141–150 of 493 posts
One thing I've always wondered: Does the stock market basically consist of insider traders making a profit off of people without that knowledge? I feel like even with immense restrictions on insiders in place, information is so easy to pass on to sb. else, that it should be impossible to prevent this. Heck, I could cough once for buy, twice for sell. Who's going to surveil me and notice that?
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Please correct me, but here's a provocative hypothesis I spent three minutes thinking through. Couldn't you say that speculating with insider information on public markets can be a way for public officials to make a lot of money without marrying themselves to any particular interests? In that case, couldn't it be potentially a mechanism we can exploit for good? Disclaimer: not American, no strong opinion on these peo…
Your hypothesis assumes that all elected officials must engage in some form of bribery or pay for play. In an ideal world we’d find leaders who put the interests of the country ahead of their finances.
Not that I expect people would be comfortable paying politicians more (see how many complain about e.g. CEO pay) so I guess we are stuck with incentives for corruption instead.
The very people whose job it should be to stop this sort of thing are the ones who are profiting from it. How do you change this? No really, how can we force congress to change the rules so that elected officials can't profit from inside information? Why would they ever vote for such a bill?
> For example, Pelosi in Dec 22 was against more stimulus. Her husband buys deep ITM TSLA and AAPL calls that day. December 23rd, she is suddenly for stimulus again, with those same companies ralling 5%, giving her an instant +30 return. > Congressman Gottheimer is absolutely an incredible options trader. He’s been selling calls at peaks on $MSFT all 2021, & seemingly buying back the contracts on dips. This in blocks…
Please correct me, but here's a provocative hypothesis I spent three minutes thinking through. Couldn't you say that speculating with insider information on public markets can be a way for public officials to make a lot of money without marrying themselves to any particular interests? In that case, couldn't it be potentially a mechanism we can exploit for good? Disclaimer: not American, no strong opinion on these peo…
For example will a lawmaker holding a large portion of their wealth in Apple shares want to introduce legislation that forces Apple to allow alternative app stores (costing Apple the 15%-30% cut of all the app store sales)?
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my naive solution: politicians become monks. They go without. They are provided modest housing and budgets. I'm sure there are zounds of issues with it, but I like to imagine servant leaders who go without to do more for the communities they serve.
I'd be happy with that, but perhaps an easier solution is to make them moderately wealthy. Pay them a top 5% salary with a guaranteed pension for life, plus mandatory open finances for life. Then there's much less incentive to resort to graft.
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I'm curious if any of this falls under the definition of insider trading . It should, but I think it doesn't and which is why SEC doesn't get involved in these. Does anyone know?
For a long time, Congress had an exemption to insider trading. They no longer do, but, insider trading still requires material non-public information about the company in question -- and Congressional acts are the most public thing possible. Betting that a company's stock will go up (or down) and then making it happen after you make the bet isn't insider trading, it's activist investing, and is totally legal.
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We elect people who actually believe in governance instead of people out to make a buck. I know that everyone's going to act in their own interest (that's sorta how interests are defined) but some people feel a legitimate duty and loyalty to country and welfare above their own personal comfort - these people tend to be torpedoed very early on in US politics because they refuse to cozy up to special interests to play…
Meh, a lot of the people you're describing are incredibly incompetent and succumb to simplistic ideologies. Over the long run they end up in the same position that everyone we're complaining about ends up in. While not entirely related, I remember a study by the U.S. military during the Vietnam war that said the worst performing soldiers were the ones who were patriotic and served due to a sense of duty. I'm simplify…
I'm also not advocating that blindly loyal idiots should be in charge - a good comparison to make is to look at more local governance. On a local level the stakes are much lower so the money being thrown around is far less - this lets people get into politics because they want to make change which is an anomaly at the national level - most of those politicians are there because it's a career and they value preserving that over everything else.
Another decent idea in this direction is term limits but I'm a bit concerned that that might deprive us of competency.
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I would like more oversight here but I don't know if these are great examples. I do (without evidence) believe a lot of these people use insider information. Pelosi's husband has been very bullish for a long time on Tesla, Apple & tech in general I do believe. Gottheimer did what I think is a Bull Call spread which means in February, after a crazy run up in market prices in January, he bet that MSFT would go up a lit…
Well, when the order of events is "A committee which Pelosi is member of is discussing the large contract on the VR helmets for the military — Pelosi's husband buys MSFT — The committee anounces that the contract goes to MSFT — MSFT stock rises", and the pattern keeps repeating, it is evidence, albeit circumstantial.
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I think the insider trading laws don't require motive - just that they had private information or used their position of influence and that they benefited from a related trade. The rules for executives at companies usually requires them to file any trade plans related to their company stock prior to actually making the trade, which would at least prevent the short term plays like the Pelosi example. Even tech people…
Stupid insider trading, where someone gets a tip and then trades on it, is well enforced. It's easy to catch ex post facto and the people doing it are generally of the mind that everyone is insider trading and so they're unlikely to get caught. The problem is in the grey areas. Take the Pelosi example. The material nonpublic information was her personal policy position. Assuming she acted purely venally, are your own…
Again though there's plausible deniability, as you say. It needs to just be outright banned.
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Whatever the behind-the-scenes truth, I think the appearance of conflicting interests is a problem regardless. For a lot of elected offices and high public service positions, I think their wealth should be put into a blind trust, one constrained by law to buy broad, boring things like index funds. That would surely be a problem for some individuals. But I don't think it's a systemic problem. We only need to find 0.00…
We only need to find 0.00013% of the US population Maybe we should use sortition then instead of elections? What could be more democratic than random average people (meeting some criteria) taking a turn at the wheel?