On June 3rd the daily newspaper Biznis published an article entitled “Commission silences Funds.” The things said in the piece are so unbelievable that I had to read it twice. I looked up the date, it was not dated 1948 аnd printed in Stalin’s USSR. No, it was dated 2008 and printed in Serbia.

To put it shortly, the piece talks about how the Securities Commission of the Republic of Serbia (The Commission) headed by Milko Stimac had in the past few days been summoning representatives of investment funds and allegedly had quietly silenced them. The reporters say that the Commission had “subtly silenced” them. Here is what that “subtlety” is all about.

According to the piece, the Commission forbade the representatives of the funds to criticize the competition and negative occurrences on the market. Allegedly, those who do not like the competition are not fit for the market. That is nonsense. If a biscuit maker or a newspaper publisher can talk about their competition why shouldn’t the representatives of investment funds be allowed to do the same? If someone feels that his rival has damaged his business by making certain comments, he can press charges and ask for compensation. That should also be the case with investment funds. Who asked the Commission anything and why is it meddling where it doesn’t belong?

Next, it is forbidden to comment on the decrease in the value of the investment units. Negative assessments are not allowed, and only “promoting optimism” will not be punished. That anyone could say this today can hardly be believed. The value of investment units in the last year was in constant decline, because the domestic funds mainly invested on the Belgrade Stock Exchange which is also in decline. This is public data and what is the problem if someone is commenting on it? If the value of investment units is in constant decline, what does “promoting optimism” mean? That means convincing the current and potential investors that everything is all right – the former should not withdraw their investments and the latter should invest. As if the investors are so foolish not to know that they should not buy when the value of investment units is declining, because later they will be even cheaper. As if they do not know that now they should sell their units, to invest somewhere else and to come back to the Stock Exchange and to the funds when better times return. While preventing criticism where there is ground for it, the Commission also recommends lying to investors. Only it refers to it as “promoting optimism.” Not only does the Commission recommend lying but it is also taking the investors for idiots who will buy those lies.

The Commission believes that the representatives of the funds should not even talk about whether the buyers of investment units are “small, mid-size or big” investors. In order to talk about it, the representatives of the funds should have complete information on investors in all the existing funds in Serbia; now there are eleven of them. That is also complete nonsense. If someone talks without much competence, he will lose his reputation. The opinion market will sanction him. There is no need for the Commission to interfere. Unless it wants to take us back to 1948.

Finally, and this is the icing on the cake, the representatives of investment funds should send their public-directed opinions to the Commission for it to assess whether  they are fit for the public. Those people from the Commission are worse than Stalin. In the time of Stalin and Broz, their parties’ officials could voice their opinions publicly without asking for approval which the Commission now asks of fund representatives. Above all, by placing this matter at the end of the appeal, the Commission shows its unprofessionalism as censor. Had they began by saying this, everything else they said would not be necessary.

How is such a thing possible? It is certainly not accidental. Everybody who follows the financial market in Serbia had already noticed the statements by the Belgrade Stock Exchange officials and the Commission in May and June 2007 that there is no reason to panic, that everything is alright. They said that the market is overheated, that the decline in the stock values is only a normal correction, that the investments should be continued etc. In other words, those officials had already made a name by “promoting optimism”. Why? Because they were hoping that they could stop the negative trend in the financial market so that the market would not stop and they would not lose their highly paid jobs. When they saw that their words had no effect other than their personal embarrassment, they fell silent. Now they moved on to a higher stage. In order to hold on to their privileges, they are trying to silence others by using the worst Stalinist methods.

What is there to say in the end? This is not the first time that the people from the Market, the Commission, the National Bank of Serbia and other institutions talk nonsense. No one hopes that they know anything about the economy and financial markets, although they like to call themselves experts. But this thing with the Commission is not only economic stupidity, this is a step towards a higher category, because these people cannot tell Stalinism from a market democracy. In normal countries, the Stalinist ignoramuses cannot hold important positions. But this is Serbia. If the national-socialists take power, they would not have to replace many of them, because some of their people are already in high places.

Translated by Ivica Pavlovic

Peščanik.net, 05.06.2008.