Are we living in the United States of Amnesia?

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It was announced that more than $1 trillion has been added to the value of American equities since the stock market hit a two-month low on August 7th. Americans’ wealth has reached a record high, thanks to a surge in the value of stocks and homes.

I’m sorry to be the bearer of bad news, but here’s a news flash: You haven’t made a penny in the stock OR real estate market!

tornpaper2

We’ve been here before…

Just like those glowing reports about how much Americans’ wealth had ballooned prior to the last financial crash, the new reports are pure fiction. Until you sell your assets and lock in your (hopefully) gains, you have nothing more than a bunch of eye-popping numbers on paper. Those numbers repeatedly sucker many of us into believing we have real wealth and financial security when we do not. [Read more…] “Are we living in the United States of Amnesia?”

Is Wall Street rigged?

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How would you feel if you went online to buy something – for example, a TV that’s listed at $495.00 – but when you get your order confirmation and credit card statement, you realize you got charged $535.00 for it instead?

sticker shockWhen you inquire about the price hike, you’re given the run-around, but eventually you’re told that there was only one TV available at that price, and someone else bought it a split second before your order got processed. So they filled your order with the same TV at the then-available best price, which was higher.

And, they remind you, they have an “all sales are final” policy, so you’re stuck with the deal.

You’d probably raise holy heck, wouldn’t you? Or you’d vow never to patronize that company again, right?

So, you make your next online purchase from a different company… and the exact same thing happens! In fact, it happens every time you make an online purchase, adding up to significant lost dollars to you over time.

Well, as it was revealed last week, this is exactly what’s happening to stock market investors every day – and it’s been going on for years. And it’s costing every-day investors billions of dollars.

60 Minutes just did an exposé on it, titled “Rigged,” just as a much-anticipated new book by Michael Lewis called Flash Boys blew the lid off this latest scandal.

Lewis summed it up this way:

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A profound lesson on investing from the Wolf of Wall Street

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If you haven’t seen the Oscar-nominated movie, The Wolf of Wall Street yet, I’m not necessarily suggesting you see it.

It’s based on a true story of Wall Street’s excesses, and it’s chock-full of graphic scenes of sex, drugs and debauchery. And it’s l-o-o-o-o-o-n-g – about three hours.

The WOLF of Wall Street PosterBut whether you decide to see it or not, there’s a scene in it that is so profound, I’m going to spill the beans about it here. It’s the best ten seconds of any movie I’ve seen in quite a while, especially given the 1,200-point drop in the Dow over the last couple weeks. But first, here’s a little background info…

The movie, directed by Martin Scorsese and starring Leonardo DiCaprio, is based on the autobiographical book by Jordan Belfort, which details his rise and fall on Wall Street.

Belfort had just finished training at a major Wall Street firm, and on his first day as a licensed stock broker, the world markets crashed. It was “Black Monday” – in October, 1987.

The firm was one of many that soon closed down, and Belfort was out of a job. But not for long. He soon discovered a world of white-collar crime, taking over a Long Island penny-stock cold-calling boiler room, and was soon making millions by convincing investors to buy stocks his company had invested in, and then selling the stocks for a huge profit. The investors were left with worthless holdings.

Ultimately, after a Federal investigation, Belfort pleaded guilty to securities fraud and charges of money laundering. Rather than face decades behind bars, he became a government witness. He ended up serving 22 months in prison and was ordered to pay his fraud victims $110 million in restitution. He was also barred from the securities industry for life.

Believe it or not, today Belfort gets paid big bucks by major corporations to teach their sales reps “the art of Straight Line Persuasion – how to create instant rapport, control the sales conversation and close every single deal that’s closeable.”

Really! You can’t make up stuff this good!

And he hasn’t paid most of the $110 million he owes to his victims, but that’s another story.

Nothing has really changed on Wall Street, as I reveal in the article I wrote this summer, “A Month of Scams and Scandals on Wall Street.” And JP Morgan Chase just gave a 74% raise to Chief Jamie Dimon in a year in which the bank paid more than $20 BILLION in fines and other legal costs.

Now for the Best 10 Seconds in the Movie

[Read more…] “A profound lesson on investing from the Wolf of Wall Street”