by teenyuck 19 Replies latest jw friends
I personally lost my 401k and about $15,000 in stock purchases.
You think you feel bad, puffs', beginning at birth, my parents invested 27 years of my life in the WTBTS.
Unless, of course, the same thing happened to you while losing your 401k and the 15 Grand.
Flip
You are right, most Enron employess knew the stcok was going down long before the lock down. Yet many not onlyheld on but bought stock. This was brought out on the Today show this moring.
I also had a friend who invested his life savings into Lucnet. He loved it when it was riding high. He did not do his own reseach and lost most of his life savings when it came down. Then he complained aobut how he did not only sell, but did not difersify.
No one personwhould put thier life savings into company stock, most offer choices of differnt styles of risk for investor.
We all should have one investment which will give us enternal rewards:
We should Belive in Jesus. Unlike Enron, stck or anything monetary inlife ourt Fatih in Jesus will not go unrewarded. It may seem so at the moment, but in the end he does not forget.
So make sure you have an investment in your eternal future today. If you don't you will be the only one to blame for where you will wind up.
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Enron Venture Capitalism -
You have two cows.
You sell three of them to your publicly listed company using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows with an option on one more.
Julie-
Was Lucent as misleading as Enron had been? Did Lucent hide the sort of debt that Enron did? Did Lucent have the long-term, high powered connections that Enron did? What's the scoop here?Yes, Lucent was as misleading...however they had assests to sell to cover their mess up...that is why their stock plummeted...they had to go back and report earnings. Same way Enron did. The key is assets. Which they have sold off to pay debts. Enron could not. Trading contracts are worthless.
Yes, Lucent had major debt that they hid. The accounting term is "Proforma" accounting. When it caught up with Lucent, they to sell assets and lay people off to get cash and cut expenses. That is why the stock tanked. The key is the assets Lucent had.
Yes, Lucent had long-term, high powered connections. The CEO was at the White House a few times (Clinton Era). His job was to tell people how well the company was doing, when in fact, he and his other cohorts (all since fired) were litterally 'cooking the books.' Lucent used a method of financial reporting called "Proforma." They can have numerous debts, however, because of this tweaking of the spreadsheet, they can leave those off the reports to shareholders. Lucent got caught with their pants down.
The similarities between Enron and Lucent are startling. The onlyreason Lucent honchos were not in front of a congressional panel is that they had many holdings and could sell those off in an effort to not declare bankruptcy. Enron was a trading company...the only assests they have are the office furniture and any real estate. Lucent found cash to pay off debts similar to Enron's accounting mess.
Lucent was THE company of the mid to late 90's. I watch CNBC every morning. The talk on Lucent was that they were the "goose with the golden egg." In 1997 they spoke of making them a component of the DOW 30..those are the 30 stocks that make up the "Dow Industrial Average." This average is a major component of US financial health.
Lucent was a spin off from AT & T. As a result, they became a company with about 130,000 employees, in 1996. Their headquarters are in New Jersey. They owned real estate and plants to manufacture (based upon old AT & T management style). They had lobbyist's whose only function was to contribute to politicians and ensure that their slice of the pie was not hurt by laws. They were based in Washington DC specifically to lobby. Just like Enron. They got invites to the White House (Clinton Era) and did all the schmoozing that lobbyist's are supposed to do. They distributed money to politicians.
The AT & T connection cannot be stressed enough. AT & T was hugh, still is, however, once they sold off the manufacturing arm of the company (Lucent Technologies) they started to slag...Lucent owns Bell Labs. Bell Labs is responsible for creating the transisitor. They are some of the most highly regarded engineeers and scientists in the world. The connections of a company the size of AT &T, Lucent or Enron are not happenstance. They are calculated. They know whose plams to grease to keep the laws favorable to their particular industry.
Lucent's board of directors and CEO, Presidents, etc, all came from AT & T. They knew who to call and when to call to get favorable ratings. They had been doing it alot longer than Enron.
Rich McGinn, the former CEO, walked away with a wonderful package. Millions of dollars and more stock options. The employess were happy when he left, however, they lost much more-based upon his glowing reports of Lucent good health. Because Lucent had assets, they managed to not file bankruptcy.
As late at this past fall, Lucent's bonds are at junk status. That is bad. They had to beg, plead and promise to lay off more employees to cut expenses, in order to get loans to pay short term debt. They are still shaky.
This was in the news in 2000. There were many prime time news stories of Lucent. The news organizations covered them like rabid dogs. However, because no bankruptcy, there was no titilation factor. On the financial news channels CNNfn and CNBC, they continue to cover and discuss Lucent's ill health.
My point of starting this thread was:
We are responsible for our actions. No one made those Enron employees put their life savings into one plan. That was their choice.
