Why Wall Street Needs Sunday School?

First it was the tanking of Bear Stearns in March. Then it was the promise of Lehman Brothers. Fannie Mae's promises, Washington Mutual's promises, Indy Mac's promises, etc....

A trillion dollars in write-offs from the sub-prime crisis, and more looming ahead?

" When sorrows come - they come not single spies- but in battalions " says Shakespeare's Hamlet.

Then comes well respected CEO of Merrill Lynch John Thaine, who had virtually guaranteed in April that Merrill would need no capital assistance. Thaine emphatically repeated that Merrill would take one write-down of 6 billion dollars and had no need to dilute shareholder wealth again. Shareholders were assured the big problems were over! They had a respectable man's word and an expert analyst at markets working on their behalf.

What happened next? End of July after the markets closed, Merrill Lynch decided to give a bath to Merrill shareholders. Thaine surprisingly announced the need to raise 8 billion dollars, sell assets, and deliver 30 billion dollars of mortgage debt to a Dallas-based company for 6.7 billion dollars. Its over. Merrill now for sure has no further need to write down assets, or raise capital- right?

Why such a lack of transparent honesty? Men of character and quality are supposed to march up the ladder of corporate success. They aren't supposed to be cheaters and liars. To lie and cheat all the way up will sooner than later disembowel your career, it would seem.

How did we get to where we are? Where little guys are looking at the Captain's of Industry and Finance trusting each word from there mouth with the little guy finding out that he has been sold swamp land?

Where is the Sunday School that used to teach us right from wrong? Where conscience, God, meaning, purpose, and destiny could be aroused and counted on to lead our children through adulthood.

Benjamin Franklin's admonition, "Sell no virtue to purchase wealth".

Seeing Bernanke, Greenspan, Thaine, etc...walk a tight rope of American global finance, we see that virtue in modern day 21st century America indeed does have a price. Greenspan writes a book absolving himself of the housing and credit crisis that began under his watch. Bernanke bails out Bear Stearns midnight on a Sunday and states that all is structurally sound nonetheless in American finance. Apparently, there is a a price at which virtue can be sold. The result of such complete breakdown of honesty in America?

The financial system is distrusted. With the dollar teetering at all time lows wanting to break down completely, an economy having a drunken man's hangover from the eight year party, CEO's are forced to make gutsy decisions that will mark them for life.

Will these men of power tell the board, shareholders, and CNBC what everyone wants to hear? Or will truth come from their mouths?

Donald Tomnitz, CEO of DR Horton Homebuilders, stated that 2007 would "suck", expressing the poor outlook for the industry and company. No excuses. No glossing over the facts. No silver lining to hoodwink the investing public. The integrity of a man whose walk with Christ matters was most refreshing.

On the other hand, the multi-millionaire type John Thaines, Richard Thulds of Lehman Brothers, and Jimmy Caynes of Bear Stearns surely have Dante infuriated that he had not the chance to write about them concerning the inferno of eternity? Hoping for government bailouts or a Hail Mary pass, these men have failed their companies, their shareholders, and have destroyed their integrity for many days to come. Instead of coming clean, they waited. Better news...bail out...better markets...better prices...etc...it doesn't matter. They waited!

Trust is built brick by brick thousands of days at a time, but is destroyed in a single day.
Billions of dollars can come and go quickly. Trust and transparency cannot come and go so quickly.

Fixing the credit markets is much more than pricing assets that can't move. Credit markets demand honesty and transparency that has been little forthcoming. When the heroes of capitalism are known for truth more than shading the truth, buyers and sellers will buy and sell again.

With the S&P down 21% since October 2007 and putting in the worst single month performance of 11% down in June since the Great Depression, maybe a little bit of Sunday School honesty could go a long way to improving confidence in the markets?

Cursed is the man who has no crisis from which to grow. In the end, it is not money that we will be remembered for making, but character that we employed in the living of life.