The Honest Truth - Is Wall Street a role model for Al-Qaeda?

[ALBERT PINTO]

The Honest Truth is authored by Ajit Dayal.
I tossed this comment at friends of mine who work for Wall Street or know people who work at Wall Street firms.
And they kind of gave me a strange look.
One of those, "and which planet are you from" looks.

But hear me out.
Osama bin Laden is probably one of the most recognised names around.

If he were classified as a "brand" it would be interesting to know whether management consultants would estimate the value of his brand or product ("terror") to be higher or lower than those of well known multinational companies.

Maybe the rating agencies like S&P and Moody's, so intent on making their clients happy - and now a subject of investigation by the US and European governments - would have another client to lap up to.
Maybe they would rate Al-Qaeda as "TNT" - the gold standard for terror.

But getting back to my comment, as the founder of Al-Qaeda, Osama must have made a choice on how he should build his warped empire. How could he institutionalise terror so that it lasts way after his meeting with God is arranged by the US military generals?

Not being a graduate of any of the well known business schools that seem to excel in churning out students whose sole aim seems to be to blow up the world (economically and financially, that is), Osama probably had to build his organisation based on what he saw in the real world.
However unreal his definition of the "real" world may be.

He ain't lovin' it
McDonald's offers a pretty good blueprint for setting up a successful empire globally. With over 32,000 restaurants in more than 100 countries, McDonald's is a management success that has lasted way beyond the death of its original founder, Ray Kroc.

But to build a McDonald's kind of fan following, you need to get kids to really like you. And you need to have an aura around your products that convinces parents to take their kids to a McDonald's.
While Al-Qaeda does get the odd child to do odd suicide bombing missions, it is not really perceived to be a popular group to hang around with.
Mothers don't seem excited about enrolling their kids to Al-Qaeda.

The other problem with a McDonald's type organisation structure is that you need to have a very strict rule book. And a no-room-for-error recipe book. A helping of French Fries bought in New York has to taste the same as the helping of French Fries bought in London. No room for any improvisations.

Now, much as Al Qaeda would like to have a cookie cutter approach to terrorism, they really cannot do that. An attack on innocents in New York need not be the same as an attack on innocents in London. The level of police control, the movement of the crowds, and the location of the soft targets all call for improvisation. No manuals used here.

Furthermore, McDonald's has a mascot: a very likeable colourful clown.
The Al-Qaeda rule book does not favour wild colours or a face that is always smiling. Terrorists look grim. They wear drab greys and black.

It is true that sometimes the terrorists evolve into respected political leaders and wear a Pizza Hut napkin on their heads - but that is usually much later in life. Probably closer to their IPO and to their listing on the UN as a respected Head of State. Just like the PSU companies suddenly have this aura about them when they do their IPO's. Anyone remember the "navratnas"? Last time I checked, many of them had been used as fodder to enrich the private sector barons.

No, though McDonald's is a growing success and can proudly claim that 80% of the 32,000 restaurants are owned by franchisees - a sure sign of lasting power beyond the lifetime of the founder - it probably did not make the cut to be the role model for Al-Qaeda.

And nor did the pharmaceutical industry.
Though their global reach and control over governments is legendary, they do get into trouble. Witness the rash of fines that the US and European governments are slapping on companies like Pfizer. While paying fines per se is not a problem - it can be classified as a cost of doing business and deducted from taxes payable - there is the issue of a formula and recipe again.

Every bottle and drug needs to have the same impact on the patient.
Al-Qaeda cannot guarantee that the impact on all intending victims will be identical. Not that Johnson & Johnson could guarantee the safety and efficacy of the children's version of Tylenol. J&J is now in trouble for allowing some junk into the children's version of Tylenol at some of its plants.

And though the pharmaceutical industry does get volunteers for its various medical research tests, those tend to be regulated.
No one regulates Al-Qaeda when it laces underwear with gunpowder for use by mature adults.

