The Weird Kid
Monday, November 17, 2008
Free Martha Stewart
Just an aside.
Does anyone know exactly what "insider trading" is?
Cuz, if it is what I think it is, I need someone to explain to me why it is illegal. I'll listen, I really will. I simply must be missing something.
I heard it defined on the radio today as "using information unavailable to the public to avoid losing lots of money."
And I'm thinking. If I were on a train track, and I saw a train bearing down on me....am I allowed to move?
I mean, even if the track is on a bridge, crammed full of people, hundreds, and they don't know the train is coming because holy shit, a train timetable just fluttered out of the wind into my hands, only I know it. Can't I get off the track?
I can't possibly save them all, there is too many. If I started screaming, the ensuing riot would prevent me and my family from a safe escape and in no way assure anyone else's safe escape. Can't I grab my friends and family and get out of the way of the train?
It's not my fault I have that train timetable.
Am I really required to stand there and get hit?
Really?
Does anyone know exactly what "insider trading" is?
Cuz, if it is what I think it is, I need someone to explain to me why it is illegal. I'll listen, I really will. I simply must be missing something.
I heard it defined on the radio today as "using information unavailable to the public to avoid losing lots of money."
And I'm thinking. If I were on a train track, and I saw a train bearing down on me....am I allowed to move?
I mean, even if the track is on a bridge, crammed full of people, hundreds, and they don't know the train is coming because holy shit, a train timetable just fluttered out of the wind into my hands, only I know it. Can't I get off the track?
I can't possibly save them all, there is too many. If I started screaming, the ensuing riot would prevent me and my family from a safe escape and in no way assure anyone else's safe escape. Can't I grab my friends and family and get out of the way of the train?
It's not my fault I have that train timetable.
Am I really required to stand there and get hit?
Really?
posted by Imez at 8:18 PM
11 Comments:
It can also mean "using information unavailable to the public to make lots of money."
Or "using information unavailable to the public to avoid losing lots of money, while the public loses lots of money."
So, it would be like seeing the train coming, not telling anyone else, jumping off the train, and letting everyone else die.
Then saying, "It sucks to be them," and walking away while brushing your hands off.
yeah, but like I analogized, (huh, that appears to be an actual word) if I told everyone the train was coming, the panic would ensure my death and do nothing to ensure their survival (panic causes stock crash, everyone still loses all their money...there is no way my knowledge of a stock crashing can keep it from crashing).
I mean, if the information comes your way, what is the correct thing to do?
I thought inside trading usually amounted to someone making lots of money because they know some things that not everyone else knows. Not necessarily saving himself from losing, but he, alone, gaining gaining gaining.
Said in that way, it's still a seemingly innocuous practice, yet how bout this: What if a company is 1 day away from announcing a new product that would revolutionalize something-or-other, and the president's assistant over-hears the deal going down, and he tells some shady guy, who buys a million shares of the company stock, then the next day when the stock goes from $2 to $69, the shady guy gives half the profit back to the assistant. It's like game-fixing in sports. Also very illegal. It's why athletes can't bet on their sport.
And in the end, I still think it should be illegal based on your analogy, but then again I'm more of a socialist and you're more of a libertarian. So.
I hear you, Imez.
I feel like, don't we all kinda wish we could BE that shady guy who somehow knows that a company is about to explode? (Is that just me?)
I tend to be more of a socialist, too, but I guess not on this.
ps i heart martha, so perhaps i am biased.
What is the ethical thing to do?
Meno hit it on head; perfect analogy.
I can, however, understand your question about what you are supposed to do if the information comes your way. I mean, it's not as if you're going to just sit back and watch your stock tank. I don't fault Martha; I fault her advisor. He's the one who overstepped the boundaries of ethics.
mignon- Seriously? Really? It should be illegal to save yourself? You're ethically bound to allow yourself and your family to get hurt? For the greater good!!???
heidi, martha is a stone cold bitch and she rocks it so well. I just have trouble understanding how knowledge is ever shady.
lu- I asked first. But I think, if by some definition, the ethical thing is to have me and Smudge and Sean get hit by a train, when I could save us, I refuse to be ethical because ethical is stupid.
kate- are you a socialist, too?
I just don't see it as impending certain ruin by an oncoming train. The analogy doesn't work for me.
I've never equated insider trading as a mechanism for honest, hard-working people to save themselves from losing a bundle on the stock market. I see it as people trying to earn a quick, dirty dollar by trading information about the inner workings of publicly-owned entities.
See, that's the thing, I guess. They're publicly-owned. Meaning, all those other people that are going to lose money, have just as much right to the information, because they own part of the company too.
Insider-trading allows a few people to manipulate the worth of a company, when in fact they share ownership with 3000 other people.
If you shared ownership in a home and one other owner knew it was wired improperly and would probably burn down, would it be okay for him to shop around his share in the house, without telling any of the other owners that the home was a firetrap? That's the analogy I use.
the thing with the stock market is that the companies are publicly owned and funded BY THE STOCKHOLDERS, so information about them is supposed to be public (financials, income, expenses, balance sheet, how much they pay their CEOs, etc). so if one stockholder gets important information, then ALL stockholders of that company are supposed to be getting that information too. it's more of an issue of fairness.
let's say that you make a phone call to the guy who drives the train and convince him to tell you that there's some defect with the train and there's a strong possibility that it's going to crash, and so based on that information you stay off of that train, but you don't tell anybody else that the train is defective, and it crashes. the train driver should've made that information about the defect public, but he didn't, but you had an advantage over the general public and were able to avoid your death, while others didn't.
(and to be honest, i think that most people that are convicted of insider trading probably aren't just sitting around and accidentally overhear something. but i don't really have any proof of that, i might be totally wrong).
mignon and rach-
The "publically owned" part actually makes your points of views clearer to me.
Still, free Martha. She didn't do anything wrong.
Brilliant. You're very creative; thanks for sharing your gift.
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