Millions of American investors lost billions of dollars or more in the 2008 mass housing and financial frauds.
But very few people have taken the time to investigate why they lost money and what the U.S. financial services industry did to help create the crisis or prevent it from happening.
Author Bruce Gauthier is an exception. He is a self-proclaimed amateur investor who lost his entire life savings in the 2008 market decline and its ongoing aftermath. He was so enraged at the system that he penned a book, Santa Claus is Alive and Well and Living on Wall Street (iUniverse Press, 2011, 157 pages, $12.95).
So Much for Trusted Advisers
Bruce says this book was written for average investors, and his presentation examines the key people and policies that encouraged him to invest and remain invested, even when his “trusted” advisers were encouraging him to remain invested. His discovery takes him through Wall Street’s monolithic process of building confidence in the investment world, even though profits generally flow from individual investors to larger investment firms.
In his personal journey, he describes the fraud and bad investment advice he received that jeopardized his assets, even as they continued to generate commissions and fees for his advisers.
The book also names the key individuals who helped promote the flurry of investments through the housing and mortgage credit origination fraud. Among the culprits were U.S. Treasury Deputy Secretary Lawrence Summers, the Federal Reserve, the 791 U.S. corporations that shipped jobs outside the nation, and the SEC.
Gauthier identifies people who did recognize the investment crisis early but were ridiculed for their positions. Among them is Peter Schiff, who appeared in a TV interview in 2006 and told of the impending financial explosion but was criticized by co-panelists economist Ben Stein and Art Laffer, an economic consultant to Ronald Reagan.
Reading that interview transcript today is unsettling since Schiff was on-target but was bucking the conventional Wall Street wisdom that the economic expansion would continue well into the future. It failed to last two more years and dissolved into the worst economic collapse since the Great Depression.
This is a personal account of one investor’s education about losing money. It is also a book for amateur investors, so it has significant explanations and reasons why the author’s faith in the financial services industry was destroyed.
Gauthier’s book has footnotes, citations, and verbatim testimony to explain his basic premises and rationale. He weaves his experiences and then uses public events, news accounts, articles, and testimony to make a robust case about what went wrong and how it wasted his portfolio. The book’s title (which could be improved) comes from Gauthier’s disillusionment with Wall Street and how it misrepresents the futile attraction of building wealth through the current investment services industry.
This makes for an informative short book that is very suitable for many investors. It should be part of a growing list of accounts by amateur investors about how the system failed them and did not help them achieve their financial goals, despite industry claims that wealth management is the core focus of the financial services industry.
At $12.95, less than the price of many stock commissions, this is an entertaining, educational, and affordable book for the holidays.