If you have to cause obesity and distort bodies or maim some internal organs, why go through such strict processes and production manuals?
Nope, Al-Qaeda is not in the slow-death business.
High impact and high velocity algorithms work better for disaster scenarios - as the plunge on Wall Street's computer-led trading mechanisms proved.

Maybe the Wall Street model?
So having discarded the McDonald's and Pfizer models, they probably researched Wall Street.

There is something solid about the financial services industry. Not only has it positioned itself as a "pillar of society" but it is seen to be an alternative form of government.
Almost a religion.
That must have impressed Al-Qaeda.
Every morning, like clockwork, someone rings the bell of some stock exchange somewhere in the world.
And the flock come to pay homage.
More than 5 times a day. In fact, every millisecond.
One up on you, Osama!

There is also a personality fit. The people in the financial services business wear grey and drab coloured clothes most of the time. And they rarely smile. They also get photographed with their hands crossed or leaning on a window. Much as a member of Al-Qaeda would be photographed with a hapless victim, with sword in hand. There is that feeling of "Master of the Universe" that leaps right out at you.

And mothers want their children to be a part of the tribe.
Yes, you heard that right. Give the mother a chance to be on Oprah or a chance to see her son on Wall Street and Oprah will be out of business.
Of course, once her son makes it to Wall Street, he will issue a CDO to Oprah's company, get her into financial trouble and ensure that Mother makes it to Oprah to talk about how her son made it to Wall Street.

With a Compulsory Debut on Oprah (the other CDO) on their minds, it is rumoured that parents in America start training their children from birth to get into a private school, then to the fine campuses of Harvard or Yale, and finally to Wall Street.

Sure, the mothers will feed them French Fries from McDonald's along the way, but they want their children to grow up owning the damn company. Summer jobs at McDonald's are for the offspring of their nannies who help groom their knights in shining armour.

While barbarians and savages to the core when it comes to money, the typical Wall Street employee has learnt one instrument (drums, guitar, piano), can speak many languages (English, French, German, Latin, Spanish), and can work long hours in solitary conditions with cold pizza for comfort.

The financial services industry can attract the best and the brightest - even the governments know that. Just like the army knows that the terrorists employ gruesome tactics that would not stand in a court of law or be supported by public opinion. It is a war of unequal armies, each playing by a different set of rules.

The regulators of the financial service industry know that the tactics employed by the wily folks on Wall Street would sway most judges into believing in their innocence. The severest penalty will be a fine - normally equal to a few days of loot.

Yes, there are trials and there are public humiliations. But the allegiance to the cause is so strong, that these are seen as mere mortal acts of martyrdom in the race to the Great House on the Beach.

When the financial geniuses need something done, they transfer a few of their brethren to the government for some time till their work is done. Once policies are changed to ensure their fraudulent ways continue, the brethren are welcomed back to the fold to enjoy their riches. When a government employee - including Presidents and Prime Ministers - have done good work for the industry, they are invited to join the Boards of the powerful and the sacred.

A coalition of the willing
Poor George Bush - when he was enlisting support for the Great War, he thought he had coined a new phrase "the coalition of the willing". Osama beat him to it - thanks to the inspiration from Wall Street.

The organisation structure is ideal for Osama. The Wall Street firms are in every aspect of the financial services business. They are loose franchises within an overall organisation umbrella. For example, if they wish to be in the foreign exchange trading business, they will employ a team of people and ensure them a minimum salary, allow them to use the name of the master franchise company, generate business, and take a share of profit.

In addition to growth by business function, they can grow by geographical expansion. Just as Al Qaeda breathes awe in new countries that it enters, the arrival of a Wall Street firm in a new country is treated with awe and wonder. The blessed mothers of infants line up to sign on their every-borns to the tribe.

How the Wall Street firms generate the business is not an issue. This is also attractive to Osama and fits in well with his chaos and blood theory.

