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Wirecard – The “German Enron”, and a personal history

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Re: Wirecard – The “German Enron”, and a personal history

#71

Post by toohotatopic »

dr_faustus wrote: post #31
newsclues wrote: post #28

Earlier quoted context omitted.

How many times will we need to learn that the audits and auditors are not always doing a good job?

substitute "not always" with "almost never". Edit: The problem is that companies get to pick their auditors. Since the auditors sell a homogenous product (it doesnt really matter, who signs off you yearly report), the only way the big four accounting firms can compete is by being cheaper and/or more "favourable" to the customer. Both not that great for the customer (which actually should be the shareholders and in re…

Shouldn't there be a market for a tough auditor? Now a healthy company has a hard time convincing investors that there are no hidden problems. With a tough auditor, you could gain more trust and thus cheaper interest rates.

Re: Wirecard – The “German Enron”, and a personal history

#72

Post by mrmuagi »

intuitionist wrote: post #67
Nextgrid wrote: post #45

Earlier quoted context omitted.

> they also are a profitable business that sells stuff that people want to buy [citation needed] Just like the other MLMs (or rather pyramid schemes, because that's what they really are), they sell a (unprofitable) lifestyle using deceptive marketing. The products are secondary (they're just there to keep regulators at bay) and are always sub-par and inferior to what can be found off-the-shelf.

There’s nothing illegal, or inherently unprofitable (for the business), about selling people a lifestyle. Louis Vuitton sells people a lifestyle. Harley-Davidson sells people a lifestyle. Apple sells people a lifestyle. All of these companies have products, sure, but the products aren’t really the point.

It is illegal when the product makes serious health claims not backed by scientific research. The more insidious cases of this relate to cancer or covid 'cures'.

Re: Wirecard – The “German Enron”, and a personal history

#73

Post by ves »

MrBuddyCasino wrote: post #54
piva00 wrote: post #27

Earlier quoted context omitted.

It signals to a lot of us that there are very different rules when playing on the "elite" level of the economy. When you amass power enough through capital our current system definitely tips over to be lenient against them, and the longer I live the more I feel it's not necessarily by design but definitely this hole is left open in the capitalist system on purpose. This is one of the reasons why I feel that over time…

> "eating the rich" Thats an unfortunate side-effect of a weak justice system. I believe the "eating the rich" attitude is very unhelpful. We need entrepreneurs, we need startups. If rich people are the problem, that would mean that every time a new business is founded, the world becomes a little worse. This is obviously not the case.

Founding a business doesn’t necessarily make you rich.

Re: Wirecard – The “German Enron”, and a personal history

#74

Post by gruez »

toohotatopic wrote: post #71
dr_faustus wrote: post #31

Earlier quoted context omitted.

substitute "not always" with "almost never". Edit: The problem is that companies get to pick their auditors. Since the auditors sell a homogenous product (it doesnt really matter, who signs off you yearly report), the only way the big four accounting firms can compete is by being cheaper and/or more "favourable" to the customer. Both not that great for the customer (which actually should be the shareholders and in re…

Shouldn't there be a market for a tough auditor? Now a healthy company has a hard time convincing investors that there are no hidden problems. With a tough auditor, you could gain more trust and thus cheaper interest rates.

That would have to be on the investor's side, otherwise the incentives aren't aligned.

Re: Wirecard – The “German Enron”, and a personal history

#75

Post by deleuze »

mrep wrote: post #64
deleuze wrote: post #55

Earlier quoted context omitted.

I mean, yeah, as you point out with TINA, can you really blame them? When the Federal Reserve essentially states that it will engage in any amount of QE to keep equities afloat, how is that not a pyramid scheme?

How do you get that? The FED is mostly just buying our own governments debt through treasury securities and citizens home debt through mortgage back securities [0]. They haven't touched equities and have barely purchased any corporate bonds. [0]: https://www.federalreserve.gov/releases/h41/current/h41.htm

I never said they were buying equities. Buying bonds and pushing rates to 0 still has an impact on the TINA attitude. of the market. And, in more direct ways, if you buy junk bonds from me, then I go turn around and buy equities, it's just the Fed buying equities with a few more steps in the middle.

