Citizen Obligations

I was reading comments on an application called stocktwits yesterday. The discussion concerned a specific investment and one person questioned how buying that investment helped the US Economy or was patriotic. The response was that the US Economy and patriotism wasn't their concern and that the Government should take care of those things.

In general, investment decisions normally have very little to do with Patriotism but you do have to wonder if there is any limit to greed. Yesterday Bernie Madoff got sentenced to 150 years in jail because he was greedy and proud. I really do think that he lost control of his Ponzi scheme at some point and it escalated beyond his control. He was too proud to admit that his greed was ruining hundreds of people and continued up until the last minute bilking unsuspecting investors out of their money.

So, consider a situation where a lot of money could be made but it would decimate the economy and cause tremendous hardship to millions of people? Is the fact that one or a small number of investors or speculators could get rich offset any obligation they have to their fellow citizens? I can pretty much guarantee that most active investors would feel that they should grasp the opportunity. Certainly to pass on this opportunity would only work if everyone also passed on it, otherwise you wouldn't make the money and end up as one of the losers.

There is some speculation that when Lehman went bankrupt and hedge funds and active investors sold all the bank stock they had and shorted all the bank stock they didn't have it precipitated the collapse in the stock market that wiped out the retirement funds of millions. There is some current controversy over whether the uptick rule should be re-instated (requires that a short sale must be made after an uptick in price). It certainly would have crimped a lot of the short selling, and it may have provided the retail investor time to adjust. Now, many of the short sales weren't printed because their were no buyers and the price simply plummeted. As usual the most money was made by the quickest.

Now, the collapse in the economy was a national and world disaster. We are still feeling the consequences and I wouldn't suggest that anyone should have been buying bank stocks in that time frame since it wouldn't have done any good. However, is there any limit?

In reading posts on financial networks, there are a group of posters who really seem to want the economy to collapse. They probably see that a lot more money can be made in a sudden collapse than in a slow recovery. Of course the desire for the economy to collapse isn't going to have any impact on what it actually does, but you wonder about those who wish for millions to suffer so they can benefit. Of course they argue that if they own property, or invest in the economy, they should sell everything and save what they can because Armageddon is coming.

There is a difference between preparing for Armageddon and trying to make it happen.