Kelly Ann Thomas – “Is your bank trying to keep you from fleeing the markets?”

http://www.picassodreams.com/picasso_dreams/2008/09/is-your-bank-tr.html

Is your bank trying to keep you from fleeing the markets?

Kelly Ann Thomas | September 19, 2008

I am very fortunate in many ways. It’s hard to complain when you are handed gifts of fortunes that just happen to be worth a fortune.

I was adopted by my step-father when I was seventeen. I hadn’t known him all that long before my sisters and I were adopted, but he was a good person and much needed in my life at that time. My father was killed a year later, a scene from a bad soap opera. I didn’t know that I would receive a trust fund upon his death. He mentioned inheritance a few times, telling us kids would be rich when he was dead. It was an odd thing to say. I knew there was family money, but no other details.

Each month I receive dividends from trust funds that I became heir to upon my father’s death. It’s enough that I have a little more freedom to say no to bad working conditions, not enough to change my socioeconomic position. It truly is a blessing. I try to do good things with the money.

As such, I have often been reticent about speaking out when I saw the trusts managed in a way that cause me embarrassment when showing the portfolio to financial professionals. My trusts were and are invested in stocks and bonds that do not meet or exceed the rate of inflation. Some call it conservative, some call it prudent, and some call it a loss. I suppose it depends upon your perspective, which leads me to the point of this missive. I feel fortunate to have this money, so I have remained quiet until now.

I am at odds with PNC Wealth Management, the current fiduciary trustee of my trusts. The gang at PNC and one of my trustees unanimously agree that the U.S. economy is not going to crash, the stock market is not going to crash, that there might be a few hardships here and there, but they have full faith in the economic recovery of the United States. I had a conference call yesterday where I was tag teamed by five people from PNC and one trustee, but in the end, not one could substantiate why the U.S. economy would turn around. They are repeating the mantra of their Chief Investment Strategist and their pathetic monthly Investor Outlook newsletter. “We can send you a copy of our analysis,” said a few, “But you have already made up your mind.”

Damn right I have! Just weeks before the implosions of Fannie and Freddie, Lehman Brothers and AIG, their Chief Strategist was telling clients that these market fluctuations were just a result of irrational fear. He even had the audacity to quote Hunter S. Thompson. How I wish I could emulate his prose for this piece. Unfortunately, I don’t have the newsletter because my cat left a giant yellow hairball on the paper. Who says animals aren’t capable of analysis?

I want to continue to have a check each month, which is why I want my portfolio liquidate and be moved into gold stored outside of the United States. That is the most defensive position I can take in these worthless markets.

The short of it is that PNC will not do this. They said even if my other trustee agreed, they would not do it. They tried to toss around legal reasons, but the trusts have no limitations as to how they may be invested – real estate, stocks, bonds, business start ups – all are valid investment instruments. PNC Wealth Management tried to claim that according to Pennsylvania law, they couldn’t invest my trust in gold because it was “speculative” and “risky” and not diversified. However, there is no law that supersedes the trust, and the trust does not prohibit such an investment. Nor is bullion speculative. I already know this, as I have spoken with other banks about my investment desires and they had no problem with my portfolio recommendations.

In essence, PNC lied to me when they said they were prohibited in investing my trust as I wanted.

They no doubt think I am a belligerent buffoon, a Mogambo Guru wannabee incoherently speaking in manic run on sentences and wildly interrupting them because my head felt just like the JP Morgan derivatives portfolio. Surely an aneurism was coming on as I paced wildly back in forth across the back patio of my store, screaming in to the telephone. “I respect your opinion,” mocked the patronizing guy. I wanted to reach through the satellite signal and slap a pile of cash in front of him and say, “Put your money where your mouth is. How much of your own savings do you want to wager on the likely recovery of the U.S. economy?” I mean, it would be like taking candy from a baby, as this guy said he had full faith in the recovery of the U.S. economy. But I didn’t do that because it is impossible to reach through the skies to slap some money in front of someone, and I wouldn’t be able to just slap some money down because most of what is in my purse is…let’s just say it would take me about 15 minutes to figure out how much I actually had in my purse because I can’t find anything in my purse. It’s gotten out of hand. My purse and my conversation with the PNC gang.

