WHAT WALL STREET NEEDS FROM SANTA
by Mark Scheinbaum
American Reporter Correspondent
Lake Worth, Fla.
LAKE WORTH, Fla., Dec. 11, 2002 -- Santa George looked down from his sleigh and decided that Wall Street needed a new ribbon-wrapped Treasury Secretary, SEC Chairman, and Chief Economic Advisor.
Santa George was wrong. What Wall Street and the tens of millions of Americans need to restore confidence in their investments, and as a reason to climb on a bull market, is common-sense reform. This week's action by CALPERS, the largest pension fund in the world, was a good start. CALPERS' board gave the boot to Merrill Lynch and Credit Suisse/First Boston and told them their (alleged) portfolio management skill and investment advice is no longer welcome, or needed. Thank you and good-bye. Oh yes, don't let the regulatory door hit you in the butt as you leave. While New York State's attorney general and individual shareholder suits might augment Justice Department action - which seems slower than a squooshed Tootsie Roll on a Manhattan sidewalk IN aUGU.S.T - money managers can and have taken action. If the average Joe and Jane investor, big trust companies and mutual funds follow suit, there will be a rush on Argus, Value Line, Wright Financial, Morningstar, S&P, Moody's, Fitch, Duff & Phelps, and other truly independent researchers or raters of stocks and bonds. Here's my own Christmas list for Santa George to fill. Delivery on Christmas Day will bring a smile to investors a year down the road:
In between football games and glitzy "business" reports from Times Square, let us require a warning on print ads, on radio, or on the screen: "With the exception of Microsoft, Intel, and a few select large capitalization stocks which are also tracked in the major Dow Jones indices and have investment-grade ratings, many, if not most, Nasdaq issues are not investment grade, and not prudent investments for poor and middle-income people, or retirees seeking preservation of principal and moderate, long-term capital gains."
The new directors must not be a current director of any public company; must be 18 years of age; and, must be citizens of the United States; must have never been convicted of a felony; and must possess a high school diploma or GED. The new directors shall serve for a term of office not less than three years, and then be replaced by the same method. Usual and customary fees and expenses shall be afforded them. If followed, the overall quality of decisions, oversight, and debate at board meetings will be improved.
If nothing else, that rule will put a damper on the Goldman Sachs-type patronage merry-go-round where Mr. Republican Big Shot holds the corner office on the 26th floor, while a floor above or below the resident Mr. Democratic Big Shot has a similar office. Depending upon whose pals are elected, one of the two offices is vacant every few years. Now, that's real campaign reform!
Mark Scheinbaum is chief investment strategist for Kaplan & Co. Securities, www.kaplansecurities.com and shares a small office on the fifth floor with no windows and no big shots.