Posts Tagged ‘law’

Insider Trading Is Legal For Members Of Congress – And They Refuse To Pass A Law That Would Change That

Insider Trading Is Legal For Members Of Congress – And They Refuse To Pass A Law That Would Change That

Courtesy of Michael Snyder at The American Dream

Is insider trading wrong?  Most Americans would say that it is.  In fact, some very wealthy and very prominent Americans (including Martha Stewart) have gone to prison for it.  It just is not right for those with inside information that is not generally available to the public to make huge profits in the stock market by making key trades based on that information. 

But there is one group, members of the U.S. Congress, that can do all the insider trading they want and get away with it.  That is because insider trading is perfectly legal for members of Congress.  Yes, you read that correctly.  So how would that work?  Well, for example, a member of Congress may know that a law that is about to be proposed would have a very positive effect on a particular company and could buy up a ton of stock in that company a few days before that law is introduced.  Isn’t that wrong?  Of course.  Is there any law against it?  Not at all. 

You would think that some of the more ethical members of Congress would want to close this glaring loophole, but it just isn’t happening.  Legislation has been introduced from time to time that would end this practice, but it has gotten very, very little support.  The Wall Street Journal recently published an article about this issue which described the current situation this way….

"A few lawmakers proposed a bill that would prevent members and employees of Congress from trading securities based on nonpublic information they obtain. The legislation has languished since 2006."

But even though insider trading is legal for members of…
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Krugman: “The Question Is Whether Our Economy Is Governed By Any Kind Of Rule Of Law”

Krugman: "The Question Is Whether Our Economy Is Governed By Any Kind Of Rule Of Law"

rule of lawCourtesy of Washington’s Blog 

Paul Krugman writes:

The mortgage mess is making nonsense of claims that we have effective contract enforcement — in fact, the question is whether our economy is governed by any kind of rule of law.

***

True to form, the Obama administration’s response has been to oppose any action that might upset the banks, like a temporary moratorium on foreclosures while some of the issues are resolved. Instead, it is asking the banks, very nicely, to behave better and clean up their act. I mean, that’s worked so well in the past, right?

The response from the right is, however, even worse …. conservative commentators like those at The Wall Street Journal’s editorial page have come out dismissing the lack of proper documents as a triviality. In effect, they’re saying that if a bank says it owns your house, we should just take its word. To me, this evokes the days when noblemen felt free to take whatever they wanted, knowing that peasants had no standing in the courts. But then, I suspect that some people regard those as the good old days.

I’m happy that someone as prominent as Krugman is weighing in on the side of the rule of law.

I’ve been hammering on that topic for years:

Pic credit: Jesse’s Americain Cafe 


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Drunk Driving at BP

Drunk Driving at BP

Dangers of Driving When Drunk

Courtesy of DEAN BAKER, at CEPR

While BP has taken some heat over its spill in the Gulf, it is remarkable how limited the anger actually is. Many defenders of the company have made the obvious point: It was an accident. BP did not intend to have a massive spill that killed 11 people, devastated the Gulf ecosystem and threatens the livelihoods of hundreds of thousands of workers.

Of course this is true, but it is also true that a drunk driver who runs into a school bus did not intend to be involved in a fatal collision. As a society, we have no problem holding the drunk driver responsible for a predictable outcome of their recklessness. Driving while drunk dramatically increases the risk of an accident. This is why it is punished severely. A person who is responsible for a fatal accident while driving drunk can expect to face many years in jail. Even someone who drives drunk without being in an accident often faces jail time because of the risk they imposed on others.

This raises the question as to why the public seems to accept that the top officials at BP, who cut corners and made risky gambles in their drilling plans, should be able to “get my life back,” as BP CEO Tony Hayward put it. The people who lost their livelihood as a result of BP’s spill will not get their lives back, even if BP does pay compensation. Certainly the 11 workers killed in the original explosion will not get their lives back. Why should the people responsible for this carnage be able to resume their lives of luxury?

There are two separate questions. The first is a narrow legal issue concerning the extent to which Hayward and other high-level executives can be held criminally liable for the accident. It may be the case that the laws are written so that even if companies commit gross negligence that results in enormous harm, including multiple deaths, top officials are not criminally liable. This is a question about the status of current law.

The second question is a moral and economic one about what the laws should look like. From either standpoint, it is very difficult to see why we would want to say that reckless behavior that would be punished with long prison sentences if done by…
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Should Taxpayers Continue to Subsidize Goldman Sachs’s Alleged Obscenity?

Should Taxpayers Continue to Subsidize Goldman Sachs’s Alleged Obscenity?

Courtesy of Janet Tavakoli, originally published in Huffington Post 

The U.S.’s Financial Reform bill is over 2,000 pages. It includes exemptions and lots of opportunities to create loopholes. Behavior that caused our ongoing global financial crisis is guaranteed to continue, if we don’t have swift and effective deterrents.