Instead, I loudly proclaimed that one of us is right and one of us is wrong and I have a better track record. Seriously. I have given the bank proposals over the years that would have made HUGE profits, enough to counteract the years of damage from lack of oversight and care on the part of PNC. I asked to invest in gold at $300. I suggested LNG (liquid natural gas) options and positions in Hyundai (shipbuilding for the LNG tankers). I suggested Apple stock just before it took off. More importantly, I begged and pleaded to get out of certain stocks, like Fannie Mae. We got out of Fannie Mae with a loss a few years ago. Five years ago I was telling the bank to dump the stock, that it was a dog. Instead of selling it then and taking a profit, they waited a few years and took a loss. Same with Clear Channel. And BP. Why were we in BP, generally known as the worst oil company on the planet, and not Conoco Phillips? We would have made 100 % ROI had we invested in Conoco Phillips five years ago per my request. I almost forgot Krispy Kreme. It would have been a great stock for the first year, but what did I know, a woman who fantasizes about yeast doughnuts traveling under beautiful sugar waterfall and inserted into my mouth seconds later…

It took my bank a year of analysis before deciding not to buy Yahoo because it was trading to high. In the meantime, we missed 400 percent growth.

Every time they recite their dogma of looking out for my investments and exercising prudence, I want to scream. Sometimes I do scream. In fact, almost nothing upsets me more than dealing with my “free money”. It’s a gift horse and yet those managing my trust are squandering it away by staying in bad investments and staying in the dollar. Oh, the dollar. That brings back memories of when I asked the bank to put on a euro play back when the euro and dollar were at parity. Wouldn’t be prudent. Ten percent ROI per year is not prudent.

I mentioned that one of our municipal bonds was under water. Bonds are safe because you always have the value of the bond, said a male.

“What if the municipality goes bankrupt?”

“You always have the value of the bond.”

“Not if they are bankrupt. There have already been defaults on municipals. Some states are bankrupt. Florida is next.”

If you could only hear the patronizing sighs of the participants. Here this little trust fund baby was telling these fancy drones that municipal bonds weren’t backed by anything. But it’s true. As I said in an earlier letter to Kelly Kelly, my Investment Advisor who parrots the PNC line and will not provide a rebuttal to my points about the economy: “Are you aware that one of our municipal bonds has an unrealized loss? What happens if Arizona, Florida an/or New Hampshire go bankrupt? Where does that leave us? May I claim a stake of an Arizona highway as my own? Maybe I could set up a toll booth and recoup my losses, or maybe I’ll garnish the wages of a state employee in New Hampshire. We have no recourse if these states default on their debt, which is likely.”

No response. Imagine my surprise.

In a few months, the State of Florida is going to have problems making its pension payments. They were heavily invested in Lehman Brothers. Maybe it has something to do with Jeb Bush, who worked with Lehman Brothers. Anything the Bush boys touch disintegrates into bankruptcy after they have raided the companies. Always short Bush employers’ stock an you are sure to profit by the time they leave the company. Is it any wonder that Lehman Brothers went bankrupt then?

The PNC guys think I am off my rocker.

We talk about gold. It’s speculative they say. Traditionally it’s been called a safe haven, and The Times refers to it as such today.

PNC does not want me to own gold.

Someone says using my logic, they should go out and buy a silo of grain and whole up for Armageddon. Thank the dog he was 3000 miles away because I just wanted to bitch slap him. Gold is not speculative. Gold is not grain. Gold has been used as currency for thousands of years. A silo of grain is useless after a year. A silo of gold ensures that you will rule the world. I hope that asshole is the first to lose his job. I hope he has to pay huge alternative minimum tax on worthless stock options from his lousy bank that deserves to go under.

I want to scream. Not only do I want to scream, but I want to scream obscenities because any banker who believes we are not headed for a Depression is a fucking idiot. Yes, I have gone and insulted just about everyone I spoke with on the phone, because obviously I do not value their opinions. I might value their opinions if they had been able to back up their statements regarding the health and recovery of the U.S. economy. I asked. I asked again. And again and again and again. They referred me to the report produced by the Chief Investment Strategist. I said I didn’t want to read the report, that I wanted one person to take five minutes and do a quick run down on how it is the U.S. is going to recover from the collapse of the banking sector and its debt. Silence. Then someone said, “I can’t do that.” Yet I am told to have faith.

