Tony Deyal
THE ONLY bond that was ever of any interest to me when I was growing up was James whose adventures left me, unlike his trademark dry martini, both shaken and stirred. The only stock I knew about was the livestock, meaning cows, that my aunt and uncle owned. Sticks and stones, yes, and plenty of them for they were our bats and balls, and when the sporting spirits gave vent to violence, our weapons as well. But not stocks and bonds. In those days I had a good time playing Monopoly. Now Bill Gates has been indicted for it.
Even today, I find no great interest in stocks and bonds being of the age and inclination to keep my money under a mattress. Unfortunately, fiber being now considered a major component of a balanced diet instead of a restful night's sleep, and foam being the material of choice for mattresses, I have opted for banks, although they charge more for their services than mattresses and still provide no guarantee of confidentiality. My ideal ATM would be A Trusted Mattress, and with my head full of dreams and my mattress fulfilling the role of treasury, I would sleep the sleep of the just knowing that my treasured mattress would never sell me out or disclose my paltry treasures to crooks and kidnappers.
Increasingly there is wisdom in this. According to Bankrate.com, a trusted guide to navigating the deep financial waters of Wall Street and other centres of depravity, The stock market has picked up steam lately, but for many investors the resurgence isn't enough. Instead, they look for quicker ways to bolster their portfolios. The problem is, some promised high-return opportunities are downright frauds. There are many schemes or scams (same thing if you consider the Government housing, health and national insurance schemes that abound in the Caribbean) that have been identified as more dangerous to your financial health than banks. Many are variations of Ponzi schemes, named after an Italian, Carlo Charles Ponzi, who promised to double his investors money in 90 days through buying stamps cheap in some countries and cashing them in for about six times their value in the United States.
PYRAMID OPERATION
Thousands of people invested and the early participants in the scheme actually got great returns on their money because Ponzi used money from the later investors to pay the early ones. Essentially it was a pyramid operation. Ponzi was a millionaire until his house of cards collapsed. All it needed was a story in a Boston newspaper questioning the stability of Ponzi's company and his pyramid fell apart under the pressure of investors vainly demanding their money back cheop-cheop. Bankrate.com warns that Ponzi is back with a vengeance. In Mississippi last year, two Ponzi scammers pleaded guilty to a scheme that robbed 41 investors from four states of $10.2 million. They convinced investors that they were taking part in a money-trading programme. The programme never existed.
Last year, Pennsylvania securities regulators shut down a Ponzi scheme that took $2 million, mainly from senior citizens. What is frightening is that there are many Caribbean institutions that would be unable to bear close scrutiny. Many investors, particularly senior citizens afraid that they would not have anything put aside for their old age, or suffering the anguish of trying to make ends meet in inflationary times, in Trinidad, Grenada and Jamaica particularly, have become victims, or will soon become victims, of get-rich-quick schemes. These scams will not provide for your old age but will merely hasten its arrival.
TAX EXEMPTION
I believe I am like the man who put half his money in paper towels and the other half in revolving doors. He claimed to have been wiped out before he could even turn around. Someone tried to explain how this could happen using the Enron example. Having pointed out that when my uncle and aunt had two cows, sold the milk and bought a bull, that was capitalism, he explained Enron's Venture Capitalism. He said, 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 share-holder 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. That's why I don't play the stock market. But I don't mind joking about it.
The best fun I've had is with this market report from an anonymous source, Helium was up, feathers were down. Paper was stationary. Fluorescent tubing was dimmed in light trading. Knives were up sharply. Cows steered into a bull market. Pencils lost a few points. Hiking equipment was trailing. Elevators rose, while escalators continued their slow decline. Weights were up in heavy trading. Light switches were off. Mining equipment hit rock bottom. Diapers remain unchanged. Shipping lines stayed at an even keel. The market for raisins dried up. Coca Cola fizzled. Caterpillar stock inched up a bit. Sun peaked at midday. Balloon prices were inflated. And Scott Tissue touched a new bottom while batteries exploded in an attempt to recharge the market.
Tony Deyal was last seen saying he tried the stock market once and invested heavily in Victoria's Secret underwear but the bottom fell out.
