The biggest challenge facing the US, and also in Canada and Europe, is corruption. The failure to have effective securities law enforcement has created a regime of intense corruption. When you allow white collar criminals unlimited access to cheat steal, it should not surprise anyone that they will go out and cheat and steal. Take naked shorting for the best example. You sell a stock that you have not borrowed from someone else, and therefore a failure to deliver occurs on the settlement date. This is fraud, pure and simple, and its easy to enforce the rules. Any brokerage house that has a failure to deliver on a trade is immediately suspended from doing any further trading until that is cleared. Simple and effective, and the problem would stop the very next day. But it is not going to happen because we have inept securities enforcement on both sides of the border, and the criminals involved are making a huge amount of money on the scam. The REASON why we have inept enforcement is BECAUSE the criminals are making so much money, and paying off the government insiders to make sure that no one is really doing much about enforcement. This is the essense of corruption, and its widespread.

Sure the majority of people are good people that want to do the right thing. That does not matter in our system because the ones at the top that can effect real charge are corrupt and only interested in their best interests, not that of society as a whole. Corporate governance is a joke, and therefore you have weak leadership gaining huge compensation and bonuses even while they are running companies into the ground. When AIG went broke and got hundreds of billions in bailout funding, the top management was still cashing multi-million dollar bonus cheques on top of their obscene salaries. The old boys that staff the BODs and run these corporations are also corrupt, and interested only in feathering their own nests instead of doing their jobs and protecting the interests of shareholders.

Now add in the final layer of corruption, at all levels of government. The people that make the laws and make policy decisions are not stupid. They know the problems we face and understand that we are on a path to collapse. However they too are corrupt and more interested in their own interests than in securing the future for the countries they are running. Buying off voters with entitlements, printing money, running up huge debts, encouraging unsustainable public policy - all of these decisions by government leaders are doomed to fail and they know it. But they will continue to do so until the system collapses because to do otherwise would jeapordize their own interests to stay in power and make huge money along the way for themselves.

Where does the corruption end? I would like to see effective securities law enforcement, and have the crooks rounded up and thrown in jail. I am sure many others on this forum would agree. But we are powerless to enact this. I sell stock in any company that I see management is overpaid and acting against shareholder interests, but it does not matter because millions of shares are held by institutions and they vote the same crooks back on the BOD every year, they want stability more than effective governance. So nothing changes. And we can vote for people we think are going to change government but its just new crooks that take over from the old ones, and go right about feathering their own nests again. Nothing changes.

Until more people choose to educate themselves and refuse to accept this, nothing is going to change. People are ignorant and disinterested. The only time there is any outrage at all is when one entitlement or another is threatened. They are dependant on the system that is killing them. They want the easy handouts and will tolerate the corruption that goes with it all, instead of taking responsibility for their own wellfare, and taking action to effect change. Nothing is going to change when the majority of the population is stupid, lazy, and dependant.

I am not saying the situation is hopeless. But I do believe things are going to get very ugly to bump the general population into the state that change will be possible. The system is not sustainable, and eventually the entitlements that have been promised will default. Then and only then will people rise up and challenge the crooks that have been raping the markets. Only when things have hit rock bottom will there be a motivation to uproot the criminals and change the system.

cheers!

mike