This is my frustration. I suggest something that will make the trust money and the bank says no. Then the bank turns around and loses money on trades.

I did end up resorting to profanity, but it was seriously unavoidable. You see, there are no stops on my stocks. Not one. And there is no one monitoring my account. We went a year without an investment advisor overseeing the account! I am pretty sure that is a huge breech of fiduciary responsibility.

I asked what would happen if the market crashed and there were no stops.

No answer. Is this prudent? You have no one monitoring the accounts, no stops and so what happens when AIG or Lehman Brothers takes a freefall? How many PNC Wealth Management clients just lost a large chunk of their portfolio because PNC Wealth Management was too busy collecting obscene fees yet not monitoring the accounts? My recollections are a bit hazy as this point, but I think I said , “There are no fucking stops on my stocks!” and thus heralded the end of the conversation.

We do not need stops because the stock market is not going to crash. I repeat, the stock market is not going to crash according to the boys at PNC, so I don’t have to worry that there are no stops on my account.

“What if you’re wrong and the market crashes?” Silence. They were all probably thinking about their underwater mortgages and the possibility that they would be looking for a job at a Circle K next year.

“The market is not going to crash and we have full faith that the U.S. economy will recover and this ends our conversation,” snapped an agitated man. Well, Mr. Agitated Man, we’ll see about that. In the meantime, Mr. Agitated Man couldn’t give me on example of how or why that would happen, hence the reason he was now Mr. Agitated Man as opposed to Mr. Patronizing Man. I think I won that round. No one could rebut anything I had to say about the U.S. economy, at least with facts and figures as opposed to the wishful daydreams of bankers with manicures.

The good thing is that PNC consented to be released as trustee. The bad part is I may not have a trust fund left to transfer because of PNC Wealth Management’s refusal to grasp reality. If the stock market crashes before I can get away from PNC, I am toast.

I believe that there is huge pressure to keep people from liquidating their portfolios. I was told by one person at PNC that even if both my trustees opted for my gold position, they would stop it. They don’t have the votes to do it, but short of getting a court order, there wouldn’t be much I could do in the meantime.

They said they would stop me from liquidating my account into a cash position. It makes absolutely no sense to stay in a position when you know the economy is going to sink. Both PNC and one of my trustees are betting that the economy will recover. They refuse to capture profits. They refuse to let me liquidate positions now, even thought this is the best time for them to pay the capital gains, as they are at their lowest levels ever. I am the only beneficiary and I have no heirs. I am going to have to pay the taxes someday. I want to pay them now. That wouldn’t be prudent, they say, and with those words, I am about to get screwed.

So I send this out as a warning. I want PNC Wealth Management clients to make sure they have stops in their portfolios. See what happens if you try to liquidate positions. See what happens when you try to put in a stop. What kind of pressure will you get from the bank? How quickly will they make the trade?

As an aside, a friend of ours recently liquidated her U.S. bank account. Her bank manager, whom she considered a friend, went off on her, attacking her for taking her money out of the country.

I promised PNC that I would continue to send them annoying emails requesting they move my portfolio in gold so that when the market crashes, I have some recourse. I want to loudly publicize thatPNC Welath Mangement refuses to admit that the economy is worsening. In fact, their forecasts are the most upbeat of any banks. They are even contradicting Allan Greenspan! I think their positive forecasts are designed to keep people from liquidating their positions. It makes no sense to tell your clients to stay in a bad market and the writing is on the wall…the market is about to go way down. So why stay in stocks? Why did the bank tell me they would fight me if my trustees agreed in just liquidating it into cash?

Something isn’t right here.

I am posting my emails to the bank on my blog, hoping that their contact PNC and demand to know how it is that the United States will recover. Ask to see specifics. Ask them how the debt figures in. Bombard them with information so that you might have some recourse when the market does crash– even if recourse amounts to nothing more than a loud “I told you so”.

This might also be the time to start finding a new fiduciary trustee, because the ones at PNC Wealth Management aren’t doing a stellar job. Just remember, PNC Wealth Management said you don’t need stops because the market isn’t going to crash. They don’t have a plan if the market crashes because the market just isn’t going to crash.

If PNC is wrong and the market crashes, bye bye trust fund.

These are the things PNC Wealth Management is not telling you:

The Federal Reserve is broke.

