROIC go? It doesn’t matter. It just did.

See we have been played like the spouse of an alcoholic gambler. All the calls of being down at the tables but don’t worry we will come back soon, were same.

What we didn’t know, a second mortgage, a third mortgage had funded the previous comebacks. The life insurance policy was cashed in. The car had been sold. And finally, the diamonds you thought were still in your safe deposit box, were now in a pawn shop. With no chance of getting redeemed. Because the family unbeknownst to you had already been tapped.

So as we have been endlessly watching celebrity soap opera politics, the sole breadwinner, Markets, had not only destroyed incomes but assets.

Our soap opera cable TV had said taxes were the big marital dispute in the relationship. With three fourths of ROA and ROIC gone, it is only one quarter left to tax of 1965 levels. So that is rather moot at this point. Same with wages.

This article that explains clearly what we must do is dated 2011. We have lost time.

The jig is up, and the only thing that may be thawing us out is the hot breath of wolves at the door.

So the only question left is, will you print this article and talk to everyone you know? Belly button to belly button? Eye ball to eye ball?
And follow a National unified plan?

Or just move on to the next blog, show, or dinner party? Because it will be all fine. He will come back. He always comes back.

– Barbara Cochlin