Candidate For Dumbest Article of the Year!

[Parsad]

CNBC journalist Michelle Caruso-Cabrera says that there should be no insider trading rules, since the markets should allow the free movement of information...Milton Friedman told her so, ok!  

 

In that case, Warren Buffett's children should be freely allowed to trade Berkshire stock based on what he tells them about each upcoming quarter's results.  What a stupid article, and I'm wondering if the recent insider trading investigations may put a damper on exactly where Cabrera and CNBC get some of their information from.  I'm sure they can all start hedge funds at SAC like Ron Insana did...and then run them into the ground like he did as well.  Cheers!

 

http://www.cnbc.com/id/40318804

[Guest Bronco]

Perhaps it is not the dumbest article of the year.

 

Sometimes smart people say dumb things for recognition.  She is pumping a book.

 

We live in a culture where people with no talent (kim k, hilton, the sitch) make millions.

 

I am hoping it is more of this hyperbole to make money than a serious morale position.  If she would happen to be serious, it is somewhat disturbing that she is on the major business network in the US.

 

[Guest Bronco]

Quick statement - I would like to retract my comment that the Situation has no talent. 

 

Jersey Shore is a cultural bonanza...Snooki, J-Wow,etc...nothing better.

[ubuy2wron]

Parsad, Michelle prides herself in being somewhat to the right of Ayn Rand  and Genghis Khan on the political spectrum. It never ceases to amaze me how some vehemently buy into a no rules, wild west form of market based economic Darwinsim as the only solution to societies ills. I guess in Michelles perfect world SAC would not be under investigation and Stevie could buy an even more opulent palace http://static.businessinsider.com/image/4b86fd387f8b9a9d5faf0100/cohen-house-greenwich.jpg and could spend even greater sums purchasing decomposing shark carcasses masquerading as modern art. http://www.stamfordadvocate.com/mediaManager/?controllerName=image&action=get&id=119784&width=628&height=471

 

PS If anyone is interested in the photo of Stevies house in the top left hand corner is his under cover hockey rink just to give you some indication of its scale.

[Myth465]

Parsad, Michelle prides herself in being somewhat to the right of Ayn Rand  and Genghis Khan on the political spectrum. It never ceases to amaze me how some vehemently buy into a no rules, wild west form of market based economic Darwinsim as the only solution to societies ills.

 

Economic Darwinism types are quite funny. Why stop there, why not just social Darwinism. True survival of the fittest, instead of the nerdiest. That usually stumps them (she would be raped and killed in a matter of minutes in a no rules society). Everyone wants to pay the game they think they are wired to play. Interesting world.

[ubuy2wron]

Parsad, If the truth is to be told I do kinda envy his personal hockey rink but I think the world might be just a bit better off if the shark was swimming free and Stevie was floating in the tank.

[Guest ValueCarl]

Michelle Cabruso Cabrera! Whoa!! That's a mouth full!!!!! Can you say that five times in a row without stumbling!!!!!!!!!!

 

Then there's Maria Bartiromo who cares not to include her married name, Steinberg.

 

There's a strong history and affinity between American Italians as well as Jewish people, especially in NY.

 

Who knows, but social Darwinism might be right up these peoples' allies. I think Madia's father made a good business feeding wise guys plenty of pasta fazool in Brooklyn! Come to think of it, there's nothing like a warm bowl of pasta with delicious lentil beans as part of that dish!

 

I wonder if they serve it to them in jail?  ;) 

[Parsad]

Parsad, If the truth is to be told I do kinda envy his personal hockey rink but I think the world might be just a bit better off if the shark was swimming free and Stevie was floating in the tank.

 

That's pretty damn funny!  I also like the rink and he's probably got a pool, but the whole monument to myself thing is just so wrong on so many levels.  Guys like him need that much space simply because they need somewhere to put their massive egos...it just won't fit anywhere else!  Cheers!