Re: Wirecard – The “German Enron”, and a personal history

#76

Post by Nextgrid »

intuitionist wrote: post #67
Nextgrid wrote: post #45

Earlier quoted context omitted.

> they also are a profitable business that sells stuff that people want to buy [citation needed] Just like the other MLMs (or rather pyramid schemes, because that's what they really are), they sell a (unprofitable) lifestyle using deceptive marketing. The products are secondary (they're just there to keep regulators at bay) and are always sub-par and inferior to what can be found off-the-shelf.

There’s nothing illegal, or inherently unprofitable (for the business), about selling people a lifestyle. Louis Vuitton sells people a lifestyle. Harley-Davidson sells people a lifestyle. Apple sells people a lifestyle. All of these companies have products, sure, but the products aren’t really the point.

Louis Vuitton, Harley Davidson, etc do not give people the illusion of owning their business and do not encourage them to stockpile garbage products in their garage to keep their "status" in their "business". They do not encourage people to con their friends & family into the scam either.

Furthermore, most of these luxury goods have actual value. Even if you are stupid enough to go into tons of debt and fill your garage with Harleys, there will be plenty of buyers who will be happy to take it from you at a small loss. In comparison, nobody will buy a garage full of Herbalife - the cost of shipping would be more expensive than the market value of the product itself.

Re: Wirecard – The “German Enron”, and a personal history

#77

Post by newsclues »

toohotatopic wrote: post #71
dr_faustus wrote: post #31

Earlier quoted context omitted.

substitute "not always" with "almost never". Edit: The problem is that companies get to pick their auditors. Since the auditors sell a homogenous product (it doesnt really matter, who signs off you yearly report), the only way the big four accounting firms can compete is by being cheaper and/or more "favourable" to the customer. Both not that great for the customer (which actually should be the shareholders and in re…

Shouldn't there be a market for a tough auditor? Now a healthy company has a hard time convincing investors that there are no hidden problems. With a tough auditor, you could gain more trust and thus cheaper interest rates.

If enough of the market is cheating then it puts you at a disadvantage if if you aren’t cheating (the fake market sees your fair baseline as a threat to future cheating)

Re: Wirecard – The “German Enron”, and a personal history

#78

Post by MrBuddyCasino »

ves wrote: post #73
MrBuddyCasino wrote: post #54

Earlier quoted context omitted.

> "eating the rich" Thats an unfortunate side-effect of a weak justice system. I believe the "eating the rich" attitude is very unhelpful. We need entrepreneurs, we need startups. If rich people are the problem, that would mean that every time a new business is founded, the world becomes a little worse. This is obviously not the case.

Founding a business doesn’t necessarily make you rich.

Did you have a point besides stating the obvious?

Re: Wirecard – The “German Enron”, and a personal history

#79

Post by mrep »

deleuze wrote: post #75
mrep wrote: post #64

Earlier quoted context omitted.

How do you get that? The FED is mostly just buying our own governments debt through treasury securities and citizens home debt through mortgage back securities [0]. They haven't touched equities and have barely purchased any corporate bonds. [0]: https://www.federalreserve.gov/releases/h41/current/h41.htm

I never said they were buying equities. Buying bonds and pushing rates to 0 still has an impact on the TINA attitude. of the market. And, in more direct ways, if you buy junk bonds from me, then I go turn around and buy equities, it's just the Fed buying equities with a few more steps in the middle.

Or they could sit on the cash which many people do in a recession. And again, they've barely touched junk bonds. They are mostly just buying our own governments debt through US treasury securities, the same kind that the US government has created and sold 3 trillion dollars worth this year [0], mainly to fund the CARES act.

[0]: https://www.treasurydirect.gov/govt/reports/pd/pd_debttothep...

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