As a shareholder in a publicly traded company, you should not be taken for granted.
Transparency should not be optional.
Shareholders deserve visibility and clarity so they can trust and have faith in the companies they co-own, and in the government entities that regulate the financial policy that mandates corporate behavior and governance.
Faith and confidence should be earned.
When faith is not earned and facts are obscured, visibility clouded, regulatory entities uncertain, the market cannot function properly.
Confidence underpins and underscores all. Without confidence where are we? What is real, what isn’t? Accountability and transparency are the new orders of the day, or how will we survive and prosper in any enduring manner?
Clueless or Contemptuous?
Henry Merritt “Hank” Paulson, Jr. (born in Palm Beach, March 28, 1946) served as the 74th United States Secretary of the Treasury during one of the most chaotic episodes in America’s history.
He was a brilliant student, an Eagle Scout, and an All-America football player. He became a partner at Goldman Sachs in 1982, and left to assume the cabinet post of Secretary of the Treasury in George W. Bush’s administration.
In a Rolling Stone article in 2011, Tim Dickinson applied the construct of “crony capitalism” to Paulson’s generous revelation to Wall Street “titans” at the hedge fund offices of Eton Park Capital Management LP in Manhattan. Paulson spilled the beans: the government was going to nationalize Freddie Mac and Fannie Mae.
According to Bloomberg News, Paulson shared this information with his cronies on July 21, 2008. On July 13 he had told reporters that “the firms [Freddie and Fannie] must remain shareholder owned and [he] had testified at a Senate hearing two days later that giving the government new power to intervene made actual intervention improbable.”
Was Hank Paulson clueless or merely contemptuous in his sharing of “insider information” with his cronies?
Technically, he may not have actually broken the law; but his betrayal of trust will be etched on our cortexes in perpetuity. How would Alexander Hamilton, our first Secretary of the Treasury, have conducted himself in Hank’s position? Superb legal scholars and financial history buffs will be studying these issues for a long time.
Money & Trust
Surrealism was a cultural movement that thrived in the 1920s in France. Unexpected juxtapositions, non sequiturs, and surprise were the orders of the day. Unwittingly, Andre Breton foreshadowed the “Dance” on The Street nearly 100 years later.
Money and trust are fundamental constructs in our culture. In 1956 “In God We Trust” was adopted as the official motto of the United States. In God We Trust has appeared on U.S. coins since 1864 and on paper currency since 1957. Salmon P. Chase, Lincoln’s Secretary of the Treasury during the Civil War innovated this slogan for coinage; quite the contrast to Bush’s secretary of state. Surrealism at its finest; real life is indeed stranger and juicer than fiction.
Hypnagogic comes from the ancient Greek hypn “sleep” and agogos “inducing, leading.” After the horror, shock and rage, the average shareholder has to crash when he reads about the tales of The Street. What other “tales” lay in wait for the shareholder community? How much more can we “digest” before we literally pass out?
Activism is as American as apple pie. It is part of our heritage. We fight for what we believe in. “Don’t just dispute: contribute.” This is The Shareholder Activist’s battle cry; shareholders must stand up for themselves or they will perish.
Thirty thousand Enron employees watched their pensions evaporate before their very eyes because they trusted blindly.
For investors, faith without visibility and clarity can be a tragic combination.