The Federal Reserve has announced a series of lending and liquidity initiatives during the past several quarters intended to address heightened liquidity pressures in the financial market, including enhancing its liquidity facilities this week. To manage the balance sheet impact of these efforts, the Federal Reserve has taken a number of actions, including redeeming and selling securities from the System Open Market Account portfolio.

The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury’s current borrowing program, which will provide cash for use in the Federal Reserve initiatives.

Announcements of and participation in auctions conducted under the Supplementary Financing Program will be governed by existing Treasury auction rules. Treasury will provide as much advance notification as possible regarding the timing, size, and maturity of any bills auctioned for Supplementary Financing Program purposes.’’
“The Treasury is setting up a temporary financing program at the Fed’s request. The program will auction Treasury bills to raise cash for the Fed’s use. The initiative aims to help the Fed manage its balance sheet following its efforts to enhance its liquidity facilities over the previous few quarters.”
http://www.webofdebt.com/articles/its_the_derivatives.php
The FDIC is broke.
How many banks will go under? It’s hard to say. Regardless, as of January 1, 2008, the FDIC had $52 billion. Now it says that the Washington Mutual collapse could wipeout the fund.
The US government is broke.
Our national debt is $9.2 Trillion dollars, and growing each day. Unfunded liabilities – pensions, Social Security, Medicare, municipal bonds -are estimated to be $90 trillion and growing. That equates to more than $388,000 per American citizen. That’s assuming no other catastrophes pop up and no further debt is created. This is 6 times the current GDP of the United States. When Argentina collapsed, its debt load was not nearly as high as the U.S. . No other country has ever seen this level of debt and recovered.
There are $5 trillion worth of critical infrastructure components that must be replaced in the United States: levees, bridges, airports, roads, dams, sewers, water filtration plants, utilities and the like. These critical infrastructure needs have not been calculated into the future liabilities. Nor has the cost of hurricanes, earthquakes, violence, or any other catastrophe that could and will befall the U.S.
There is no way to pay this debt. The PNC Chief Strategist has obviously not included the U.S. debt in his rosy economic forecast because there is no way Americans can or will service this kind of debt load.
By the way, the Federal Reserve is the third bank of the United States and a large portion of Americans are calling for its dissolution. It is a private consortium of banks and in violation of the U.S. Constitution. This was a major theme of the Ron Paul Presidential campaign. Tens of millions of Americans are aware of this fraud and the majority of Americans believe the U.S. should dissolve itself form its own debt and move on. Obviously the bankers don’t want this
Meanwhile, the Federal Reserve is trying to consolidate more power. In our teleconference, someone alluded to that were people “fixing” the problems to prevent the economy from collapsing. What he was referring to is the Blueprint, which gives the Federal Reserve power over everything. Congress is about to continue to abdicate its Constitutional responsibilities by allowing the Federal Reserve to become the very the ultimate hallmark of fascism.

US Treasuries are at risk.

On October 1st, the U.S. finds itself in a new fiscal year for which funding for the wars in Iraq and Afghanistan as well as costs associated wit Fannie Mae and Freddie Mac have not been budgeted for or funded. The U.S.government will have to issue more debt to pay for more war. Whether anyone will show up at the auction is unknown.

Worst Crisis Since ’30s, With No End Yet in Sight.

These alarmist headlines come from the Wall Street Journal.

Money Markets Lose Money! Bye Bye Safe Investments!

Putnam Investments has closed a $12.3 billion money-market fund to limit losses to its investors, the large mutual fund company said today. The highly unusual announcement is the latest sign that tremendous financial pressures are now threatening even some of the safest kinds of investments.

The Prime Money Market Fund was open only to institutional investors. Putnam said in a statement that its board decided to close the fund last night after receiving a large number of redemption requests. The company said it could honor those requests only by selling assets at a loss, reducing the value of the remaining shares.

Putnam said it decided instead to liquidate the fund and spread any losses evenly among all the investors. “We wanted to treat all shareholders equally,” said spokeswoman Laura McNamara. She said it was “premature” to discuss how much of a loss, if any, shareholders will incur.