There is no McDonald's recipe for profit in a Wall Street firm. No, sir, just take it in any way that you can get it.
As a Vice Chairman of a large Wall Street firm confessed, "we have grown so big that we cannot know what is happening in another part of the organisation".
That is not a confession of a sinner - but the confession of a proud man showing off his swash-buckling enterprise.

And if someone is caught with his hand in the client's pocket, they cut him off - with a nice severance pay package, of course. The rest of the franchises remain intact.
There is no hierarchy at risk here.

McDonald's will be shut down if they sold dog meat disguised as beef because the folks at the top would have known. The pharmaceutical companies have a similar problem. But Wall Street firms are a collection of many independent cells, many independent franchises. Whatever the cell does at the franchise level only puts at risk some of those in that cell. The master franchise owner shrugs it off with a fine.

In 1999, during the height of the tech bubble equity research analysts with some of the most respected Wall Street firms told the public that internet stocks were great investments. Internal emails revealed that these same equity research analysts actually felt those stocks were a piece of junk. They lied so that they could get the investment banking fees. And admission for their children into good schools so that the children, too, could make it to Wall Street.
No senior heads rolled.
No shut down of the firm.

In 2002 and 2003, many Wall Street firms in the distribution business made their clients buy mutual funds not because it was good for the client, but because the mutual funds agreed to pay undisclosed distribution fees. Once caught, they paid a fine.
No senior heads rolled.
No shut down of the firm.

More recently, the Wall Street firms have been accused of selling junk mortgage loans as investment grade, safe investments. The debt cells got away with murder. The credit rating agencies helped them plan the murder and gave them the alibi. No senior heads rolled. No shut down of the firm. In fact, they made record bonuses.

The multi-cell structure is also convenient.
If the government shuts down one fraud operation, they discover a new way to do the same old thing.
If they shut down the branch in Indonesia, start one in Yemen.
If they get to Afghanistan, kick-start Sudan.

If you can't blow the plane anymore, send a truck to blow a bridge.
The cops and the regulators are still busy trying to catch the plane folks.

As Wall Street knows, "regulators are way behind the curve". Or, to put it another way, Wall Street is miles ahead of the cops.

I wish to clarify that I am not suggesting in any way that Wall Street firms harbour terrorists. They certainly don't. They are merely firms that have evolved into entities that wish to maximise profit - by fair means or foul. That is what the business schools and years of no-catch-me muggings have taught them.

But their organisation structure and the culture they have successfully mastered is so alarmingly attractive, that Al-Qaeda - in search of immortality and a life beyond Osama bin Laden - must be studying Wall Street very closely.

Maybe, they have already adopted their winning ways.

Here is an extract from www.Terrorism-Research.com

The organizational structure of a group determines its strengths and weaknesses. A general knowledge of the prevalent models of terrorist organizations leads to a better understanding of their capabilities…..

The smallest elements of terrorist organizations are the cells that serve as building blocks for the terrorist organization. One of the primary reasons for a cellular or compartmentalized structure is security. The compromise or loss of one cell should not compromise the identity, location, or actions of other cells. A cellular organizational structure makes it difficult for an adversary to penetrate the entire organization. Personnel within one cell are often unaware of the existence of other cells and, therefore, cannot divulge sensitive information to infiltrators.

Terrorists may organize cells based on family or employment relationships, on a geographic basis, or by specific functions such as direct action and intelligence. The terrorist group may also form multifunctional cells. The terrorist group uses the cells to control its members. Cell members remain in close contact with each other to provide emotional support and to prevent desertion or breach of security procedures. The cell leader is normally the only person who communicates and coordinates with higher levels and other cells.

Now think of Wall Street with its various divisions and its Too Big To Be Questioned attitude of godliness.

The CEO who does not know the details of any single business.
But knows that each cell he "controls" must contribute.
Their cause is money.
Their target is your wallet.
The terrorists may never get you, but you bet that Wall Street will.
Or already did.

[motowner]

Too heavy for friday afternoon read... monday ko padhunga..

