Pugwash Posted April 25, 2008 Report Share Posted April 25, 2008 That's simply a wrong analogy, sorry. A better analogy would be to say that if I work for Porsche and I know that the 911 is about to be discontinued, I can go out and buy a bunch of 911's, knowing that the future scarcity will likely drive the price up. Are you saying that is immoral? Clearly I have information that the sellers do not, so should I tell them that they should not sell? Analogies don't work in this case. The stock market is an abstract concept if you think about it, where people swap faith and trust. If it were like selling and buying cars, it wouldn't need anti-predatory legislation, would it. Link to comment Share on other sites More sharing options...
subzero1 Posted April 25, 2008 Report Share Posted April 25, 2008 Define 'anti-predatory'. Are you saying it's fraud? If so, how exactly is it fraud? See the example of real fraud given by Aquinas and quoted above. That's fraud. But insider trading doesn't really fit. So it's not fraud. So what exactly makes insider trading wrong? My feeling is that the argument against it is pretty strongly related to the egalitarian view of justice. It is the idea that no one should have a real advantage over anyone else, and is at the root of the death tax and the progressive tax system. We can't raise up the poor or the 'dis-advantaged', but we sure as hell can destroy the rich or 'advantaged'. Everyone hates the rich and 'advantaged', so I guess that justifies targeting them for being 'predatory' and tossing them in jail, or at least justifies taking their money away from them, which they probably didn't 'deserve' anyway, right? Link to comment Share on other sites More sharing options...
JohnG Posted April 25, 2008 Report Share Posted April 25, 2008 Subzero your paper is full of distortions and inaccuracies. Just one example and then I am eating dinner. In this case, the buyer does not deceive the seller into giving up property. Indeed, the buyer does not even know who the seller is, and the seller would have sold anyway, 4 anonymously, through the same broker. The seller's action would have been the same whether an inside trader was the other party to the transaction or not. If the inside trader had not purchased the stock, someone else would have. The author is speaking of a transaction in which the buyer has insider information. But he conveniently ignores the most fundamental element of modern economic theory: supply and demand. If a buyer buys BECAUSE he has insider information, he has inflated the price that others will pay and thus reduce their profit - converting it into his own. Additionally, the seller has no opportunity put a higher price on his sell order because he does not have access AT ALL to the information. Value is unjustly transferred from seller to buyer. The author justifies this by saying that the seller does not know the buyer. WHAT RELEVANCE DOES THAT HAVE? That I don't know the man who broke into my home and stole does not change the fact that he stole from me. That he stole twenty dollars off my dresser and I never missed it DOES NOT CHANGE THE FACT THAT HE STOLE FROM ME. This paper is a very sloppy hack job. The author quotes Aquinas's Summa Theologica which is a very old text on Jurisprudence that is of mere academic interest today and (of course) was written long before the creation of regulated stock markets. This author is very selective in his citations and the GIANT glaring error is that he ignores altogether the actual state of the law in the United States AND the reasons these laws were enacted... I could go on ad nauseum but you have made up you mind so what's the point. You will do just as McGee does and choose only those sources that support your ideas - basically other authors who share the same ideas without any actual LAW. Good luck to you and be sure to show the SEC this paper when you get busted. I am sure it will win them over. Link to comment Share on other sites More sharing options...
Pugwash Posted April 25, 2008 Report Share Posted April 25, 2008 Everyone hates the rich and 'advantaged', so I guess that justifies targeting them for being 'predatory' and tossing them in jail, or at least justifies taking their money away from them, which they probably didn't 'deserve' anyway, right? Not true. We just hate the ones that cheated their way to the top ... unless, of course, they don't get caught! Link to comment Share on other sites More sharing options...
JohnG Posted April 25, 2008 Report Share Posted April 25, 2008 Everyone hates the rich and 'advantaged', so I guess that justifies targeting them for being 'predatory' and tossing them in jail, or at least justifies taking their money away from them, which they probably didn't 'deserve' anyway, right? WTF??? This is not about rich vs. poor. If anything it is about honest rich vs. dishonest rich. Not too many people that could be called "disadvantaged" are trading stocks, honestly or otherwise. Any other red herrings? Link to comment Share on other sites More sharing options...
