When Trusting Others Goes Terribly Wrong

Tragic, flawed and beloved--US Grant
Tragic, flawed and beloved–US Grant

“Without a word, the general turned and slowly stumped his way back out of the office, past the silent reporters, into the elevator that carried him upstairs to his office at the Mexican Southern Railroad. He stayed there all alone, till five o’clock, when he called for George Spencer, Grant &Ward’s clerk.

“Spencer found him slumped behind his desk.

“‘Spencer,” he murmured, “how is it that man deceived us all in this way?”

“The clerk had no answer.

“‘I have made it the rule of my life to trust a man long after other people give him up.” the general continued. “But I don’t see how I can ever trust any human being again.”

He buried his face in his hands.

When Grant left home that morning he had believed himself a millionaire. When he got home in the evening he had $80 in his pocket. His wife had another $130. There was nothing else.”   A Disposition to be Rich by Geoffrey C. Ward

I’ll admit it. I love US Grant.

 

 

The Best-Hated Man in the United States

I wish Jon Corzine were here.
I wish Jon Corzine were here.

A sad tale of corruption and naivete: A young man of 28, Ferdinand Ward proposes opening a brokerage and banking firm Grant & Ward with $100,000 investments from President Grant and his son Ulysses “Buck” Grant, Jr.  The father/son team assumes that profits earned with the investments taken in from veterans and millionaires will be shared 50/50.

Like his father Buck Grant looks gentle and melancholy.
Like his father Buck Grant looks gentle and melancholy.

You know what happens when you assume, don’t you? People do it all the time. There’s no evil in money. It’s just paper, gold or cattle being traded for man hours of work or goods you have a hankering for. Is there evil in stupidity? Not sure.

Do we assume there’s enough money in our bank accounts to cover us in a run? Is it possible for the FDIC to cover all the money printed? Do we believe there’s real gold backing paper gold? Do we shake our heads at President Grant’s silly trust in Wall Street scoundrel Ferdinand Ward’s Ponzi scheme that left the military hero (dying of cancer) broke and unable to support his family?

Maybe we shouldn’t. I often wonder how people do  evil things un-apologetically. They must rationalize their actions, right? Someone who believes in survival of the fittest actually has a better chance at convincing himself that there’s no such thing as evil, but many Christians, Jews, new-agers and Muslims commit acts of evil and many more of us are just plain ignorant of finance (myself included). People used to say I was foolish to keep my money in my Levi’s pocket–I didn’t have enough to open an account anyway. But maybe I wasn’t so misguided.

If only one big bank goes under is it possible to payout this much insurance?
If only one big bank goes under is it possible to payout this much insurance?

Young Mr. Ward must have had some charm. He convinced big bugs to finance his scheme and made some money for himself. He got caught, however and landed himself in jail–over 6 years in Sing Sing. He was called the best hated man in the US.

Who do we bother to hate now? Justin Beiber for being a spoiled, rich-kid who got that way using a talent people loved until last week? A kid with crappy parents? What about hating Jon Corzine who “lost” a billion dollars of customer money? He’s a pretty good candidate if you like your villains reckless, inept (supposedly),  unrepentant and free as a bird.  That’s how I like mine. An evil jerk usually remains free and sometimes admired these days and probably always. We live vicariously through them (though we probably hate to admit it) and they happen to be the easiest characters to write about.

Some of us are too big to fail.
Some of us are too big to fail.
Would you trust this man?
Would you trust this man?
Never trust a man who points to someone in the crowd.
Never trust a man who points to someone in the crowd.

Spitballs, Spray Guns and Stock Brokers–When Working On Wall Street Was Wacky

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http://www.bloomberg.com/news/2013-04-01/how-traders-pranks-were-once-routine-on-u-s-exchanges.html

This post goes out to Terry who judging by his about page is a true Jack-of-all-trades at http://araneus1.wordpress.com/about/

He has three blogs and some very cute dogs.

Thanks for taking the time to explain a bit of the market to me!