The indictment of the Bear Stearns' hedge fund managers and the government's stinging loss at trial (The conviction rate in Federal Court is 94%. This includes grey area cases, not cut and dry 10 Commandments stuff... and you better be RICH, because there is NO JUSTICE in Federal Court, only multi $$$$$$ million dollar trials) was a very unusual thing in that innocent people were found innocent - but only because they had the money to fund their defense.
There is a WITCH HUNT going on in the U.S. securities markets (this poor sot is going to jail because his clients lost money, not because he STOLE money - folks, if you invest in the stock market you are taking a risk. Who does not know that? This guy pled guilty because he lacked the money to defend himself and there was no way he was not going to be convicted at trial, even though he committed NO CRIME. Americans think our jury system protects you, and nothing could be further from the truth.) In fact, I withdrew my membership in FINRA (Financial Industry National Regulatory Authority) late last year, returned my clients capital to them, and told them flat out: I cannot be held responsible for YOUR money at this time - there will be more conflagrations in the U.S. financial markets, and I will be no better at seeing them in advance than you are. The U.S. equity market enjoyed one hell of a run in the second half of 2009 for a number of reasons - but in my opinion, positive fundamental change was not among those reasons. Too, although I believe deflation will carry the day initially... inflation may in fact win.
Should I go to jail for making a wrong market call? Should my children grow up without their father because the government needs someone to blame? Should I spend their college funds defending myself? No, thank you. Before the market blows up and the boyz in D.C. need another victim to feed to the Roman Mob... I decided I would rather work at a car wash than run a brokerage firm or brokerage accounts (at least for the time being... and yes, I still run my hedge fund, but that is for big boys only).
This is a time to be very, very paranoid. People ARE going to lose money, that's what happens in deflation AND high inflation. Not to worry though... some nice, ambitious prosecutor (Mike Nifong, anyone? The Duke LaCrosse players got LUCKY - many others innocents are sitting in prison RIGHT NOW) will be happy to spill your blood all over your family's living room if it helps to advance their career or make a constituency happy. (I think back to Ruddy Giuliani and his prosecution of Wall Street in the 1980's... here's a fun fact to know: Each and EVERY conviction was overturned on Appeal! In other words, those juries were only too happy to lynch people they hated irrespective of their innocence or guilt! "And Justice For ALL!!!")
If you work in the financial services industry you should heed this warning. It might be your a$$ burning at the stake next.