A Capitalist's Lament, by Author (Hardcover, 2016)|
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Reviewer: Mark Lamendola, author of over 6,000 articles.
I don't know whether to say I am awestruck or blown away. This book is THAT
good. Faust writes clearly and factually, yet with a wit that entertains. And he
clearly understands this subject extremely well.
Thank you, Mr. Faust, for providing this important work to a nation that
is still paying for what happened in 2008 yet has not seen any government
action to stop it from happening again. The same behaviors that brought that
down upon us are still the norm in Wall Street firms. They are still
gambling, and still getting by with morally bankrupt behavior that enriches
them while bankrupting others.
This is one of the most important books to come out in a long time. It
exposes, with evidence and hard facts, the corruption, greed, and moral
bankruptcy in our financial system. The author also proposes how to change
things, so that investors are protected rather than preyed upon. Note that
nearly everyone today is an investor either directly or indirectly. Note
also that millions of people who never invested were deleteriously affected
by the 2008 collapse because that collapse dragged down our entire financial
system and our economy.
The wit Faust brings into this book is important. The subject itself is
dark enough to invoke massive depression (no pun intended), yet his subtle
humor keeps the reader from jumping off the nearest bridge or, for those of
us less prone to such demonstrations, simply feeling ill. As I read this, I
kept picturing Steve Carell's character Mark Baum (a real person) becoming
physically ill during an exchange with a Wall Street psychopath in the movie
"The Big Short."
The lawlessness in our failed state is staggering in its depth and
breadth. Even the ostriches among us should have pulled their heads out of
the sand (or out of another dark place, you know where) after 2008. The
details of this, with incomprehensibly big numbers, escape people however.
The way Faust presents the numbers, things become comprehensible. And I
really like that. This book was badly needed, and now it's here.
The numbers are truly staggering. How does a handful of companies, for
example, generate more debt than the GDP of all nations on earth combined?
We're talking about figures in the trillions. Remember, a trillion is a
million million. Or 1 followed by 12 zeroes. Or think of it this way. A
second isn't very long, is it? But 6 trillion of them works out to 189,276
Faust looks at leveraging, and what he goes into is almost surreal in its
stupidity (not him, the ones who did it). One example was an "investment"
leveraged 40 to 1. If you know anything about finance, that figure makes
your head spin. It's insane, not merely stupid. Faust explains this
leveraging stupidity and its effects in a very clear way; this alone is
worth the price of the book.
The fantastically huge losses happened then, and will happen again,
because people in Wall Street firms are hugely rewarded when they gamble
with other people's money but suffer no penalty when they lose millions or
even billions or even trillions of dollars of other people's money. They get
outsized rewards for minimal effort by engaging in maximum risk, but the
risk falls entirely on others. Faust does an outstanding job of explaining
this, and quantifying the damages as he goes.
I find it quite interesting that an unemployed mother who steals a $10
item to feed her starving child will go to jail but a Wall Street Fat Cat
who gambles and consequently destroys a city's employee retirement fund gets
a multi-million dollar bonus. Does something about that seem a little bit
off to you? Faust doesn't make this comparison, but he does provide example
after example of where this gambling wreaked misery and destruction while
the gambler (who provides no useful function to society) became fabulously
In addition to various deceptive schemes and illegal practices regularly
engaged in, the Wall Street gamblers charge all kinds of fees to milk their
"clients." That discussion alone is rather shocking. And it raises the
question, "Why do any business with these people at all?" That's a question
Faust himself explores in this book. But he's not saying investing itself is
the problem. It's all the lying, cheating, and stealing done by the
stock market intermediaries in Wall Street firms.
At the outset, Faust makes it clear he is a capitalist. He's not
advocating abolishing the stock market. He's advocating cleaning it up, so
that it (once again) functions in a way that is useful to society.
Currently, it's a casino that destabilizes the financial system and destroys
wealth. It's intended to be a market that stabilizes the financial system
and provides the raw materials (financially speaking) to build wealth.
