But the question is…
Why didn’t others, particularly the mainstream financial press and Wall Street, see what was so obvious to my team and me?
How could anyone have missed the fact that General Motors couldn’t make enough money selling cars to pay the interest on its existing debts and its pension obligations?
How could anyone in finance have missed the fact that Fannie and Freddie were insuring subprime mortgages that were certain to contain hundreds of billions in losses?
How could anyone in the oil business have missed the thousands of new wells being drilled in Texas that were producing huge volumes of new oil?
How could anyone with even a basic understanding of economics not see that unfettered quantitative easing would devalue the U.S. dollar?
These stories were all so big, and their implications were all so obvious that it seems hard to believe that our reporting was extremely controversial at the time.
So why were we able to see these facts so clearly, even when others couldn’t?
I think it’s because what you believe about the world often depends on where you sit.
It’s difficult to be objective about the hand that’s feeding you.
General Electric was a major corporate debt issuer and paid millions in fees to Wall Street’s biggest banks.
It also owned the major financial cable channel, CNBC.
While making millions from GE, which financial institution would go on the record to say the company was another Enron in the making?
Or how about the fact that General Motors and its local dealers were the largest buyers of advertising in the United States?
Virtually every newspaper and every media network needed GM to survive so it could buy more advertising.
Which media outlet could afford to report critically about their management or their declining financial results?
Fannie Mae and Freddie Mac sat squarely in the center of the entire global financial system…
Who would warn of their impending collapse without risking a global financial panic?
As the European Central bank chairman said during the financial crisis, when a problem is serious, “you lie.”
But we didn’t lie. We didn’t have to.
You see, virtually every media outlet has some obvious bias that greatly distorts the facts they report.
That’s a huge problem.
What investors need to be successful is objectivity.
Investors must know the numbers and they must know what they mean – even if the truth threatens a powerful corporation or a popular philosophical theme.
That’s why my team and I pioneered a new mode of financial thinking that operated independently from Wall Street and the mainstream financial media.