John Stossel – The Case For Insider Trading

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  @moribundmurdoch June 21, 2024

  I heard Murphy talk about this on his podcast "ContraKrugman" – great stuff.
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  @EuropeanQoheleth June 21, 2024

  Libertarians actually DEFENDING insider trading? That's insane.
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  @scottab140 June 21, 2024

  Robert Murphy is a wrong. Unfair advantages isn't fair and equal for "justice for all." The SEC is not needed as their is a United State Criminal and Civil Court.
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  @SeldonLien June 21, 2024

  Regulate on insider trading had always been a total bullshit that gives the illusion of safety for the public, and that allows cronies to put ppl down in an arbitrary way (the enforcement of those laws is very low). The core of the inspiration to regulate on insider trading is pure jealousy against people who owns the information.
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  @augustusr1278 June 21, 2024

  Oh, shut the fuck up. This is taking this libertarian shit too far. 

  "Oh, making the stock market a rigged game where insiders can make millions 100x easier than everyone else and exit positions before bad news is public is GOOD! Let me bullshit my way through this one…"

  And lets abolish the SEC because the free market will protect consumers!
  Fuck off.

  If this dimwit knew anything about trading stocks, he'd know that a group of 20 or so insiders can't make a stock's price "accurate". I mean, what the fuck? For them to change the price of a stock like Wal-Mart or Visa, they'd have to be trading hundreds of millions of dollars per day! 

  And stop with this notion that these insiders would be altruistic and only care about making the stock's price accurate. No, they would dump shares when they knew the company was doing bad and buy up shares when they know a good PR is coming out. There is nothing altruistic about that at all.

  (P.S. this guy has obviously never used eBay. The seller reputation program isn't some fail-safe mechanism that protects consumers. I've had people with no ratings to people with hundreds of good ratings try and send me counterfeit items. And if you fail to return the item on time, or something goes wrong in the return process, the scammer keeps your money. This would never happen with a govt. backed agency.)
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  @hernandayolearyallda June 21, 2024

  No one is going to give you money when you can basically rip them off, take all their money, screw them over and get off jack free. Fraud which insider trading is a type of, makes it harder for legit businesses to prosper and it helps a few insiders like cfo, ceo, cao etc. personally gain at the expense of the entire company.

  No one is going to tell you to your face, I am not lending you money because I am scared you will rip me off, but people think it.
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  @hernandayolearyallda June 21, 2024

  Himself rich, you'd be the first one to whine and complain to the government.

  Even if we allow such an insider trading arrangement, even if it was legalized, it would basically end capital markets as we know it. There'd be no pension investors, no institutional investors, it'd be impossible to raise funds because banks don't generally take that risk except on a handful of limited investments, it'd be near impossible to go public, no one would want to invest, it is a libertarian fantasy.
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  @hernandayolearyallda June 21, 2024

  CFO is not telling people before, that is what makes it insider trading. If he publicisizes his company is failing then trades afterwards, its not insider trading. No, the CFO is not enough to move the stock price significantly on his own unless it is a pennystock scam company.

  If you gave a guy your life savings or your pension of $100 million to go invest and manage and he ran the company into the ground and sold out all his stocks on a high right before the company went broke and made
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  @hernandayolearyallda June 21, 2024

  buyer available. Further the person who gets stuck with the stock when the insiders drive down the price, the people who are buying the stock are the victims. Sometimes it can be difficult to track the specific person, sometimes it is not. If you were sold a stock of a company that was bankrupt, but appeared normal, like say enron, despite the fact the insiders knew it was worth zero, you'd be pissed
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  @hernandayolearyallda June 21, 2024

  The victims are all the investors and stock buyers who are conned, do you have a brain, seriously? I am a cfo, you are the head of a pension fund for army veterans. I sell you $300 million worth of my stock options, telling you in financial statements this is how the company is performing and I sign that off in the financial statements. The explicit victim is the person who purchases the stocks, usually the government/exchanges (who are required to purchase stocks when there is not a specific
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  @hernandayolearyallda June 21, 2024

  On the exchange, no one has to buy law, buy hdmi cables. Stocks are financial instruments, the CFO of best buy does not get millions of free hdmi cables, then jack up the price and sell his at a discount privately if he did, he'd go to jail for price fixing and fraud and he'd be fired for misappropriation of funds and spend a long time in prison.
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  @hernandayolearyallda June 21, 2024

  You are wrong. Fraud involves using deceit to gain an advantage when selling a product. The person buys the stock is deceived into believing the market is fair and insiders will not be able to trade ahead of them, without insider trading laws, the capital markets would basically end as we now it. The pension funds, the portfolios, the investors, the banks have no reason to invest in a rigged market.