Faust, indeed, runs an investment company (CSI Capital Management). But
Faust isn't in it to see how much he can skin those who trusted him with
their money. He's in it protect those assets and make them grow, through
prudent investing and the avoidance of "get rich quick" (get poor faster!)
moves. If it doesn't make sense, he walks away. I've been an investor for
over 40 years, and I agree with everything he says about investing.
Many people are under the mistaken notion that what passes for the
"government" of our failed state somehow fixed things so the gambling,
lying, cheating, and stealing that resulted in the 2008 meltdown (and cost 6
million Americans their jobs and 8 million Americans their homes, that's a
lot of unemployed and homeless people!) won't happen again. That is not at
all the case. The same criminals who personally made 7 or 8 figures (half a
billion dollars in one case) simply bought the legislators they needed to
give the appearance (for political purposes) of reform. But nothing has
changed except the labels put on the same old gross misconduct. Regulators
with alleged "oversight" of these gamblers don't do anything either, and
Faust explains this as well.
The issue just described is an extremely important one to understand.
Faust doesn't just blithely state an opinion on it and expect you to accept
by faith. He is, by education and training, an attorney. And he builds a
case. A very solid one, at that.
Faust names the bad players in the 2008 financial meltdown. Except for
one very minor player, not one of the bad players went to jail (see the
Elizabeth Warren video on Youtube where she can't get a straight answer to a
So the "government" didn't punish them. Why did the voters not do so? Why
does anyone actually do business with these companies? If you don't know who
the bad players are, stop reading this review and buy this book immediately.
Then come back and finish reading. This book will tell you which criminal
corporations you can stop doing business with. Take advantage of that and
sever all ties. If we stop funding these crooks, psychopaths, and
terrorists, they will not be able to hurt us ever again. Very simple. Vote
with your dollars.
When I drive by a BP station and see cars actually in the parking lot, I
wonder if those people have any brains. Here is a company that has long been
run by the same kinds of gamblers we find on Wall Street. They gambled with
other people's lives and the environment, not just money. And, like their
Wall Street counterparts, they are still doing it even though doing it has
repeatedly gotten people killed. They blew up a refinery (and employees) in
Texas, caused a major oil leak in Prudhoe Bay, and caused that disastrous
oil platform "accident" in the Gulf. The only real voting power we Americans
have is with our consumer dollar. Boycotts change things, voting for the
same old criminals in our farsical "elections" does not.
I wrote this BP example because most people can drive by at least one BP
station every day. Next time you do, count the voters. Shame on them for
voting that way. It is clear to me that BP stands not for British Petroleum,
but for Bad Players. They are bad players and get away with it, because
consumers pay them for their bad playing.
Among other things that Faust advises the reader is to ensure your
investment advisor is acting as a fiduciary, not as a salesman. Does the
meaning of that seem unclear? If so, then buy this book at this very moment.
This book consists of 16 chapters arranged into 5 sections:
- Section I. The Lay of the Street.
- Section II: The Triumph of Selfish Interest.
- Section III: Wall Street Pornography.
- Section IV: The Ultimate Con Job.
- Section V. An End to Business as Usual?
It's in Section V (two chapters) where he discusses how to reform this
terribly corrupt, totally abusive system.
Now, one odd thing about this book. Though it does have an index (which
is nice), it does not have a bibliography. So when you get to the end and
find this, what are you to make of that?
In my own case, I have read dozens of cited/sourced papers and articles
about the 2008 financial meltdown. Actually, I was reading about this
corrupt, unaccountable system of bad players long before this meltdown
happened. I was not at all surprised when it did happen. I was surprised it
took so long. Jerome St Cyr said back in the early 1990s it was a casino and
a house of cards, and that was before computerized day trading came on the
I have also watched several video documentaries about this system and
about this meltdown in particular. As suggested earlier in this review, I
also watched the movie "The Big Short" and we normally don't count movies as
sources but that movie was quite faithful to the facts.
Nothing that Faust presented has even a whiff of make-believe. I didn't
take the time to look up the many points of data he presented, but I was
already familiar with them having read them from cited sources. I'm a pretty
critical guy (some of my reviews are downright brutal), but I have no
The body of this book consists of 341 pages, all of them expertly written.