[smellyfinger]

Originally Posted by motowner

Too heavy for friday afternoon read... monday ko padhunga..

Maine pichle monday padh liya tha.

[Rakhi]

Originally Posted by ALBERT PINTO

The CEO who does not know the details of any single business.
But knows that each cell he "controls" must contribute.
Their cause is money.
Their target is your wallet.
The terrorists may never get you, but you bet that Wall Street will.
Or already did.

Oh really? So if every investment banker is a terrorist in some way (when he said fair play or foul), every software engineer who is writing a program for the bankers is also a terrorist?

How can one even compare terrorism with Banking! Terrorism kills people and banking does not!
And coming to credit crunch, don't tell me that public didn't know about how dangerous the sub prime markets are. If they are sub-prime it means they already are out of the primary market. Yet, they go for it and conveniently blame the bankers when things didn't go the way they expected.

To an extent it is true that people in the banking industry knew the fate and many banks did pull out on time and avoided loss. But to compare wall st to terrorism is absurd.

[kkkk]

Originally Posted by Rakhi

How can one even compare terrorism with Banking! Terrorism kills people and banking does not!

terrorism kills people in a jhatka, banking kills people slowly... It has inspired a lot of people to commit suicides...

[Rakhi]

Originally Posted by kkkk

terrorism kills people in a jhatka, banking kills people slowly... It has inspired a lot of people to commit suicides...

many of us here are into trading, some of even trade on a daily basis. When we make money its OK but when we loose money suddenly it becomes a killer. How?

K4, the answer is fairly simple. When we become too greedy and start being aggressive, things go wrong. There has to be a cushion for every action we take. Since we are talking about Wall st, lets stick to US. The government realized very large inflow of money since late late 90's. Inflow of money into the economy made people get "easy credit". They went over board and bought things they cannot afford (including homes, vacations you name it). Neither the govt stepped in and nor the banks stopped. And neither did the individuals.
Both the banks and the individuals suffered because of series of bad decisions. Now, how did the bank become a killer here?

[smellyfinger]

Originally Posted by Rakhi

many of us here are into trading, some of even trade on a daily basis. When we make money its OK but when we loose money suddenly it becomes a killer. How?

K4, the answer is fairly simple. When we become too greedy and start being aggressive, things go wrong. There has to be a cushion for every action we take. Since we are talking about Wall st, lets stick to US. The government realized very large inflow of money since late late 90's. Inflow of money into the economy made people get "easy credit". They went over board and bought things they cannot afford (including homes, vacations you name it). Neither the govt stepped in and nor the banks stopped. And neither did the individuals.
Both the banks and the individuals suffered because of series of bad decisions. Now, how did the bank become a killer here?

Rakhi bai,

you are only talking about the mortgage defaults. The bigger issue is that of derivatives trading - and the biggest one is the collusion of ratings agencies with the financial firms. How can Moody's or S&P give a AAA rating for instruments and funds based on derivatives lacking any kind of foundation? That, in my opinion, was the biggest crime. People (individuals, funds, companies) invest based on ratings provided by these ratings agencies. If the agencies themselves are compromised due to vested interests (or ignorance - duh, we didnt see this coming), then the whole system falls apart.

BTW, no one is calling wall street terrorists. The article suggests that terrorist organizations and wall street operate in the same way organizationally.

Having said that, its a load of bull anyway. So what if they do. Read the Starfish and the Spider - it explains a lot, and from way before this crisis.

[Rakhi]

Originally Posted by smellyfinger

Rakhi bai,

you are only talking about the mortgage defaults. The bigger issue is that of derivatives trading - and the biggest one is the collusion of ratings agencies with the financial firms. How can Moody's or S&P give a AAA rating for instruments and funds based on derivatives lacking any kind of foundation? That, in my opinion, was the biggest crime. People (individuals, funds, companies) invest based on ratings provided by these ratings agencies. If the agencies themselves are compromised due to vested interests (or ignorance - duh, we didnt see this coming), then the whole system falls apart.