JohnG Posted April 25, 2008 Report Share Posted April 25, 2008 That's simply a wrong analogy, sorry. A better analogy would be to say that if I work for Porsche and I know that the 911 is about to be discontinued, I can go out and buy a bunch of 911's, knowing that the future scarcity will likely drive the price up. Are you saying that is immoral? Clearly I have information that the sellers do not, so should I tell them that they should not sell? No this is not a good analogy and buying up the Porsches is not immoral because there is not established regulatory framework that creates an expectation of fairness in other buyer of Porsches. Going to dinerrrrrrrrrrrrrrrrrrrrr. For real now. Link to comment Share on other sites More sharing options...
subzero1 Posted April 25, 2008 Report Share Posted April 25, 2008 Well, seeing as how I asked to set aside legality and focus on the point from an ethics basis, I don't see how talking about LAW is relevant in any way to our discussion now. I absolutely concede that insider trading is illegal. My question is whether it's WRONG, and if so, why is it wrong, specifically, what part of the MORAL code does it violate? Now, if you posit the egalitarian ethics, then tie the fact that the information playing field is not level, therefore it's an ethical violation and morally wrong, that would be a fruitful line of inquiry. I'd argue against egalitarianism, as simply a systematization of envy, and we could pursue that. But saying it's wrong because it's 'stealing' or 'cheating', then not defining exactly how it's stealing or cheating is pretty weak. Let me retract that a bit. I can see how you have tried to tie it back to the concept of stealing, but it is based upon the idea of egalitarian distribution of information. I would answer that egalitarianism is the incorrect moral code and we could argue that Link to comment Share on other sites More sharing options...
JohnG Posted April 25, 2008 Report Share Posted April 25, 2008 Well, seeing as how I asked to set aside legality and focus on the point from an ethics basis, I don't see how talking about LAW is relevant in any way to our discussion now. I absolutely concede that insider trading is illegal. My question is whether it's WRONG, and if so, why is it wrong, specifically, what part of the MORAL code does it violate? You HAVE to talk about the law as well because it creates a framework of expectations, the violation of which gives unfair advantage to one (or certain) players. If a game of poker has rules and everyone reasonably expects that others will respect the rules, violation of the rules in order to accrue winnings to oneself unjustly is stealing. Theft may be achieved by a physical act or by deception, trickery or simple disregard of commonly accepted rules - such as in the poker game. Thus, if there were no rule against insider trading then I would not classify it as stealing. I might still have a problem with it for policy reasons (transparency and fairness increases market participation and as a result liquidity and it lowers the cost of capital to companies whose stocks are traded on regulated exchanges) but at least all investors would have knowledge that others may be privy to information that they don't have access to and thus they could make informed decisions about participation in the market. You cannot realistically take the law out of the discussion because it is a key part of the context. Link to comment Share on other sites More sharing options...
subzero1 Posted April 25, 2008 Report Share Posted April 25, 2008 I concede that insider trading is a rule and sets certain expectations, and I think your argument is spot on from that standpoint. If we all agree to the rules of the game, then we should all abide by those rules. To do otherwise is cheating, as you elegantly note. But as a topic of conversation, I'm actually much more interested in talking about insider trading and it's ethical standing if those rules had not yet been enacted, and/or whether they should be repealed. You touched on it briefly in your last post, but I would love to hear more of your thoughts on the matter. Link to comment Share on other sites More sharing options...
Pugwash Posted April 25, 2008 Report Share Posted April 25, 2008 But as a topic of conversation, I'm actually much more interested in talking about insider trading and it's ethical standing if those rules had not yet been enacted, and/or whether they should be repealed. You touched on it briefly in your last post, but I would love to hear more of your thoughts on the matter. Ethical view? If Insider Trading were legal, the stock market would cease to function. It wouldn't be a stock market any more. Link to comment Share on other sites More sharing options...
subzero1 Posted April 25, 2008 Report Share Posted April 25, 2008 Wrong, the stock market certainly existed and functioned before the enactment of insider trading laws. That's a historical fact. Also, saying that it will disappear is an argument of utility, that's not an ethical argument. Link to comment Share on other sites More sharing options...
Pugwash Posted April 25, 2008 Report Share Posted April 25, 2008 Wrong, the stock market certainly existed and functioned before the enactment of insider trading laws. That's a historical fact. So? If Insider Trading were made legal tomorrow, the stock market would fail. Let's put it like this: To ensure the survival of the Stock Market, they introduced Insider Trading laws. Computer networks existed well before hacking laws were introduced. How do you think the internet would be if they suddenly made intrusion legal? Link to comment Share on other sites More sharing options...
