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American Manufacturing Returns & Wall Street Prospers

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A rich man started a corporation called USA Manufacturing Inc. and as its first endeavor he went to auctions buying the last 10 rare postage stamps of a limited run variety. The stamps were very valuable with collectors because they were the last 10 from the original lot of 100 miss-made stamps printed with the denomination upside down. At each auction the corporation paid more to win the stamp and when all 10 were owned by the corporation, it had expended $10,000,000. So when USA Manufacturing Inc. went public, it sold 49% of its stock for $4,900,000. During the first quarter of its operation, USA Manufacturing Inc. built no factories, hired no workers and just performed one act. It burned one of its 10 stamps and then had the remaining nine stamps appraised. Since each of the remaining nine stamps were then scarcer than each of the original ten, their gross value increased from $10 Million to $12 Million. The first quarter's earning report came in way over the stock analysts' expectations and USA Manufacturing Inc.'s stock's gross total value rose to $15 Million. In the next quarter, USA Manufacturing Inc. publicly burned one more stamp and the value of the remaining eight stamps were appraised at $15 Million. That quarter's earning report again beat the analysts' expectations and the stock's total value rose to $20 Million. After 2 years of quarterly stamp burnings, USA Manufacturing Inc. had earned(?) 30 Million dollars (on paper) and with a P/E of only 10 was worth $300 Million. In the ninth quarter, the CEO burned the penultimate stamp, leaving the last remaining stamp with a value of $45 Million and causing the stock to rise to a net value of over 450 Million Dollars. The CEO who had founded the company then quickly sold his 51% for a little over 200 Million and for the first time demanded his annual salary of 20 Million Dollars (retroactively) which of course could only be raised by selling the last stamp, leaving a little over $5,000,000 in the company coffers. As the stock holders cashed out, the stock's value plummeted, so the first to cash out made a nice profit (300 to 400%), but the last out lost from 75% to 100%. USA Manufacturing Inc. declared chapter 7 and the remaining money was spent on liquidation expenses including legal fees and court costs.

And let's not forget the Wall Street firm Golden Sacks, who bought much of the stock at the IPO (Initial Public Offering) and sold it as its price was going up to its clients, making both a profit and a commission on every sale while making bets on the company failing (and the stock dropping) by buying Credit Swap Defaults, an unregulated form of insurance. The stocks sales, the Credit Swap Default sales, and all the other money transactions were included in the Government's Gross Domestic Product figures, indicating great wealth being produced. If you divided the amount of money being reported to the government by the number of American Citizens, it showed that there was an increase in America's Annual Gross Domestic Product Figures of over $5 per person, but what was actually created? Nothing! In fact, 9 stamps were destroyed. And the clients fooled by Golden Sacks and the working people who's 401k's had money invested in funds that bought USA Manufacturing Inc stock all lost money, but the CEO of Golden Sacks and the CEO of USA Manufacturing Inc. both made out like(?) Bandits and many of the stock traders at Golden Sacks received huge bonuses to go with their already ample salaries and commissions all derived from the destruction of 9 stamps.

That could never happen. Right?? Not in America! Right?

FreddieVee

That's the long version. The short version for using on web-sites with a 250 word limit is:

A rich man started the USA-Manufacturing Corporation and bought the last 10 stamps of a rare variety at auctions, investing $10,000,000. USA-Manufacturing went public and sold 49% of its stock for $4,900,000. During the first quarter of its operation, USA-Manufacturing built no factories, hired no workers, but burned one of its 10 stamps and the remaining scarcer nine stamps' appraisal increased from $10,000,000 to $12,000,000. The first quarter's earning report beat the stock analysts' expectations and USA-Manufacturing's stock's value rose to $15,000,000. In the next quarter, they burned another stamp, the remaining eight stamps were worth $15,000,000 and the stock's total value rose to $20,000,000. After 2 years of quarterly stamp burnings, USA-Manufacturing had earned(?) 30,000,000 (on paper) and with a P/E of only 10 was worth $300,000,000. In the ninth quarter, the CEO burned the penultimate stamp, leaving the last stamp with a value of $45,000,000 and the stock's value was $450,000,000. The CEO sold his 51% for $200,000,000 and collected his annual salary of $20,000,000 (retroactively), raised by selling the last stamp, leaving $5,000,000. USA-Manufacturing declared chapter 7 and $5,000,000 was spent on liquidation.

Wall Street's Golden-Sacks, bought the stock at IPO and sold it as its price increased, while betting against the company buying Credit Swap Defaults, an unregulated form of insurance. The transactions were included in the GDP, but what was actually created? 9 stamps were destroyed. Stock clients lost! The CEO's of Golden-Sacks and USA-Manufacturing got richer, and stock traders received huge bonuses.

 

I was born in Brooklyn, NY in 1945, worked as aircraft mechanic for 35 years and moved to Florida from Brooklyn in 2003. My wife and I will celebrate our 42nd wedding anniversary this year. Our only son is 41, married and has one daughter, plus his (more...)
 

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If it was not so sad. As silly as the article is, ... by Freddie Venezia on Sunday, Apr 25, 2010 at 3:34:54 PM