Chapter 1. "Deal With It!"
I believe that banking institutions are more dangerous to our liberties than standing armies.
"Take it, Phil, it's free money," my broker said.
Free money? This is a joke, right? Is this some kind of broker humor? Where's the rim shot? He's never shown much of a penchant for levity. So I asked with complete sincerity, "Are you kidding?"
"Not a joke," my broker replied, sounding as if my skepticism is tweaking his sensitive soul. "I'm trying to get you into auction-rate securities. A really good deal," he said in a confidential tone, as if he were handing me a key to a secret treasure. He went on to explain that auction-rate securities are "cash equivalents. Completely liquid. Safe as U.S. Treasury bonds—and with a higher yield."
Cash equivalent? What, exactly, did he mean?
"Like I said, it's just like a money market. You've been trading stocks forever. Don't you get it?"
I'm skeptical. The tricky little catchphrase, "cash equivalent"—it has an odd, not quite tangible ring to it. As far as I'm concerned there's cash, the green "In God We Trust" paper you stuff in your wallet, and no real equivalent.
Still skeptical, I ask for a prospectus. This elicits a gruff little chuckle from my broker. His laugh has the indulgent tone of a parent whose toddler asks why the sky is blue.
"Trust me," the broker sighed. He's impatient with my questions.
I hear his cell phone chirping in the background. Seems it is always chirping. The caller must be ...