My email to Kelly Kelly, September 12, 2008

Dear Kelly,

Outside of liquidating Bank of America stock, which has traded at 60 percent under the purchase price (it hit a low of $18.44 in July and has traded at less than 25 percent of the purchase price since November of 2007) and switching the money market from Blackrock (conflict of interest that I have brought to PNC’s attention for five years) to Fidelity, you have done nothing I requested, nor have you given any analysis as to why my recommendations are wrong and why yours are right. Let’s be clear: this is a crucial right or wrong situation, and if you are wrong, you will face a subpoena. I find it incredulous that a person with vast amounts of data at her fingertips doesn’t care to use it. You study markets, don’t you? You do know that markets go down, right? You do know that history repeats itself, right? Tell me why I shouldn’t liquidate my stocks. Tell me why I should have declining stocks in a declining market. Show me the evidence that the United States will recover and make good on the $10 trillion in debt and $90 trillion in future unfunded obligations. Argentina didn’t have that much debt as a percentage of GDP and look what happened there. One in every 9.2 U.S. mortgages is in foreclosure or more than 30 days behind. One in five Americans cannot pay his taxes. There are no jobs or industry moving to the States. Fannie and Freddie had to be bailed out to keep investors throwing money into Sallie Mae so students entering college could get their loans this month. It’s a mess out there.

I am sure that you would agree to the statement, “Markets move up and down.” Basic economics, right? So when it is obvious that a market is moving against a position, wouldn’t it make sense to bail with a profit or small loss and reinvest at a more opportune time, like when the market has obviously bottomed out? You do realize that my trust fund is based upon men understanding and acting on this very notion eighty years ago. When the doctors and lawyers start putting their money in, you know the market is oversold. When a waiter at Applebee’s talks about his portfolio, you know the market is going to crash. This was true in 1929 and it is true today.

In your August email in which you dismissed my suggestions, you mentioned taxes. Capital gains taxes are at their lowest right now. It’s not going to get any better than this. We might as well suck it up (they will have to be paid eventually) than pay a higher rate in the future. It’s not fair for a person to pay a higher tax rate for income derived from their blood, sweat and tears than someone who sits on their chair and pushes a few buttons on a computer. Someday the masses will get it and I am fine with that. In the meantime, I would prefer to take advantage of a low capital gains rate. I might as well take the hit now, since we will be showing a capital loss on several of the positions in my portfolio.

It disturbs me to see how much money was lost because you refused to speak with my trustees to capture profits. Take Exxon, for example. It has traded in the mid $90 range for six months of the year. Yes, the capital gains are huge, but it was trading at a RECORD $95 per share! It was obvious that this would eventually go down. Why didn’t we capture the profits? Why are you averse to paying capital gains now? Any gain means the trust made money. That is a good thing, right? Apparently not, based upon the dismal performance of my trust fund. Exxon is trading at $75 right now. That’s a difference of $XXXXX. One trust fund lost $XXXXX in profits because you were not monitoring the funds and refused to contact the trustees to capture the profit. That’s serious money, Kelly. The day I of my first deadline to liquidate my trust, Exxon was trading in the high eighties. Oh, forgive me, you were on vacation during that time and par for PNC, there was no one to monitoring our accounts or correspondence regarding trading activities. I am so glad that bank takes its fiduciary responsibilities so seriously. Exxon has since lost more than $10 a share, meaning you just cost the trust at minimum $XXXXX, about what the capital gains tax would be. What kind of investment advisor are you?

of Another reason to liquidate now and pay the taxes is that in a few months, the trust has to go before the Orphan’s Court for a trustee change, at which time we will have to pay an extortionist based tax based upon the value of the trust. I believe that liquidating now will save over $XXXXX in taxes to the Commonwealth of Pennsyvania. Of course, if you keep me in these lousy stocks and bonds, my trust will be nearly worthless by the time it makes it to the Orphan’s Court, thereby making my tax liability nil. Maybe that’s your tax strategy. Actually, I am not sure what your strategy is. You liquidate Bank of America, but kept Idearc, which is trading at $1.30 right now, 90 percent less than the purchase price. At some point, Idearc went from $33 to $1.30 in a year. We only have a few (33) shares, but it is still a $600 loss instead of $1200 gain. On April 3, 2008, , Moody’s cut the stock to a B3, negative outlook. No warning bells went off? How do you justify this unrealized loss?