[watsa_is_a_randian_hero]

Parsad, Michelle prides herself in being somewhat to the right of Ayn Rand  and Genghis Khan on the political spectrum. It never ceases to amaze me how some vehemently buy into a no rules, wild west form of market based economic Darwinsim as the only solution to societies ills. I guess in Michelles perfect world SAC would not be under investigation and Stevie could buy an even more opulent palace http://static.businessinsider.com/image/4b86fd387f8b9a9d5faf0100/cohen-house-greenwich.jpg and could spend even greater sums purchasing decomposing shark carcasses masquerading as modern art. http://www.stamfordadvocate.com/mediaManager/?controllerName=image&action=get&id=119784&width=628&height=471

 

PS If anyone is interested in the photo of Stevies house in the top left hand corner is his under cover hockey rink just to give you some indication of its scale.

 

Feel like I need to comment - I doubt most free-market ayn rand types (such as myself) would prefer a system where insider trading was promoted (I would not).  I think the standard party line would be: inside information is the intellectual property of a company, and therefore spreading this information in the marketplace (breach of NDA's/CA's) would be illegal and the company should be entitled to civil damages. 

 

In addition, in a "free marketplace," companies would deal with only with lawyers/bankers/exchanges/consultants that have internal controls preventing employees from spreading inside information (this already happens to an extant).

[RichardGibbons]

There's no such thing as intellectual property in a free market system.  That's just an artificial construct created by regulations.

[Myth465]

There's no such thing as intellectual property in a free market system.  That's just an artificial construct created by regulations.

 

Lol, interesting part.

 

Whats funny is Greenspan who knew Ayn and was part of her inner circle said he didnt even believe in the enforcement of contracts, he said the market would sort it out. Sounds like you Watsa my friend are a free market pretender. The market you wish for doesnt seem so free.

[ragnarisapirate]

Here is the thing.... I really wonder how any insider can ever buy, without insider information that isn't public. If anyone can present me an argument that says that a CEO generally doesn't know the company better than one of us (who, I assume know companies better than95% of the investing public), I will be impressed.

 

What if a CEO was waiting to buy stock until he had some cash, then, when he had the cash, they were ready to announce something big?

 

I also don't understand where the line is drawn for keeping the playing field level... a book called the Slueth Investor only blurred the lines for me. For example, if I sit in front of the distribution center of a company and count what all they ship out, and trade accordingly, is that legal (probably) or moral (maybe)? Certainly, it isn't public info to anyone that doesn't sit there and count... but, if the CEO trades on that info, he could get toasted.

 

I am sorry, but, I just don't see how we can truly enforce insider trading laws without making the whole thing messy.

 

Even Prem and the guys at fairfax have bought their stock right before the end of their blackout period... Is that OK? and they are some of the most respected guys out there. I vividly remember a couple of people on here talking about their purchases (maybe from the summer a year ago?) and how they felt that the reason they bought was due to some good results coming.

 

As is the case with Watsa, I am generally a libertarian nut job (hell, both of our usernames come from Ayn Rand). However, this is one of those issues that is hard for me to digest. I hope that there is a good and long discussion over this issue. :)

[watsa_is_a_randian_hero]

There's no such thing as intellectual property in a free market system.  That's just an artificial construct created by regulations.

 

Lol, interesting part.

 

Whats funny is Greenspan who knew Ayn and was part of her inner circle said he didnt even believe in the enforcement of contracts, he said the market would sort it out. Sounds like you Watsa my friend are a free market pretender. The market you wish for doesnt seem so free.

 

Umm...wrong.  Cite your source.  Heres mine:

 

http://aynrandlexicon.com/lexicon/patents_and_copyrights.html

 

Google ayn rand intellectual property rights and you'll see she was clearly supportive.

 

There's no such thing as intellectual property in a free market system.  That's just an artificial construct created by regulations.

 

The concept of any property ownership (physical or artificial) is a construct of man.  I don't know where you get the statement "intellectual property in a free market system," but I would appreciate you citing a source of a reputable free market supporter.

[watsa_is_a_randian_hero]

As is the case with Watsa, I am generally a libertarian nut job (hell, both of our usernames come from Ayn Rand). However, this is one of those issues that is hard for me to digest. I hope that there is a good and long discussion over this issue. :)

 

The CFA Institute has a great approach:

 

http://www.cfainstitute.org/learning/products/publications/ccb/Pages/ccb.v2010.n14.1.aspx#

 

Their approach boils down to:  

 

1.  All inside information is the property of a company.  

2.  Trading on material inside information constitutes a theft against the company and its shareholders (bullish information gives you the opportunity to buy cheaper than those uninformed, bearish information gives you the right to sell more dear than those uninformed).

