Good Bye Edward Jones
I thought this was funny.
EDJ days are numbered. Unfortunate for those who are still drinking the cool aid and too intoxicated to look at the brutal facts:
1. Jones will have approximately $700 mil in capital after the fine.
2. California AG wants $300 - worst case capital goes to $400
3. At least Two other class action suites for $100 plus each....worse case scenario capital goes to $100 million
4. Negative broker growth in 2004!
5. More embarrassing bad news around right around the corner that the GPs in St. Louis this weekend refused to accept as imminent! Too busy in the Cigar Club at The Ritz! Spending the cash the reps have bilked out of their clients.
6. Brokers leaving, revenue leaving, plaintiff bar lining up full scale assalt on the capital base.
7. Investors can buy Ishares for the same returns as the preferred funds. Who needs a Jones broker skimming their cash?
8. It was easy for Bachman and anyone else to look good in the market from 1980 through 2000. Those days are over for ever!
9. The brokers who finally wake up from this wet dream shop their books to the highest bidder or go indy and dissappear with whats left of the client assets.
10. Fist time any company went from top 10 one year on the Best Places to Work List to out of the top 100 the very next year.
My prediction ... Game Over...EDJ greed will put them in the same boat as other greedy arrongant companies like Drexel, Enron, General American ....insolvent and bankrupt.
Remember what Enron was saying about 6 months before bankruptcy....Ken Lay was saying "We have a PR problem". Dick Liddy of General American was "Blaming the Rating Agencies" for their problems...2 months later ...Regulatory shut down and fire sale to MetLife. Drexal GPs all cashed out the best they could and then "set their barn on fire"
You know you Jones guys can not "wish" these problems away. GPs got greedy and arrogant then decided it was OK to violate client and broker trusts, just wait to the next BIG thing to hit the news.
Can anyone recall any financial service that survived a death spiral of capital under attack, brokers leaving, while the GPs sip champagne at the Ritz.
Anyone dispute these facts?
Prediction: Jones will not see December 31, 2005!
Whoops! Give him credit though... he saw the difficult times ahead for the brokerage firms... he just picked the wrong one and forgot to mention the mortgage debacle everyone else is caught up in. Wonder where Lance Legstrong is now because I'm sure Jones would be willing to take a look at his resume.