JohnG Posted April 26, 2008 Report Share Posted April 26, 2008 Wrong, the stock market certainly existed and functioned before the enactment of insider trading laws. That's a historical fact. I NEVER said that equities markets don't predate insider trading laws. I am fine having an exchange of ideas but when people start manipulating and outright lying about what I have said I see no point in continuing. Link to comment Share on other sites More sharing options...
highoeyazmuhudee Posted April 26, 2008 Report Share Posted April 26, 2008 (edited) how is buying up porsches before the general public even know its going to be discontinued any different from those assholes that stand in line for days to buy up 10 after learning theyre going to be discontinued only to resell them at a higher price later... or even paying $5grand OVER list price for a daytona because of demand? Even those people that line up to buy the new game systems only to resell them on ebay for 200%. if you can avoid the line up and cheat a little because you can..w.hy not? the world runs on money, in america you cant have life saving surgery unless you have an HMO or are bloody rich.... NOW THATS UNETHICAL. I look out for myself and dont care that you couldnt buy a porsche at the MSRP, live together, die alone Edited April 26, 2008 by highoeyazmuhudee Link to comment Share on other sites More sharing options...
subzero1 Posted April 26, 2008 Report Share Posted April 26, 2008 I NEVER said that equities markets don't predate insider trading laws. I am fine having an exchange of ideas but when people start manipulating and outright lying about what I have said I see no point in continuing. Juan, my post was in reply to Pugwash, not to you. I probably should have quoted his post in my reply to make that clear. Link to comment Share on other sites More sharing options...
subzero1 Posted April 26, 2008 Report Share Posted April 26, 2008 So? If Insider Trading were made legal tomorrow, the stock market would fail. Let's put it like this: To ensure the survival of the Stock Market, they introduced Insider Trading laws. Computer networks existed well before hacking laws were introduced. How do you think the internet would be if they suddenly made intrusion legal? I don't necessarily disagree with the argument of utility, but that's a different argument than an ethical one. I also don't equate insider trading with cracking (or illegal hacking), as cracking is clearly a violation of privacy and property rights, which is of course very firmly tied to ethical theory. I'm quite certain cracking is wrong because I can see what rights it violates, but I don't see that connection with insider trading, and I'd love for it to be demonstrated. Link to comment Share on other sites More sharing options...
offshore Posted April 29, 2008 Author Report Share Posted April 29, 2008 So to wind up this little saga... came Monday.....no announcement, although the scuttlebut is that a deal is close... Came Tuesday... the word must be out, as the takeover targets' shares have jumped to double the Thursday figure, still a long way short of their original $6.65! But still no announcement, or suspension from trading. Will update, if and when anything breaks. And NO, I didn't buy any! Offshore Link to comment Share on other sites More sharing options...
Dani Posted April 29, 2008 Report Share Posted April 29, 2008 Wow. Some of the "take it and screw the morals" opinions here certainly demonstrate why the stock Market is so heavily regulated. Have you no shame? Insider trading is illegal for good reason. morals in making money is just another way of staying poor..making money is about hustling you buy something cheap sell for twice the cost get rich thats have the worlds go around and yes its [censored]ed up.. that is the truth if you think rich people get rich by being good and honest then you are blind AND stupid i bet you 98% of realy rich people have broken more then 1 law to get where they are.. thats just have it is.. One of the richest guys in little Norway has been in jail thats have [censored]ed up it all is trust me to get jail time in Norway is very very hard Cheers Link to comment Share on other sites More sharing options...
rodwc Posted April 29, 2008 Report Share Posted April 29, 2008 morals in making money is just another way of staying poor..making money is about hustling you buy something cheap sell for twice the cost get rich thats have the worlds go around and yes its [censored]ed up.. that is the truth if you think rich people get rich by being good and honest then you are blind AND stupid i bet you 98% of realy rich people have broken more then 1 law to get where they are.. thats just have it is.. One of the richest guys in little Norway has been in jail thats have [censored]ed up it all is trust me to get jail time in Norway is very very hard Cheers Yes Dani, but these RICH people are not necessarily NICE people, some are but the majority are not. I would far prefer to be NICE and HEALTHY, than RICH and SICK. Link to comment Share on other sites More sharing options...
Dani Posted April 29, 2008 Report Share Posted April 29, 2008 Yes Dani, but these RICH people are not necessarily NICE people, some are but the majority are not. I would far prefer to be NICE and HEALTHY, than RICH and SICK. I 100% agree.. Link to comment Share on other sites More sharing options...
cornerstone Posted April 29, 2008 Report Share Posted April 29, 2008 Rich and nice is easy. Does anyone need me to link to our recent fundraising effort? Link to comment Share on other sites More sharing options...
manuel Posted April 29, 2008 Report Share Posted April 29, 2008 hey yo offshore! I will buy the stocks in behalf of you and then we will split the profits! I then can send you the money wraped inside some magazines...this way money becomes untraceable. yo I am your man! Link to comment Share on other sites More sharing options...
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