Broadcaster Max Keiser interviewed Luc Saucier, a Parisian lawyer to the financial community and Fulbright Scholar, on how to create a fast remedy to amoral behavior in the global financial markets.

Saucier asserts that if you are making money on Wall Street--or at a hedge fund--there is no law, except the unwritten law: Don’t get caught.

Financial institutions used extensive legal resources to "technically" comply with the law. (In many cases, laws were broken, but this interview is not addressing those cases of illegal conduct.)

Saucier explains that labeling a financial institution "obscene" is an effective social deterrent. U.S. citizens have the right to own property and to make money. We also enjoy freedom of speech, up to a point. The Supreme Court stated that when "art" becomes obscene--and the court worked hard to define what is meant by "obscene"--it is no longer considered art and does not enjoy the protection of freedom of speech.

The most highly compensated players in finance are hedge fund managers earning $1 billion to $4 billion per year. Saucier says that when you see someone making money--billions of dollars a year in bonuses by exploiting the subprime crisis--then one can take the view that part of the remuneration is obscene. The same can be said for many bank CEOs, who may earn somewhat less economic compensation, but enjoy countless valuable perks.

Banks enjoy taxpayer-funded benefits including tens of billions of bailouts and ongoing funding subsidies. For example, Goldman Sachs and Morgan Stanley receive taxpayer subsidized funding by virtue of their new post-crisis ability to borrow from the Fed. Taxpayers may decide that just as we don’t wish to fund obscenity posing as "art," we don’t wish to subsidize "finance" that is simply obscenity.

Mr. Saucier puts it this way:

"They are committing acts of obscenity…They are morally bankrupting society…It’s obscene like kiddie porn is obscene…On the financial front that’s what [corrupt financiers are] guilty of."

Financial firms pay a lot to circumvent laws, and they are more aggressive and faster than our ability to legislate.

Max Keiser notes…
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BP Stands for Bad Petroleum

BP Stands for Bad Petroleum

Courtesy of Robert Reich 

Climate Protesters Demonstrate In London

Saturday the White House warned BP that it expects the oil giant to pay all damages associated with the disastrous oil leak into the Gulf of Mexico, even if the costs exceed the $75 million liability cap under federal law. BP responded Sunday saying its public statements are “absolutely consistent” with the Administration’s request.

When you hear dueling public statements like these, watch your wallets. You can safely assume BP’s lawyers are already at work to ensure that the firm pays not a cent more than $75 million — not to taxpayers bearing cleanup costs, not to consumers whose gas bills will rise, not to businesses along the coasts that will lose a fortune. And BP won’t pay more unless or until there’s a law requiring it to.

BP has been making public statements about its supposed corporate social responsibility for as many years as it’s behaved irresponsibly. It’s the poster child for PR masquerading as CSR.

It was just eight years ago British Petroleum shortened its name to BP and began promoting itself as the environmentally-friendly oil company with a vision that went “Beyond Petroleum” to embrace solar cells and wind power. In a $200 million advertising campaign organized by Olgilvy & Mather, BP transformed its corporate brand insignia from a shield to the more wholesomely natural green, yellow, and white sunburst. BP’s chief executive, Lord John Browne, issued warnings about global warming and said the company had a social responsibility to take action.

Notwithstanding its new image, BP continues to be one of the largest producers of crude oil on the planet. Although it committed itself to devoting $8 billion to alternative fuels over ten years, the sum was tiny compared to BP’s annual profits from oil that have averaged over $20 billion and its annual capital expenditures of over $14 billion.

Nor has the firm distinguished itself by its commitment to the law. Several years before the Gulf oil rig explosion, an explosion at BP’s Texas City plant killed fifteen workers and triggered a $21.3-million fine from safety regulators.

In March 2005, corrosion of BP’s pipes and equipment on the North Slope in Alaska led to a spill of 270,000 gallons of oil, the largest spill ever recorded in that fragile territory. Critics said BP wasn’t spending enough money to prevent such spills. Only in 2006, after…
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“How Could I Be So Selfish and So Foolish”

"How Could I Be So Selfish and So Foolish"

Courtesy of JESSE’S CAFÉ AMÉRICAIN

Were Lloyd and Jamie and the pigmen of Wall Street and Washington taking notes during Tiger Woods’ apology?

Doubtful.

No one is perfect, of course. Everyone makes mistakes, everyone sins. We are all weak, and insufficient in ourselves. And yet we attempt great things, in fear and trembling. The spirit endures and abides.

But there are moments in history that are epidemic with excess, a pathological pursuit of lust, greed, and deceit with a nihilistic determination that is more like a fashion of the age than an aberration. Chic to be above conventional morality and the law, lacking all proportion. Accepted, and even admired.

Tiger’s words could be the new American Anthem for a generation of reckless, selfish, and self-destructive behaviour by those most blessed by its freedom, offered the greatest opportunities and privileges, sometimes undeserved, and most often paid for by the sacrifice of others.