Lowes is trading $7 below the purchase price, with a P/E ratio of 14. I think Hurricane Ike is the only reason it is trading up today. Don’t get me wrong, I like Lowe’s and I have spent tens of thousands of dollars in their various stores in Arizona and Texas, just don’t want their stock and I don’t see it returning to the purchase for years. The stock price boomed with the housing bubble and will most likely fall with that bubble. The trust is looking at a $XXXXX loss at the moment. Where is the oversight in which PNC charges a healthy fee each month? Why are we paying PNC to lose money?

A few weeks ago I asked you to short Apple at $176. I would have been fine with a short at $172. I wanted to purchase the stock back at $150. I suggested it would take a few weeks at most. That’s too risky, sayeth the risk adverse woman who advises my trust fund on behalf of PNC. It’s not risk that you are adverse to, it’s profits. The 500 shares I asked you to short would have netted over $11,000 captured pre-tax profit in the exact time frame I specified. Sadly, it still doesn’t make up for the losses incurred by the total lack of oversight on these accounts.

What’s missing? Bonds. You do realize that 48 of the 50 states are technically bankrupt. Maybe you don’t. With the exportation and elimination of jobs, the housing crash, and bank failures, there will be less revenue collected by the cash-strapped states, none of which have planned for economic disaster. Right now I here rumors that it’s hard to find buyers for many of these bonds. Is that true? Are you aware that one of our municipal bonds has an unrealized loss? What happens if Arizona, Florida and New Hampshire go bankrupt? Where does that leave us? May I claim a stake of an Arizona highway as my own? Maybe I could set up a toll booth and recoup my losses, or maybe I’ll garnish the wages of a state employee in New Hampshire. We have no recourse if these states default on their debt, which is likely. But by then, PNC will have folded and you will not have to be bothered with my investment suggestions.

If my pieces of paper are not backed by something other than the rhetoric of politicians, how can you call my investment “safe”?

I have told you the reason I want my money (that bears repeating – MY MONEY!) in physical gold stored outside of the custody of the United States, with any cash balances in the Bullion Vault account kept in Swiss Francs. You could not counter anything I said, so you just wrote it off as too risky. Like too risky to get out of a losing stock. Too risky to schedule a meeting with my trustees. Too risky to open that attachment showing the negative flow of my trust fund.

I realize that spot gold is trading at low levels. There is a reason for this and it is temporary. Please see the attachment at the end of this letter. I have a substantial gold position, but I am not puking my guts over the decline. Regardless of what gold is trading at now, there is a 4-week back order for any form of gold bullion. Dealers who have the physical gold will not sell it for less than $900 and ounce. One friend of mine just sold 25 ounces bullion (he paid $378 an ounce years ago) to a dealer for $899 and the dealer had a buyer waiting willing to pay $925. This was just a few days ago. There is almost no physical gold bullion available for purchase in the US right now. Call a coin dealer – any coin dealer, anywhere in the country – and ask if he has any bullion to sell and the price. If he has no gold, ask how much it would cost to procure it if you paid a little more. I think you would be quite surprised. This is the right time to buy gold. I would be willing to pay $900 for physical gold right now if I wanted more physical on hand. My friend liquidated part of his gold position because he is leaving the US and is not sure how to transport physical gold across borders without a huge paper trail. He intends to hunt down a source of gold bullion in South America and has said he would pay $1000 an ounce to make sure he’s covered.

The gold market is rigged; just ask the pit traders and GATA. There is a huge disconnect between price, supply and demand. Supply and demand are in conflict with one another, which should send warning bells through your offices. However, you don’t follow gold, do you?

I don’t want gold for the long term, but I do feel it is the only asset which will appreciate during a severe recession/depression/financial Armageddon. I do not want paper. I don’t want over-priced real estate. I don’t want an overpriced commodities fund. I believe that those who set up these trusts would be in concurrence. Again, my trust funds have their foundations in oil and the Great Depression. I have beautiful ideas for the future, but my primary concern for the next year is wealth preservation and making enough money to cover the taxes. I have been explicit in what I want and yet you purposefully ignore my suggestions and my needs. Again, I have no heirs. Again, I have other source of income and assets aside from my two trust funds with PNC. Again, I am risk tolerant. Again, it is my money. Again, the US economy is collapsing and can never, ever repay the debt. We are having a fake rally right now, referred to as the war rally. It lasts six to eight weeks and will probably collapse around October 7th, though I think there will be a gradual decline preceding the crash. Maybe the powers that be will attempt to control the crash and spread it out over a few months. Fannie and Freddie were bailed so that foreigners will buy the next – and most likely last – round of debt. It doesn’t matter what I say, though, because you have never once taken any of my suggestions because your goal is to make me lose money. You have consistently demonstrated that.