BTW, no one is calling wall street terrorists. The article suggests that terrorist organizations and wall street operate in the same way organizationally.

Having said that, its a load of bull anyway. So what if they do. Read the Starfish and the Spider - it explains a lot, and from way before this crisis.

OK agreed that the rating companies messed up from the derivatives/rating perspective. But the intentions were not to get the system fall apart. But the intentions of a terrorist organization was to get the the people killed.
To sum it all up and say that the terrorist organizations and wall st works the same way is like Canadian Embassy denying visa to a retired IBO a visa claiming that he used to work with some terrorist org.

[ALBERT PINTO]

Originally Posted by Rakhi

many of us here are into trading, some of even trade on a daily basis. When we make money its OK but when we loose money suddenly it becomes a killer. How?

Day trading never kills. Because part-time day traders seldom make money. They get so used to loose money, no recession could kill them. They continue trade only for that gambling ‘kick’.

Originally Posted by Rakhi

When we become too greedy and start being aggressive, things go wrong.

Right, but apart from greed, there is another driving factor – fear. Now what instills greed and fear in investor? The mass / mob mania in market. Anybody who is active in market would vouch that contrary to popular belief, its not the news which moves the market (news get priced in quickly); but the views. Now what influences views or outlook? There comes the role of so-called analysts who could be a banker, auditor or lawyer.

Originally Posted by Rakhi

Both the banks and the individuals suffered because of series of bad decisions.

But no individual investor is bailed out by tax-payers money; but all banks got.

Originally Posted by Rakhi

Now, how did the bank become a killer here?

Read on:

Suicides from financial crisis cause concern
By KELLI KENNEDY, Associated Press Writer Tue Oct 14, 9:00 AM ET
An out-of-work money manager in California loses a fortune and wipes out his family in a murder-suicide. A 90-year-old Ohio widow shoots herself in the chest as authorities arrive to evict her from the modest house she called home for 38 years.
In Massachusetts, a housewife who had hidden her family's mounting financial crisis from her husband sends a note to the mortgage company warning: "By the time you foreclose on my house, I'll be dead."
Then Carlene Balderrama shot herself to death, leaving an insurance policy and a suicide note on a table.
Across the country, authorities are becoming concerned that the nation's financial woes could turn increasingly violent, and they are urging people to get help. In some places, mental-health hot lines are jammed, counseling services are in high demand and domestic-violence shelters are full.
"I've had a number of people say that this is the thing most reminiscent of 9/11 that's happened here since then," said the Rev. Canon Ann Malonee, vicar at Trinity Church in the heart of New York's financial district. "It's that sense of having the rug pulled out from under them."
With nowhere else to turn, many people are calling suicide-prevention hot lines. The Samaritans of New York have seen calls rise more than 16 percent in the past year, many of them money-related. The Switchboard of Miami has recorded more than 500 foreclosure-related calls this year.
"A lot of people are telling us they are losing everything. They're losing their homes, they're going into foreclosure, they've lost their jobs," said Virginia Cervasio, executive director of a suicide resource enter in southwest Florida's Lee County.
But tragedies keep mounting:
• In Los Angeles last week, a former money manager fatally shot his wife, three sons and his mother-in-law before killing himself.
Karthik Rajaram, 45, left a suicide note saying he was in financial trouble and contemplated killing just himself. But he said he decided to kill his entire family because that was more honorable, police said.
Rajaram once worked for a major accounting firm and for Sony Pictures, and he had been part-owner of a financial holding company. But he had been out of work for several months, police said.
After the murder-suicide, police and mental-health officials in Los Angeles took the unusual step of urging people to seek help for themselves or loved ones if they feel overwhelmed by grim financial news. They said they were specifically afraid of the "copycat phenomenon."
"This is a perfect American family behind me that has absolutely been destroyed, apparently because of a man who just got stuck in a rabbit hole, if you will, of absolute despair," Deputy Police Chief Michel Moore said. "It is critical to step up and recognize we are in some pretty troubled times."
• In Tennessee, a woman fatally shot herself last week as sheriff's deputies went to evict her from her foreclosed home.
Pamela Ross, 57, and her husband were fighting foreclosure on their home when sheriff's deputies in Sevierville came to serve an eviction notice. They were across the street when they heard a gunshot and found Ross dead from a wound to the chest. The case was even more tragic because the couple had recently been granted an extra 10 days to appeal.
• In Akron, Ohio, the 90-year-old widow who shot herself on Oct. 1 is recovering. A congressman told Addie Polk's story on the House floor before lawmakers voted to approve a $700 billion financial rescue package. Mortgage finance company Fannie Mae dropped the foreclosure, forgave her mortgage and said she could remain in the home.
• In Ocala, Fla., Roland Gore shot his wife and dog in March and then set fire to the couple's home, which had been in foreclosure, before killing himself. His case was one of several in which people killed spouses or pets, destroyed property or attacked police before taking their own lives.
"The financial stress builds up to the point the person feels they can't go on, and the person believes their family is better off dead than left without a financial support," said Kristen Rand, legislative director of the Washington D.C.-based Violence Policy Center.
Dr. Edward Charlesworth, a clinical psychologist in Houston, said the current crisis is breeding a sense of chronic anxiety among people who feel helpless and panic-stricken, as well as angry that their government has let them down.
"They feel like in this great society that we live in we should have more protection for the individuals rather than just the corporation," he said.
It's not yet clear there is a statistical link between suicides and the financial downturn since there is generally a two-year lag in national suicide figures. But historically, suicides increase in times of economic hardship. And the current financial crisis is already being called the worst since the Great Depression.
Rising mortgage defaults and falling home values are at the heart of it. More than 4 million Americans were at least one month behind on their mortgages at the end of June, according to the Mortgage Bankers Association.
A record 500,000 had entered the foreclosure process. And that trend is expected to continue through next year, despite the current programs from the government and the lending industry to refinance delinquent homeowners into more affordable loans.
Counselors at Catholic Charities USA report seeing a "significant increase" in the need for housing counseling.
One counselor said half of her clients were on some form of antidepressant or anti-anxiety medication. The agency has seen a decrease in overall funding, but it has expanded foreclosure counseling and received nearly $2 million for such services in late 2007.
Adding to financially tense households is an air of secrecy. Experts said it's common for one spouse to blame the other for their financial mess or to hide it entirely, as Balderrama did.
After falling 3 1/2 years behind in payments, the Taunton, Mass., housewife had been intercepting letters from the mortgage company and shredding them before her husband saw them. She tried to refinance but was declined.
In July, on the day the house was to be auctioned, she faxed the note to the mortgage company. Then the 52-year-old walked outside, shot her three beloved cats and then herself with her husband's rifle.
Notes left on the table revealed months of planning. She'd picked out her funeral home, laid out the insurance policy and left a note saying, "pay off the house with the insurance money."
"She put in her suicide note that it got overwhelming for her," said her husband, John Balderrama. "Apparently she didn't have anyone to talk to. She didn't come to me. I don't know why. There's gotta be some help out there for people that are hurting, (something better) than to see somebody lose a life over a stupid house."