3.  Companies should make an effort to disclose as much information as possible in as timely manner as possible to prevent abuse.

4.  If you are spreading material inside information it is an ethical breach; if you were bound by a CA or NDA it is a contract breach; if you are regulated in an area such as the US it is also a legal breach.  

[Myth465]

There's no such thing as intellectual property in a free market system.  That's just an artificial construct created by regulations.

 

Lol, interesting part.

 

Whats funny is Greenspan who knew Ayn and was part of her inner circle said he didnt even believe in the enforcement of contracts, he said the market would sort it out. Sounds like you Watsa my friend are a free market pretender. The market you wish for doesnt seem so free.

 

Umm...wrong.  Cite your source.  Heres mine:

 

http://aynrandlexicon.com/lexicon/patents_and_copyrights.html

 

Google ayn rand intellectual property rights and you'll see she was clearly supportive.

 

There's no such thing as intellectual property in a free market system.  That's just an artificial construct created by regulations.

 

The concept of any property ownership (physical or artificial) is a construct of man.  I don't know where you get the statement "intellectual property in a free market system," but I would appreciate you citing a source of a reputable free market supporter.

 

How exactly am I wrong? I said Greenspan did not, and mentioned he was close to her. I am wrong quite a bit, but cant see how in this case.

 

http://www.pbs.org/wgbh/pages/frontline/warning/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid

 

Minute 16 - 18. If you care to listen. Greenspan is said to have said that he doesnt believe fraud should be prosecuted. He felt the market would take care of it.

 

-------

 

Evidence that Greenspan knew and was close to Rand.

 

http://en.wikipedia.org/wiki/Alan_Greenspan

 

In the early 1950s, Greenspan began an association with famed novelist and philosopher Ayn Rand that would last until her death in 1982.[25] Rand stood beside him at his 1974 swearing-in as Chair of the Council of Economic Advisers.[25]

 

Greenspan was introduced to Ayn Rand by his first wife, Joan Mitchell. Although Greenspan was initially a logical positivist,[33] he was converted to Rand's philosophy of Objectivism by her associate Nathaniel Branden. During the 1950s and 1960s Greenspan was a proponent of Objectivism, writing articles for Objectivist newsletters and contributing several essays for Rand's 1966 book Capitalism: the Unknown Ideal including an essay supporting the gold standard.[34][35]

 

During the 1950s, Greenspan was one of the members of Ayn Rand's inner circle, the Ayn Rand Collective, who read Atlas Shrugged while it was being written. Rand nicknamed Greenspan "the undertaker" because of his penchant for dark clothing and reserved demeanor. Although Greenspan was once recognized as a proponent of laissez-faire capitalism, some Objectivists find his support for a gold standard somewhat incongruous or dubious,[citation needed] given the Federal Reserve's role in America's fiat money system and endogenous inflation. He has come under criticism from Harry Binswanger,[36] who believes his actions while at work for the Federal Reserve and his publicly expressed opinions on other issues show abandonment of Objectivist and free market principles. However, when questioned in relation to this, he has said that in a democratic society individuals have to make compromises with each other over conflicting ideas of how money should be handled. He said he himself had to make such compromises, because he believes that "we did extremely well" without a central bank and with a gold standard.[37] Greenspan and Rand maintained a close relationship until her death in 1982.[25]

 

In a congressional hearing on October 23, 2008 Greenspan admitted that his free-market ideology shunning certain regulations was flawed.[38] However, when asked about free markets and the ideas of Ayn Rand in an interview on April 4, 2010, Greenspan clarified his stance on laissez faire capitalism and asserted that in a democratic society there could be no better alternative. He stated that the errors that were made stemmed not from the principle, but the application of competitive markets in "assuming what the nature of risks would be."[39]

 

----

 

Richard is also right. At the end of the day your ideology has a fundamental flaw. You are just like everyone else, you draw lines in the sand and say that anything that crosses "your line" is an attack on free markets. You want me to cite a free market source, as though free markets are "designed" by free marketers. How is that different than regular markets "designed" by stakeholders. Either way its "designed by men in suits" making rules which appeal to them.