If you have other ways of preserving and growing my trust funds, I would like to hear them. I have solicited this information before, but rather than addressing my questions and concerns and providing solid data that proves I am off my rocker, you put me in a Latin American index. I might live here, but I do not see a positive economic outlook for the region. I own a bookstore, coffeehouse, roasting company and half of a coffee plantation. That’s the sum of my investment here. I saw the real estate boom before it happened, but because Pedro Rivera lied and the trust had no Financial Advisor monitoring or accounts, my sisters and I lost the opportunity to make $XXXXXX in one year (100 percent profit) on a real estate transaction. As for balancing my portfolio, you can balance it all you want provided I am in a position that will not deteriorate. There is absolutely nothing in the trust fund that prohibits the trust being fully liquid or 100 percent invested in gold. It’s a short term move designed to protect my wealth. And it’s my wealth, my money.

What is PNC good for aside from losing money? Why have you not contacted me or my trustees about a position that had LOST MORE THAN 50 PERCENT of its value? At what time did you think it prudent under the Prudent Investor Rule and Pennsylvania trust law to contact the trustees and liquidate a losing trade? Are you not actively monitoring the account? Why was the account allowed to lose money? I want an answer – and I will get an answer, even if it means a subpoena.

I think the best way to resolve this situation is for PNC

to resign as trustee and reimburse the trust funds for four years of maintenance fees. I would also like PNC to reimburse the trusts for the ridiculously inflated annual tax preparation fees. They should be included in the fee we pay you to manage the account, and there is certainly nothing complicated enough to warrant spending $1200 or more to compile the list of dividends. My brokerage does this for free.

I realize that I have placed you in an uncomfortable situation, and I fully expect that PNC will continue to blow me off. I am tired of the ineptness displayed by PNC. It took four years, two months, three weeks and two days AFTER receiving the resignation letters from the former trustees and submitting X and X’s names as our trustees before PNC officially sent notice to me and X, that X and X were our trustees. One of my trustees did not know he was a trustee because PNC never told him or mailed him a statement. Do you understand why I hold PNC in such contempt? Your organization and employees have violated your fiduciary duty to the trust. If you disagree, show me the proof that PNC has maintained its role as a fiduciary entity. I just don’t see how you can given that it has taken four years to officially change my trustees and my trust funds had yet to be separated per the August 2008 statement.

Earlier in the year, X and I did not receive dividend checks for a few months. X may or may not been overpaid on one. If you were examining my accounts, I would think that you would have caught that little accounting error, especially since it occurred the following month, too.

PNC as done nothing to ensure the safety and solvency of my assets. I need a new investment advisor and I need PNC to remove itself from the trust. Four years ago I spoke with Pedro Rivero and Ballard Spahr about removing PNC from the trusts. Pedro said it was going to happen anyhow because with the divided trusts we no longer met the minimum requirements. I spent a week plus screening banks from Orphan’s Court approval list. I spoke with more than seventy percent of the banks on the list. I told them my investment strategy- real estate, gold, commodities options, and active trading. In the end, I narrowed it down to three institutions, all of whom read the trust documents, my strategy and needs and provided an in house legal opinion that my portfolio could be managed in the manner I saw fit. The banks and brokerage firm stated they could provide me with all of the services needed to implement my strategy.

I cannot imagine that it would be easy to be in the banking business right now. Have you seen WaMu stock lately? I saw the decline a year ago, but couldn’t in good conscience short a bank I do business. My experiences with the bank were always positive, but its sub-prime exposure has doomed it to failure, not that it matters because now there are 20 banks and mortgage brokers that may not be shorted. This is the only thing that stopped the freefall of the banking stocks. I am sure there were mixed emotions inside the PNC Wealth Management offices, with employees who bristled as their blinded love of not-really-free-markets-but-the-PPT-is-just-a-silly-conspiracy-theory was tarnished, but also felt a sigh of relief when they realized that the Fed had just printed money and tossed money into the financial stocks and now their clients might not be so angry as they look through their portfolios at the end of the month.