  The banks also have liquidity requirements where they have to buy stocks by law on the exc
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  @Y2kplaya92 June 21, 2024

  Also, there is no fraud committed. The person who bought the stock buys the stock because of his/her perception, not because insider told them so. And why not apply insider trading laws to businesses that sell physical goods. Doesn't Best Buy do the same thing when they sell HDMI cables for 10 times what they sell in other outlets?
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  @Y2kplaya92 June 21, 2024

  Also, who are the supposed victims? I know, I know, you are going to say the counter parties. But who specifically? When something is stolen from someone there is always an explicit victim. Only the government tries to get away by saying victims are ethereal.
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  @Y2kplaya92 June 21, 2024

  Your comment about the maximaztion of gains is superflous and serves purpose. If insiders were allowed to sell, the price would go down. Insider trading laws also prevent people from telling others about the supposed opportunity. If that CFO went and told people about it, the selling would drive down the price of the stock. Saying that it should be illegal because the value of the price drop is ridiculous.
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  @Y2kplaya92 June 21, 2024

  If insiders sell stock, it would drive down the price and establish a negative trend. This would stop mom and pops from buying the stock.
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  @hernandayolearyallda June 21, 2024

  Actually she was thrown in jail for lying to investigators aka police about her insider trading.
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  @hernandayolearyallda June 21, 2024

  When in fact the largest investor are the little guys pension fund, it is things like teacher's pension fund and other large institutional investors like that who drive the market, and they aren't insider's. Insider trading means if I am CEO and we made a deal, or I work in accounting and I see the company is going broke, I get to trade my shares before anyone else is aware of that information
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  @hernandayolearyallda June 21, 2024

  I have a degree in finance and this is by far the stupid argument I have ever heard. He claims insider trading helps people, because people with inside information get to go out and trade and then the stock price accurately reflects what EVERYBODY knows. HELLO, EVERYBODY is not an insider, by helping people he means helping insiders, by everybody, he means every insider. Further his claims about stocks being less volatile is again garbage. Then he claims that the little guy will be unaffected
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  @jackiechan511 June 21, 2024

  These so-called "experts" who advocate for insider training are socially bankrupt and feeding BS which I'll explain why. I personally have no problem with investors who have inside information as long as most or all of the investors have this information. For one person to have this information and profit off other's losses then it becomes unfair and unequal.
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  @ImAznnn June 21, 2024

  When people buy stocks they deserve to know what goes on regarding that stock (They are shareholders of the company of course). If they don't get this information consider it as the person being scammed unless of course it says somewhere that "you will not get some of the company's information"
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  @ImAznnn June 21, 2024

  I still don't understand why its fair that only a small portion of people get the information to make sure the price of the stock is accurate and not everyone. I mean if that small number of people have that magical power to make sure that stock prices are accurate then sure by all means give them that information. The case here is that they are not the only ones who have that magical power. Everyone has the potential to make use of the information and make stock prices more accurate.
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  @ArrowsNV June 21, 2024

  Insider trading is not what Martha Stewart got thrown in jail for. She got thrown in jail for trading based on inside information AND FAILING TO REPORT IT TO THE SEC. Not for insider trading, that is completely legal.
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  @EpicOfChillgamesh June 21, 2024

  The desire is not to have the experts have all the money, but to allow experts to be trading. The end result would be a greater amount of money in the pockets of each of a greater amount of people than with the insider trading laws.

  Yes, it is sad that we have more of a socialist system than a free market, but that is not an argument for preventing the market from becoming more free.