 

Central bank which sets rates, yes. Intellectual Property rights, yes. Enforcement of contracts / prosecution of fraud, yes. Child labor laws, yes (I guess its ok now but not back then). Sensible Regulation, no dont you  dare thread on my free market. Requirements for Dr.s, CPAs, and Lawyers to be certified, no again dont thread on my free market.

 

You push for intellectual property rights because it suites you, many countries dont because it doesnt suite them.  

 

We are all just drawing lines in the sand, and once everyone comes to terms with that we can select the best lines for society. Oh ya, lets forget all that and just let some crazy women from the 50s draw the lines. A true free market doesnt and has never existed. You guys just prefer different thinner lines.

[watsa_is_a_randian_hero]

How exactly am I wrong? I said Greenspan did not, and mentioned he was close to her. I am wrong quite a bit, but cant see how in this case.

 

http://www.pbs.org/wgbh/pages/frontline/warning/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid

 

Minute 16 - 18. If you care to listen. Greenspan is said to have said that he doesnt believe fraud should be prosecuted. He felt the market would take care of it.

 

 

You are wrong because your original quote said "he didnt even believe in the enforcement of contracts."  You have not provided a citation to that effect.  

 

Fraud and contract enforcement are two different things.  Greenspan was saying fraud enforcement would not be necessary as the market itself would enforce; institutions have safeguards to prevent, conduct due diligence on counterparties to discover, and the minute a fraud is discovered he/she would be blacklisted from industry.

 

And, rand and greenspan are two different things.  Greenspan may have been a follower at one time, but I don't think many Rand followers today would characterize the way he ran the fed (ie, bailouts for LTCM and the Greenspan put) was characteristic of a libertarian.

 

And, my argument above related to insider trading; libertarianism was brought up only in the context of refuting a statement about how free-marketers would prefer insider trading.  Argue against the points I have made if you care to; rather than arguing against "some crazy lady from the 50's."  I have cited the CFA Institute as well - is that crazy?

[Rabbitisrich]

Thanks, Watsa, for the Ayn Rand Lexicon. I am interested in reading more of her philosophy. Can you recommend her more technical writings? I am having trouble with the ambiguous usages of "rational man", "conceptual consciousness", etc...

 

Reading through some of the quotes, it seems that she implies the need for a mediating authority:

"He has to plan his life long-range, make his own choices, and deal with other men by voluntary agreement (and he has to be able to rely on their observance of the agreements they entered)."

 

This quote implies limitations in the ability to own the proceeds of your work:

"If you exist only because society permits you to exist—you have no right to your own life. A permission can be revoked at any time. If, before undertaking some action, you must obtain the permission of society—you are not free, whether such permission is granted to you or not. Only a slave acts on permission. A permission is not a right."

It's something to consider when it comes to the allocation of survival resources such as clean water medicine.

 

 

For the Randians, does Rand confront the notion that societies form rules, codified and otherwise, to mitigate the endless processing that would occur if participants had to cost-benefit model all interactions?

 

[ubuy2wron]

Watsa , Ayn Rand changed my life, I was a lefty who read her works in college and her arguements convinced me of the importance of capitalism and private property. That said for mahkets to function properly they must be both free and fair. Think of a poker game where some players can regularly see what cards are going to be dealt next (insider trading) I for one and I am sure most rational players would choose not to partcipate in that game. One of the great advantages  of the Western mkts is that they are generally percieved by most participants as being both free and fair, this increases liquidity and valuations and only good things flow from those features mI am sure you agree.

    Greenspans Randian cred certainly is difficult to challenge he certainly was an important part of her inner circle and I am sure considers himself a proponent of her philosophy. I have come to the conclusion that like all belief systems Randian models run into difficulty when they are transfered from the printed page to the real world.

[Myth465]

Watsa you got me on that slight distinction. I should have checked my source and said fraud first. But if you dont believe fraud should be prosecuted than that says alot about your thoughts concerning enforcement. He believes Madoff should be fine, because he would be shunned by the market now. I think thats retarded.

 

Greenspan and Rand are different (never claimed they were one in the same), but it says alot about how practical her philosophy is. Ideology is interesting, we just discard those who werent pure enough.

 

The CFA Institute seems like a fine one, and probably isnt crazy. Though this doesnt require much rationalization or legalize. It just makes good sense for people not to allow people to trade on private inside info. Allowing so weakens trust in the market, I would simply say its not fair, draw up some arbitrary rules (similar to what we have now) and move on with life.

