{"id":474,"date":"2010-08-17T11:19:00","date_gmt":"2010-08-17T15:19:00","guid":{"rendered":"http:\/\/www.intuitiveinvestor.com\/web\/?p=474"},"modified":"2018-08-17T15:44:09","modified_gmt":"2018-08-17T19:44:09","slug":"more-financial-industry-shenanigans","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2010\/08\/17\/more-financial-industry-shenanigans\/","title":{"rendered":"More Financial Industry Shenanigans"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">Today&#8217;s Wall Street Journal has a fascinating article entitled, &#8220;Beware of &#8216;Independent&#8217; Investing Research.&#8221;\u00a0 The story demonstrates the increasingly intimate relationship between the financial services industry and financial academia.\u00a0 Wall Streeters are sponsoring university &#8216;research&#8217; that, not surprisingly, supports particular products that they are attempting to sell to consumers.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Criticisms raised in the article include:<\/span><\/p>\n<ul>\n<li><span style=\"font-size: 16px;\">The nature of the relationship between the Wall Street institution and the academic institution is often not disclosed, and when it is disclosed it is\u00a0in small, difficult to read print.<\/span><\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-size: 16px;\">Academic institutions and their professors rely upon corporate sponsorship for their programs, an obvious conflict of interest.\u00a0 The justification for the buddy-buddy relationship is a good one: academics are often accused of not being close enough to the &#8216;real&#8217; world.\u00a0 However, listen to this casual dismissal from an academic where a conflict of interest is apparent: &#8220;The connection to business is desirable.\u00a0 I don&#8217;t think we want to sever that on the altar of conflict of interest.&#8221;<\/span><\/li>\n<\/ul>\n<ul>\n<li><span style=\"font-size: 16px;\">Academia has supported some of the industry&#8217;s most controversial products, including sub-prime mortgages and derivatives.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\">One of my main concerns is that even if a professor maintains the right of creating an\u00a0objective report\u00a0and is indifferent to her\/his institution being given $50,000 for research, isn&#8217;t it understood that <em>future<\/em> &#8216;research&#8217; dollars will only be forthcoming if the professor agrees with the point of view of the institution sponsoring the research?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Another of my concerns is that academics have demonstrated over and over again that the overwhelming majority of\u00a0people\u00a0in the Western world\u00a0can most effectively be incentivized financially.\u00a0 Yet, they seem to hold themselves out as the sole exception to the nearly certain relationship of better work for better pay.\u00a0 C&#8217;mon!<\/span><\/p>\n<p><span style=\"font-size: 16px;\">But my biggest concern is that consumers are only ever likely to see the research that affirms the position of the firm trying to sell you its product.\u00a0 Assuming the academics are correct and they can maintain their objectivity and actually publish a negative report, then why aren&#8217;t those sent out with product marketing materials?\u00a0 Isn&#8217;t it friggin&#8217; obvious?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">My friends, the financial industry&#8217;s corruption runs deep.\u00a0 Remember this as you live your lives.\u00a0 The financial industry will likely always need a heavy regulatory hand to stem abuses and outright corruption.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Today&#8217;s Wall Street Journal has a fascinating article entitled, &#8220;Beware of &#8216;Independent&#8217; Investing Research.&#8221;\u00a0 The story demonstrates the increasingly intimate relationship between the financial services industry and financial academia.\u00a0 Wall Streeters are sponsoring university &#8216;research&#8217; that, not surprisingly, supports particular products that they are attempting to sell to consumers. Criticisms raised in the article include: [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-474","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/474","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=474"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/474\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=474"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=474"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}