Conquer Change with Robert Ian

Naked Short Selling: Will SEC Chairman Chris Cox Be Ethical and "Do the Right Thing"? In His Own Words

There's a publication I receive called Speaker Magazine and it's the official magazine of the National Speakers Association of which I have been a professional member since 1988.

The cover story of their September 2007 issue features an interview with the chairman of the SEC, Christopher Cox. The headline reads: "Doing the right thing." It goes on to say: "the chairman of the SEC explains his philosophy about ethics and setting the right tone from the top."

He was asked if he had a credo or philosophy of ethics: he said "it's the simplest one of all: The do unto others principle." He said "there are always opportunities for dishonest individuals to cheat and seemingly get ahead. But in any community, large or small, if everyone were to behave the same way, no one would get ahead. In fact that behavior would quickly be regarded as destructive."

He was asked if there were common ethics violations that occur on a regular basis. He said "Yes, the cases have in common the desire of someone, sometimes several people, to advance their personal interests at the expense of others." He said, "For example, it's very common to find people covering up bad behavior to protect the reputation of a company."

He was asked if he could change the world with one recommendation regarding ethics, what would that recommendation be? He said: "Focus on helping others and maintain your integrity in all that you do."

Chairman Cox clearly understands the ethical problems before him. He has it, within his power to do the right thing, right now.

He recently said that "naked shorting" of financial stocks would not be tolerated. This statement was made following the bailout of Fannie Mae and Freddie Mac. Chairman Cox was clearly worried that naked short selling of these companies might quickly drive their already depressed share prices even lower. It might even destroy these companies altogether. I applaud Chairman Cox for highlighting the dangers of naked short selling front and center in the public mind. However, he made one egregious error. He said naked shorting of financial stocks would not be tolerated (implying that naked shorting of other market sectors would be tolerated). Does this sound ethical to you?

The implication is that naked shorting is harmful to financial stocks, but not to others. There are nearly 2 dozen financial firms who are now officially protected from naked short selling. The irony is these firms are responsible for facilitating massive amounts of short selling against all other sectors in the market. They are being exempted from the very practice they say is harmful. Does this sound ethical to you?

Naked short selling is the equivalent of financial terrorism. It manipulates markets and destroys the public confidence. It can gut otherwise healthy companies, and in some cases, destroy them completely. It should not be tolerated under any circumstances.

History will judge Chairman Cox's legacy by how he responds to this crisis. Will he endorse uniform standards by prohibiting naked short selling on all securities? Or will he endorse the current double standard that hurts the individual investor by bleeding their hard earned money from pension plans and 401k accounts.

I can only hope that Chairman Cox is going to use his very public pronouncement on the evils of naked short selling in financial stocks as a springboard to prohibit naked short selling on all stocks and securities that are subject to this practice. This would be ethical. This would be doing the right thing. This would be setting the right tone from top and this would make Chairman Cox a man of his word.

Waking Up to the Music That's Inside You

Since his recent passing, many of George Carlin's famous quotations are making there way around the internet. One in particular, has special meaning for those of us who want to stay motivated in the face of adversity: "Those who dance are considered insane by those who cannot hear the music."

What music are you hearing that no one else can hear? What possibilities do you see that no one else can see? Sing louder and grab onto those possibilities with both hands. Don't let go for anything.

I have a plaque that hangs in my office called "Crisis and Opportunity". It says: Opportunity is always present in the midst of a crisis. The Chinese word for crisis carries two elements: danger and opportunity. No matter the difficulty of the circumstances, no matter how dangerous the situation, at the heart of each crisis lies a tremendous opportunity. Great blessings lie ahead for the one who knows the secret of finding opportunity within each crisis.

Remember George Carlin: "Those who dance are considered insane by those who cannot hear the music."

Finish this sentence: If I allow myself to hear the music that's deep inside me....

Flip-Flops and Doublespeak: Why Lying is Par for the Course in Politics

I feel my intelligence is often under assault when I watch television news programs, and in particular, financial TV. Several broadcasts were talking about all the flip flops the two main candidates have made in their positions this year. These broadcasts weren't being critical, they were discussing this as if it were an acceptable practice. That it's somehow OK to distort your positions in the primaries, in order to pick up the fringe vote in each party. And that it's apparently OK to become more centrist during a general election and try to bamboozle the voters even more. In other words, it OK to lie out both sides of your mouth and try to please everyone. The frightening thing is that so many people accept this paradigm. They accept this false notion that even if politicians have to lie (just a little bit) to get elected, that they'll tell the truth once they're in office.

When they're caught in a flip-flop, in other words a lie, they claim to have been enlightened or discovered new research that warrants a change in their beliefs. The dirty little secret is that they have very few core beliefs. They have very few core principles. It seems most beliefs and principles are subject to revision depending on which group they happen to be speaking to at the moment. Personally, I like to know where people stand, even if I disagree with them on certain issues. I can respect someone who takes a stand and doesn't back down. Flip-flopping is range of the moment politics designed to make the next poll numbers look good.

This brings us to subject of doublespeak. Doublespeak is language that sounds important, but is designed to confuse. It's designed to pacify the listener into accepting the status quo. Those who practice the art of doublespeak realize full well that a confused mind does nothing. Doublespeak is like reading your horoscope. It means whatever you want it to mean. Doublespeak is an assault on your intelligence, and it's prevalent on much of financial TV. I mean really, time after time, when bad economic news is reported, most commentators try to play it up as something positive. They shower us with "happy talk" and try to convince us all is well. They try to convince us that perception is more important than reality.

I have news for the commentators, the politicians, the federal reserve and all the talking heads and political pundits. Perception isn't more important than reality. Perception may be able to outrun reality for a while, but perception is eventually overtaken and crushed by reality. Those who cling to false perceptions of the market will eventually be destroyed by those perceptions.

The only solution is to think for yourself and make your own choices. Stop bathing your mind in the endless rhetoric of financial TV and political flip-flops. Start choosing the news sources you trust and the commentary you know to be true. Only then, will you have a fighting chance for your own financial survival.

Atlas Is About To Shrug: Analysis of Alan Greenspan; Is He Evil? Is He A Genius? Or Both?

This week I spent several hours in my library perusing a number books I haven't looked at in years. One in particular I want to comment on is by Ayn Rand, called Capitalism: The Unknown Ideal. It's a brilliant collection of essays about the economy that are as relevant today as they were in the 1960's. One essay in particular was written by a much younger Alan Greenspan called "Gold and Economic Freedom" in which he writes:

"The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit." He goes on to say: "The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is, there are now more claims outstanding than real assets." He concludes by saying: "In the absence of a gold standard, there is no way to protect savings from confiscation through inflation."

In my opinion, Sir Alan Greenspan had it right when he wrote this article in the 1960's. But he had it really wrong in practice when he ran the Federal Reserve for 18 years. Perhaps he had a senior moment, you know, a lapse of memory,  that lasted for 18 years. Or perhaps he was trying to set the stage for a global economic collapse. Just like in the book Atlas Shrugged where John Galt said: "I will stop the motor of the world."

Whether it was by choice or by chance, Alan Greenspan helped lay the foundation for stopping the economic motor of the world. An achievement that will become painfully obvious in the coming months and years. He did it by flooding the world with monetary inflation during the dot-com run up in the 1990's. He did the same thing with the housing run up in the first half of this decade.

He did it with confidence and sincerity. By talking circles around politicians and policy makers. By exploiting the full faith and credit of the United States of America.

Is he a genius? Is he evil? Or is he an evil genius that will be praised by history as the man who helped reset the global financial system so we could start over? Only time will tell. But getting there will NOT be half the fun.