An out-of-work money manager in California loses a fortune and wipes out his family in a murder-suicide. A 90-year-old Ohio widow shoots herself in the chest as authorities arrive to evict her from the modest house she called home for 38 years.
In Massachusetts, a housewife who had hidden her family's mounting financial crisis from her husband sends a note to the mortgage company warning: "By the time you foreclose on my house, I'll be dead."
Then Carlene Balderrama shot herself to death, leaving an insurance policy and a suicide note on a table.
Across the country, authorities are becoming concerned that the nation's financial woes could turn increasingly violent, and they are urging people to get help. In some places, mental-health hot lines are jammed, counseling services are in high demand and domestic-violence shelters are full.
"I've had a number of people say that this is the thing most reminiscent of 9/11 that's happened here since then," said the Rev. Canon Ann Malonee, vicar at Trinity Church in the heart of New York's financial district. "It's that sense of having the rug pulled out from under them."
With nowhere else to turn, many people are calling suicide-prevention hot lines. The Samaritans of New York have seen calls rise more than 16 percent in the past year, many of them money-related. The Switchboard of Miami has recorded more than 500 foreclosure-related calls this year.
"A lot of people are telling us they are losing everything. They're losing their homes, they're going into foreclosure, they've lost their jobs," said Virginia Cervasio, executive director of a suicide resource enter in southwest Florida's Lee County.
But tragedies keep mounting:
• In Los Angeles last week, a former money manager fatally shot his wife, three sons and his mother-in-law before killing himself.
Karthik Rajaram, 45, left a suicide note saying he was in financial trouble and contemplated killing just himself. But he said he decided to kill his entire family because that was more honorable, police said.
Rajaram once worked for a major accounting firm and for Sony Pictures, and he had been part-owner of a financial holding company. But he had been out of work for several months, police said.
After the murder-suicide, police and mental-health officials in Los Angeles took the unusual step of urging people to seek help for themselves or loved ones if they feel overwhelmed by grim financial news. They said they were specifically afraid of the "copycat phenomenon."
"This is a perfect American family behind me that has absolutely been destroyed, apparently because of a man who just got stuck in a rabbit hole, if you will, of absolute despair," Deputy Police Chief Michel Moore said. "It is critical to step up and recognize we are in some pretty troubled times."
• In Tennessee, a woman fatally shot herself last week as sheriff's deputies went to evict her from her foreclosed home.
Pamela Ross, 57, and her husband were fighting foreclosure on their home when sheriff's deputies in Sevierville came to serve an eviction notice. They were across the street when they heard a gunshot and found Ross dead from a wound to the chest. The case was even more tragic because the couple had recently been granted an extra 10 days to appeal.
• In Akron, Ohio, the 90-year-old widow who shot herself on Oct. 1 is recovering. A congressman told Addie Polk's story on the House floor before lawmakers voted to approve a $700 billion financial rescue package. Mortgage finance company Fannie Mae dropped the foreclosure, forgave her mortgage and said she could remain in the home.
• In Ocala, Fla., Roland Gore shot his wife and dog in March and then set fire to the couple's home, which had been in foreclosure, before killing himself. His case was one of several in which people killed spouses or pets, destroyed property or attacked police before taking their own lives.
"The financial stress builds up to the point the person feels they can't go on, and the person believes their family is better off dead than left without a financial support," said Kristen Rand, legislative director of the Washington D.C.-based Violence Policy Center.
Dr. Edward Charlesworth, a clinical psychologist in Houston, said the current crisis is breeding a sense of chronic anxiety among people who feel helpless and panic-stricken, as well as angry that their government has let them down.
"They feel like in this great society that we live in we should have more protection for the individuals rather than just the corporation," he said.
It's not yet clear there is a statistical link between suicides and the financial downturn since there is generally a two-year lag in national suicide figures. But historically, suicides increase in times of economic hardship. And the current financial crisis is already being called the worst since the Great Depression.
Rising mortgage defaults and falling home values are at the heart of it. More than 4 million Americans were at least one month behind on their mortgages at the end of June, according to the Mortgage Bankers Association.
A record 500,000 had entered the foreclosure process. And that trend is expected to continue through next year, despite the current programs from the government and the lending industry to refinance delinquent homeowners into more affordable loans.
Counselors at Catholic Charities USA report seeing a "significant increase" in the need for housing counseling.
One counselor said half of her clients were on some form of antidepressant or anti-anxiety medication. The agency has seen a decrease in overall funding, but it has expanded foreclosure counseling and received nearly $2 million for such services in late 2007.
Adding to financially tense households is an air of secrecy. Experts said it's common for one spouse to blame the other for their financial mess or to hide it entirely, as Balderrama did.
After falling 3 1/2 years behind in payments, the Taunton, Mass., housewife had been intercepting letters from the mortgage company and shredding them before her husband saw them. She tried to refinance but was declined.
In July, on the day the house was to be auctioned, she faxed the note to the mortgage company. Then the 52-year-old walked outside, shot her three beloved cats and then herself with her husband's rifle.
Notes left on the table revealed months of planning. She'd picked out her funeral home, laid out the insurance policy and left a note saying, "pay off the house with the insurance money."
"She put in her suicide note that it got overwhelming for her," said her husband, John Balderrama. "Apparently she didn't have anyone to talk to. She didn't come to me. I don't know why. There's gotta be some help out there for people that are hurting, (something better) than to see somebody lose a life over a stupid house."