Most of them still have no regrets, except of course for the fear of discovery. They will have to somehow grow a conscience for that. Or face the withdrawal of support by their sponsors. In the case of Tiger it was Nike. In the case of the Banks it is the US government. And in the case of the US government it is a gullible and complacent public.  

"Many of you in this room know me. Many of you have cheered for me, have worked with me, always supported me. Now, every one of you has good reason to be critical of me. I want to say to each of you simply and directly I am deeply sorry for my irresponsible and selfish behaviour I engaged in. I know people want to find out how i could be so selfish and foolish.

I knew my actions were wrong but I convinced myself that the normal rules didn’t apply. I never thought about who I was hurting. Instead, I only thought about myself…

I felt that I had worked hard my entire life and deserved to enjoy all the temptations around me. I felt that I was entitled. 

Parents used to point to me as a role model for their kids. I owe all those families a special apology. I want to say to them that I am truly sorry.

I recognize I have brought this on myself


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Phil's Favorites

Vladimir the Terrible

 

Vladimir the Terrible

The uneasy relationship between Putin and terror.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia 

1/ Operation Successor

During the Yeltsin years...



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Biotech/COVID-19

While coronavirus cases spike in the South, the Northeast seems to have it under control - here's what changed

 

While coronavirus cases spike in the South, the Northeast seems to have it under control - here's what changed

Face masks and social distancing have become the norm in New York City. Noam Galai/Getty Images

Courtesy of Taison Bell, University of Virginia

Hospital Capacity Crosses Tipping Point in U.S. Coronavirus Hot Spots” – Wall Street Journal

This is a head...



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ValueWalk

Coronavirus stimulus: Petition seeks $600 weekly checks for essential workers

By Aman Jain. Originally published at ValueWalk.

The negotiations for the next round of coronavirus stimulus are likely to start next week. If you, and many like you, want something to be part of the next package, then you have a week to make yourself heard. The best way to do so is starting or supporting a coronavirus stimulus checks related petition.

Q2 2020 hedge fund letters, conferences and more

Petition asks coronavirus stimulus checks for workers

Currently, many petitions related to coronavirus stimulus checks are trending. One such petition calls the government to send $600 weekly federal checks to essential wo...



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Kimble Charting Solutions

Tech Leader Hitting Brick Wall of Resistance and Going To Reverse Its Trend?

Courtesy of Chris Kimble

Is leadership running into a brick wall of resistance and about to pull an important reversal? A strong bullish trend looks to be experiencing an important breakout test!

The trend for SMH remains up as it has spent the past 10-years inside of rising channel (1).

This chart looks at Semiconductor ETF (SMH) on a monthly basis since inception. Fibonacci was applied to the 2000 highs and 2008 lows.

Fibonacci was applied to it’s 2000 highs and 2008 lows.

The rally off the March lows, which tested the 2000 highs, has it currently testing the und...



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Zero Hedge

Taleb: Tail-Risk Hedges Are Now A Necessity

Courtesy of ZeroHedge View original post here.

Authored by Michelle Jones via ValueWalk.com,

Tail risk hedges are designed to only pay off when the markets suddenly plunge, so many investors don’t have the stomach to carry them. However, one expert on tail risk funds advises investors not to be in the market right now if they aren’t using a tail hedge.

No V-shaped recov...

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Digital Currencies

Chainlink Crypto Surges To A New All-Time High - Here's Why...

Courtesy of ZeroHedge View original post here.

Authored by Joseph Young via CoinTelegraph.com,

Surging volume, price discovery, and new partnerships pushed Chainlink price to a new all-time high at $8.48...

image courtesy of CoinTelegraph

...

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The Technical Traders

Gold & Silver Measured Moves

Courtesy of Technical Traders

The next few weeks are certain to attract much attention to precious metals.  Hardly anyone can argue that Gold has not experienced an incredible upside price rally over the last 12+ months.  Recently, Gold closed above $1800 for the first time since 2011.  Our researchers believe the next target is $1935.  Keep reading to learn why we believe this is the next major price target for Gold.

Gold Weekly Price Analysis

Over the past 18+ months, Gold continues to develop price patterns that seem to be replicating going forward.  This pattern consists of an advance in price followed by consolidation/rotation in price to set up a new momentum base.  The example of this price advance ...



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Chart School

Dow 2020 Crash Watch - Update

Courtesy of Read the Ticker

Like 1929 the markets have bounced. This time it is on the back of the FED $6.5T money printing.

Previous Post: Dow 2020 Crash Watch 

But can the FED blow $6T every time the market rolls down to test support.

Yes, maybe before the US 2020 elections the FED will do 'what it takes'. But post elections not so much, the year 2021 is a long way from the next election (presidential or congress) and defense of the markets may not be so supportive at $6T or $10T per market smash. The FED may hesitate, and that will be window for stocks to break lower.

The 36 month simple moving a...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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