  Rather than continue Ad hominem attacks, can you explain why it is beneficial to have a volatile market?
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  @EpicOfChillgamesh June 21, 2024

  Your argument about informing the shareholders is cyclical. If they are informed, then they now have inside information and can't trade on it. How does that help them? Now they know that stock prices will plunge when the information is made public and there is nothing they can do about it because of the "helpful" insider trading laws. Instead, they could trade on their information, causing a more gradual change in prices that would create a more stable stock market.
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  @EpicOfChillgamesh June 21, 2024

  While fraud can be used in insider trading, it is the fraud, not the trading, that is harmful and immoral. Instead, if people with information were allowed to trade, the affects of their trading on prices would provide information to actually make fraud harder, not easier.

  Instead of a stock suddenly crashing and everyone losing their investments, there would be an indication of the change before it happens, and the impact would be lessened. In net, there would be more productivity.
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  @EpicOfChillgamesh June 21, 2024

  "This economy is a zero sum game."

  There are so many economic fallacies that you've brought up, but I think this is the central misconception of all your arguments.

  The economy is not a zero sum game, at least not in a free market. Socialism is a zero sum game when you have makers and takers, rather than makers trading with makers in a positive sum exchange.

  This issue isn't about elitism, it is about freedom and prices. Prices control behavior, because they are information.
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  @stevemcgee99 June 21, 2024

  Murhpy Vs. Krugman – PLEASE!
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  @kev3d June 21, 2024

  Lastly, why do you care? If money corrupts "everybody", why do you even bother with the system at all? Does bartering work much better for you? If so, the good for you and vaya con Dios amigo. But for the rest of us who don't care to trade oranges for chairs or shoelaces for heating oil, money works pretty well. But its offensive to you that someone who has worked his way to a position of valuable knowledge should profit from that knowledge. How unfair that the industrious should prosper!
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  @kev3d June 21, 2024

  Once again, if a company publicly appears robust it may attract more investors, like during the dot com bubble, even if insiders know that the business model is not sustainable. So what happens? The price goes up, more people invest but sooner or later the bubble pops, and those investors lose much more than they would have otherwise, had they the best, current and accurate information earlier. In other words, it pops the bubble before it gets too big, reducing, but not eliminating, losses.
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  @kev3d June 21, 2024

  If a person voluntarily buys a stock he knows, or ought to know that there is an inherent risk in investing. A quake could swallow up the HQ, the next product might be ill-received. But there is also a chance that the stock could explode or anywhere in between. That is how it works. Don't like it? Don't play. But to forbid those with the most current, accurate and relevant information from trading on it is ridiculous and certainly is no crime.
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  @kev3d June 21, 2024

  "This is unfair advantage over the market" Unfair? Being tall in basketball is unfair, having more money than someone else is unfair, buying low and selling high is unfair. So what? If stocks were fair, the price would never change. Do you honestly believe that prior to 1968, there were no "small players" in the market? Furthermore, good information doesn't need to be bought, it becomes apparent with the price adjustments.
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  @kev3d June 21, 2024

  "Confidential" is a separate issue to insider trading. If an employee's contract forbids him from acting on certain information then that closes the matter. However, if there is no such contractual prohibition on acting on certain information, then why not allow that information to be used in the market place? After all, they spent their time and energy at a particular company, why not let them place their bets as best they can?
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  @kev3d June 21, 2024

  So if the interest rate set by the fed is so "nominal", why have it at all and leave the interest rate at whatever is justified by the customer's credit rating? I WANT a system based on self-interest and greed. Such as it is, the FED has done a piss poor job of economic maintenance, considering the loss of dollar value and the worst economic meltdown of all happened AFTER the FED was created and it failed to do what it was designed for; protect the money supply.
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  @kev3d June 21, 2024

  Nothing is more self evident in the world of stock than the price after a person closest to that stock either buys it or sells it based on real, accurate information. If a company missed its forecast by a long shot and long term debt and stiff competition and an eroding customer base, but the yearly information has not yet been released, insider information allows those who are most interested and most aware to get out quicker.