[Rakhi]

OK..big article Albert, so give me some time before I give a response.

[smellyfinger]

Originally Posted by ALBERT PINTO

But no individual investor is bailed out by tax-payers money; but all banks got.

Thats another inaccurate statement. There is no person called bank. What you are calling "bank" is nothing but a bunch of individual investors (yes, even the mutual funds eventually boil down to an individual's money). Lets say I am an individual investor. Lets say I own Citi stock. Thanks to the bailout, the value of my stock tripled. So how do you say the bailout did not help me?

[Rakhi]

Originally Posted by ALBERT PINTO

Day trading never kills. Because part-time day traders seldom make money. They get so used to loose money, no recession could kill them. They continue trade only for that gambling ‘kick’.

No, not really. There are quite a lot of people whom i know who trade seriously than just for a kick.

Right, but apart from greed, there is another driving factor – fear. Now what instills greed and fear in investor? The mass / mob mania in market. Anybody who is active in market would vouch that contrary to popular belief, its not the news which moves the market (news get priced in quickly); but the views. Now what influences views or outlook? There comes the role of so-called analysts who could be a banker, auditor or lawyer.

Are you referring to oil prices example here? I do not understand the context of fear in this melt down you are talking about. are you suggesting that the bankers are intentionally misleading the folks around? Is everyone that naive?

But no individual investor is bailed out by tax-payers money; but all banks got.

Melly answered pretty much what I wanted to.

Read on:

I still didn't read the article you just quoted.

[ALBERT PINTO]

Originally Posted by smellyfinger

Lets say I am an individual investor. Lets say I own Citi stock. Thanks to the bailout, the value of my stock tripled. So how do you say the bailout did not help me?

On a quick read, your statement apparently makes sense but to complete it , you need to add an assumption, that you invested after the bailout.

Citibank at the peak (pre-recession) - $ 55/- per share.
Around Bailout (Nov. 2008) - $ 3.70 per share
Post bailout - never went beyond $ 5.25 per share.

There was a price of $ 1.50 post bailout (where the said trippling works out); thats why I said to add the assumption.

[ALBERT PINTO]

Originally Posted by Rakhi

No, not really. There are quite a lot of people whom i know who trade seriously than just for a kick.

Trade seriously and making profit from day trading are two different things.

When its about money, niceness is seriously over-rated. Don't go for the seriousness; ask to support their claim with a copy of their demat account.

[smellyfinger]

Originally Posted by ALBERT PINTO

On a quick read, your statement apparently makes sense but to complete it , you need to add an assumption, that you invested after the bailout.

Citibank at the peak (pre-recession) - $ 55/- per share.
Around Bailout (Nov. 2008) - $ 3.70 per share
Post bailout - never went beyond $ 5.25 per share.

There was a price of $ 1.50 post bailout (where the said trippling works out); thats why I said to add the assumption.

The tripling was just an example. Point is, without the bailout, my stock would have been worth close to zero, right? In fact, in some cases it would have been zero bcos the companies would have had to file bankruptcy. Now its worth something. So, as an individual investor, I got bailed out. Even if its not back to pre-recession prices, at least its worth something.