We, the tax payers of America, should not give them financial relief. I am very sorry for them, however, I still have friends at Lucent and they are in their 50's and 60's with no retirement plan now. The Lucent and Enron debacles are proof that diversification in your retirement plan is critical. There are many, many companies whose finacial health went down the tubes in the last few years. That does not mean people at a failing company should be bailed out by others.
As nowaytess noted, no one should put their life savings into one company stock....diversify, diversify, diversify.
Edited for typos
I know for some of you who have spent your lives as JW's the following advice on how to invest your life's savings will be foreign:
DIVERSIFICATION!
ALL employees who are invested in 401k's and other at work investment vehicles should diversify their portfolios. There is NO excuse for having all of your invested assets in your companies stock. NO EXCUSE.
This pity for Enron employees who mismanaged their savings portfolios reminds me of the junk bond hearings in the late 80's and early 90's where elderly people went before congress whining and crying that they go burned on junk bonds. Not a single person or congressman said, "well, did you notice that they are called "JUNK BONDS"? We have a silly assed society that believes the government should somehow protect us from and compensate us for our stupidity.
As I mentioned some weeks back, Enron is just the first wave of what is to come. The dominoes have already begun to fall in classic chain reaction style. The questions regarding who at Enron stole what is completely irrelevant. It is a systemic crisis and not something isolated to one or two companies' accounting irregularities.
Here's how it works: In its rawest form, the capitalist system works off of two alternating principles of fear and greed. The market manipulators know human psychology well. They know that when people are continually exposed to stories of investors becoming fabulously wealthy by playing the lotto or the stock market, or whatever, that eventually a majority of people are going to be gripped with greed and induced to jump in the game with both feet. And coupled with the massive Wall Street "buy and hold" brainwashing, it virtually guaranttees the house that the suckers will not leave the table until they have been completely wiped out. Then, when the game has run its course, the original players quietly slip out to protect their own assets; afterwards inducing a fear-inspired stampede off the cliff, after which the manipulators come back in and pick up the bargains.
That's the way fortunes were made in the last Great Depression, and the potential is certainly there for history to repeat itself yet again. Only this time, due to globalism, the stakes are vastly greater. The world is literally up for graps and most people are too stupid to see the snare that has been prepared with them in mind. When the defacto world's currency, the dollar, breaks, as it is now poised to do, millions of people are going to get stuck with paper, in the form of dollars, bonds, stock certificates, and treasury notes, that will be as worthless as confetti. It is the perfect way for a world that has become completely dominated by lovers of money to get what they are really owed.
The looming catastrophe has the potential to repeat a scenario that arose in Egypt during the time of Joseph, when everyone in the nation had to sell everything they had to Pharoah just to keep alive. There's no question but that ridiculers are going to be forced to dine on dung pie in the very near future. The table is already set. / You Know
Oops…YK, my favorite contrarian indicator…time to watch when to sell rising gold stocks that have been considered worthless the last couple of years and pick up blue chips at bargain basement prices.
I can only wonder how the WTBTS financial planners are investing their portfolios.
Flip
Tahks Julie,
Now younger workers are today more savvy aobut how stocks works. So younger peiople who not even save towards retirement when given the oppurtunity to will be down right stupid.
The greatest paln by the Goverment ever done is for those who will be entiled to Social Security a statement every year if you were to retire today this is how much you will get.
I lived of SS for 10 years being disabled. No way I am not invsesting towards my retirement. That is why I seek out wise financial advice.
Beside our 401k we have personal savings outside of it. Yes a safe investment my hubby and I put into every week.
I don't think the Goverment should be bailing these guys out or else they have to bail out all Companies who went bankrupt with employee 401Ks.
Folks I will quote Rush limbaugh on his show today, "In the history of the world can you find where the peiople are happy when the Goverment supplies all thier needs?"
<A HREF= http://clubs.yahoo.com/clubs/christianexjehovahswitnesses </A>
You know:
When the defacto world's currency, the dollar, breaks, as it is now poised to do, millions of people are going to get stuck with paper, in the form of dollars, bonds, stock certificates, and treasury notes, that will be as worthless as confetti...
The paradox is, YK:
Bonds and treasury notes get bought the more they tend to get worthless. Because they bring better RENTS the more they get worthless. A type of idiotic pyramide-game: see Argentina bond-market.
I think in some opinions you have it right, YK. The more the economy tends to "virtual business" (as a result of exhaustion of patentable inventions and genuine new ideas) the higher the risk to crash. the "big economy crash" cannot be avoided anymore. It is my true conviction.
You know:
When the defacto world's currency, the dollar, breaks,...
US-Dollar will be THE VERY LAST currency which is going to break !
Before the US-$ breaks, all other currencies world-wide - mainly the EURO - come into greatest troubles and declines!