 

So much hamper wheeling to justify whats simply logical. I prefer Munger to Rand. Lets just do what makes sense.

 

With that said I think you missed my greatest point. We are all just drawing lines. You included. Somewhere out there (similar to the original post) is a person (a true believer) who feels your markets lack the freedom you so cherish (they want child labor, no IP, and other freedoms you cringe at) . They think you have lost your way and your lines are a bit too restrictive. The fact that there is a debate among those who get it, shows that they too are just drawing lines.

 

You can have ideology. I will stick to logic and rational thought (Similar to Buffett and Munger).

[watsa_is_a_randian_hero]

But if you dont believe fraud should be prosecuted than that says alot about your thoughts concerning enforcement.

 

I never said that.  You said Greenspan said that.  I was explaining his thought process and how that did not equate to negating contract enforcement.  

 

You debate like a politician; you describe me as if you know me and put words in my mouth and my "ideology."  I had 2 points I was making; (1) that a free marketer would NOT believe insider trading is ethical, and (2) that insider trading represents breaches of an ethical duty (theft of information), breaches of contract in many cases (NDAs/CAs), and breaches of law in many jurisdictions.

 

Now for the last time, if you want to debate something with me, stick to the only points I've made on this thread (1 & 2), and please limit your tangents.

[Myth465]

Lol I am not putting words in your mouth. My reference is to Greenspan (if he doesnt believe - the you in the sentence was directed towards his thought process not literally you). Its me making a reference / comment about his thoughts, though perhaps poorly worded.

 

My basic point is we will always have a mixed economy, and have always had a mixed economy. Every developed country where people want to live is a mixed economy and free markets have never existed in civil society. Its simple a thought exercise / ideology which is impractical, similar to communism (and inmo destructive for the US). Anyway I have addressed your comments, you prefer not to engage mine which is understandable. So we will let that be that.

[watsa_is_a_randian_hero]

My basic point is we will always have a mixed economy, and have always had a mixed economy. Every developed country where people want to live is a mixed economy and free markets have never existed in civil society.

 

Ok???  Your above statement is a true fact.  Listen, I'm not going to sit here and debate with you a point I agree with you on.  However, that still has nothing to do with the 2 simple points I was making.    

 

I made 2 points above, and you are trying to make statements like this quote, and statements about my supposed ideology as if they are counterargument for the 2 points I have made above.  Don't take this the wrong way, but if you don't hear back from me on this or any other topic its because (a) I have a full time job to tend to (b) time outside that job is scarce and I'd rather be researching stocks, and © while philosophical/ethical/legal debate interests me, a "debate" presupposes both parties are debating the same topic.

[Guest Bronco]

Watsa hero,

 

Hopefully that limited time isn't for researching SKX anymore.

 

 

[watsa_is_a_randian_hero]

Watsa hero,

 

Hopefully that limited time isn't for researching SKX anymore.

 

 

 

About half my net worth is in 2 stocks right now - FFH & FCBN.  I've fared just fine over the last few years, thank you for your concern though... :)

 

BTW, SKX is @ about the same price it was when I originally posted.  And while DECK has continued to hit new highs, I'd still invest in SKX today over DECK.  I thought you sold your DECK anyways?

[Myth465]

My basic point is we will always have a mixed economy, and have always had a mixed economy. Every developed country where people want to live is a mixed economy and free markets have never existed in civil society.

 

Ok???  Your above statement is a true fact.  Listen, I'm not going to sit here and debate with you a point I agree with you on.  However, that still has nothing to do with the 2 simple points I was making.    

 

I made 2 points above, and you are trying to make statements like this quote, and statements about my supposed ideology as if they are counterargument for the 2 points I have made above.  Don't take this the wrong way, but if you don't hear back from me on this or any other topic its because (a) I have a full time job to tend to (b) time outside that job is scarce and I'd rather be researching stocks, and © while philosophical/ethical/legal debate interests me, a "debate" presupposes both parties are debating the same topic.

 

Fair enough. I simple agree and move on, if I feel I am in agreement with the other person.

 

I do think we however have a fundamental disagreement, but its probably not worth either of our time to discuss it. Discussion on SKX would probably be more worthwhile and potentially profitable.