Kind of funny how 99 percent of the banking community failed to see the dangers of giving a high school drop out working nights at Arby’s a 110 percent loan for a house worth 50 percent of the mortgage. I worked in the mortgage departments of two banks in the early 1990s, Quality Control and Underwriting. The Quality Control work involved recertifying the information provided by the applicants, a requirement before the loan could be sold. It was just a temp job, but it gave me a working knowledge of the mortgage industry. There was a 28 percent rule, meaning the loan payment could not exceed 28 percent of the combined income of the applicants. It was a system that worked well. When those rules changed, it was inevitable that there would be a huge boom and then a huge slide. Greed prevailed and now we are facing a huge crash in the markets and major political/governmental transformation of the US in the next few years. Anyone who couldn’t see it is an idiot. If I can figure it out, there is no reason that banks could not foresee the inevitably of this decline. It amuses, irritates and appalls me to read the statements printed on the PNC Investment Outlook page. I sent you a list of quotes from the Great Depression. You can substitute the names in the quotes with the PNC President, CFO and Chief Investment Strategist. Either they are wholly ignorant of history or they are lying to their clients to keep them from running away in droves. Or maybe it is a combination of both, though I am of the belief that this is not happenstance.

Where are your contrarian thinkers? Has someone poisoned the coffee pot with Prozac and Ecstasy? Do you realize that those contrarian thinkers included my family members who made a fortune off the depression?

I am angered by the lack of respect

PNC
has afforded my trust. You have lost me an inordinate amount of money, and I actually do good things with my money, which makes it hurt even worse.

I apologize for the rambling nature of this missive, but your arrogance and ineptitude have reached my limit for tolerance. If you refuse to address these points, including the remuneration of the account for four years of fees, I will be forced to fly to Pennsylvania, hire an attorney, get an emergency order yanking PNC as the fiduciary institution, and then asking the Commonwealth of Pennsylvania to investigate the matter. I will publicly call for a class action suit against PNC for failing to maintain their fiduciary responsibilities, suggesting that beneficiaries check their statements to see if they were lacking an Investment Advisor for many months. Let’s face it, if your other clients portfolios are like mine, they will jump at the chance to recoup their fees paid to the bank.

Last week I emailed David and let him know that I wanted to be a trustee on my fund. My father was a trustee on his account with six heirs, so there is obviously precedent. I have yet to receive a response a week later. I am demanding action now. This is a simple change and yet I have no information as to how much the transaction will cost, who the attorneys are (and there is no reason to use an expensive law firm to institute a change in trustees), and when we can expect the accounting to be completed.

If I do not have the information I have requested by close of business Monday, September 15th, I will fly to Pennsylvania and seek immediate legal action against PNC.

To reiterate, I want a.) an explanation of why I should not liquidate and pay the capital gains tax before the trustee change takes place, b.) an explanation of why it is sane to put money (or keep money) in a declining market, c.) an explanation of why the economy won’t crash and how it will recover, d.) an explanation of how long it will take to recoup these investments when the market crashes, e.) a detailed description of your comments to Jeff Shivers, f.) an explanation of why no one was contacted to liquidate a stock that is under water, g.) a timeline and contact numbers for the trustee change, h.) a letter of resignation of PNC as my fiduciary trustee, i.) a new investment advisor appointed to my account for the interim period, and j.) four years of management fees returned to the trusts. If you just agree to points g, h, I and j, I will sign a statement releasing PNC from any liability and a promise to keep this agreement confidential. I prefer this option, but if you want to make this messy. I have the cash and sufficient animosity to spare to make this very, very ugly.

Finally, I will reiterate my position that I want to liquidate my stocks and bonds and have the money put into gold bullion stored with Bullion Vault in Switzerland and any cash balances be kept in Swiss Francs. You have shown me no other option with less risk. The market is crashing, the US economy is over, and as much as that saddens me, it is reality. Get used to it.

I am tired of being lied to. I am tired of PNC collecting a check every month and doing absolutely nothing for the account. The gravy train has come to an end. Again, if I do not have answers by the close of business on September 15, I will take legal action.

With sincere frustration,

Kelly Ann Thomas

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Published in: on September 20, 2008 at 6:37 PM  Leave a Comment  

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