This is smart politics AND good governance:
2020 presidential candidate Sen. Elizabeth Warren (D-MA) is calling on financial regulatory agencies to investigate whether President Donald Trump broke the law when he told associates and attendees of his Mar-a-Lago club to expect something “big” in response to Iran’s killing of an American contractor in Iraq…
Now, Senator Warren is calling on the Securities and Exchange Commission and the Commodities Futures Trading Commission to determine “whether there may have been any illegal trading in defense company stocks or commodities related to individuals’ advance knowledge,” according to the letter Warren sent to the agencies, which cites The Daily Beast’s reporting. Warren also asks the agencies for a briefing on the matter no later than Feb. 13.
“Individuals who were guests at President Trump’s resort may have obtained confidential market-moving information,” the letter says. “These private individuals … would have had the opportunity to obtain significant profits simply by being guests or members at President Trump’s private resort.”
Warren’s letter notes that several contractor’s stock prices jumped following the assasination of Soleimani. Northrop Grumman stock prices increased by over 5 percent and Lockheed Martin’s stock prices increased by 3.6 percent, according to the letter.
My guess is one of the highlights of the presidency for Trump is the opportunity to strut around Disgraceland and lord it over the assembled bigwigs, whose membership fees he doubled after the EC win. I’m just as certain those people consider the fee an investment.
They might even be stupid and arrogant enough to not cover their tracks — look how brazen that crook Chris Collins was — the first sitting member of Congress to endorse Trump. In any case, they won’t relish the attention.
The idea that our society is a meritocracy was a sick joke from day one, but the absurdity of the notion has snowballed in the Trump era. That’s a reason for despair, but it’s also an opportunity to say we’re not putting up with this bullshit anymore and start taking the necessary actions to turn things around.
We’ll likely never have as vivid an embodiment of the problem as the sack of gold-plated goo currently occupying the Oval Office and his entourage of nepotism hires, grifters and suck-ups. That makes this the ideal time to tackle a problem that has been undermining our society for decades — before it’s too late.
Gelfling 545
Anybody do the WAPO Quiz today? i was not surprised by whom I most agreed with but by how many I largely agreed with.
MattF
There’s a couple of ways to make money in the financial world. One is to pick the pockets of people who don’t know what they’re doing. This can be profitable— but, since the advent of low-cost index funds, it’s not such a sure thing any more, particularly if you have scruples.
The other way is to somehow get an edge. It won’t be a big edge, and working it for decades on end won’t be fun— but it’s real money and will pay for all those pretty toys. Membership in Trump’s club is an edge. You will have to socialize with awful people, but…
MattF
Stray fingers in edit window.
Omnes Omnibus
By the end of the last Gilded Age, we managed to get our shit together and bust trusts, regulate industries, and even impose an income tax. There is no reason to think that we cannot do the 21st Century version of the same thing. People just need to show up and vote and make sure others can do the same.
Fuck despair.
Martin
You wouldn’t need to cover your tracks.
It’s unclear that this is even illegal. The STOCK act prevents Trump himself from profiting from this information, but once he tells guests at Mar A Lago, it basically becomes public information. I know that’s dubious because how the fuck would you or I know about it, but my guess is that the courts would declare that to be sufficiently public.
I’ve got a little experience with this as money I’ve made in the stock market. I know people inside the companies that I trade, and I can’t trade on the information they tell me. Out of safety, we never, ever talk about upcoming things – I simply don’t ask because I don’t want them to feel obligated to tell me and then get fired. But I will get a story after the fact. But I will sometimes see things they reveal in a public setting – usually a public message board. Then I can trade on it. Again, out of caution, I document that information in the event the SEC comes a calling – what I read, where I read it, when I read it, and when I traded on it. That way, I’m not trying to defend myself against a hypothetical private conversation with this person that never took place.
So, if a public official (Trump) reveals information in a presumably public setting (Mar A Lago) and I happen to hear it, I should be good to trade on it without covering my tracks. And that’s because the law is not designed for the President to be a criminal.
So, Warren may not be looking to throw these Trump guests in prison, merely to highlight that there are few corners if any that the President will not extend his reckless behavior.
Omnes Omnibus
@Gelfling 545: Funny. Democrats mainly agree with one another.
Kent
@Martin: You are right. No one is actually going to get convicted for something like this. But it is certainly a good look for Warren to be pointing out that the taint of corruption is with Trump basically everywhere he goes and with everything he does. Put them on the defensive.
There is the other issue that most of these people who hang around Trump, including the man himself, probably don’t have finances that can stand up to any sort of real scrutiny. If they weren’t doing insider trading in this particular instance, their books are probably full of all manner of shady deals. That’s who they are and how they run. Actual LEGITIMATE entrepreneurs are too busy to be spending their weekends with their noses up Trump’s ass at Mar a Lago.
The Dangerman
@Martin:
Which is a shame. I’d like to see him, in a orange jumpsuit, at the side of the freeway, collecting trash into Melania’s outfit from last night.
/hefty (both Donald and the bag)
ETA: I was at a Chinese place years ago and overheard a conversation related to a publicly traded company at the table behind me. I considered trading on it but didn’t, dammit (their stock went up nicely, which could have been totally unrelated, of course).
hitchhiker
Thanks for the reminder about Chris Collins. I’d forgotten all about that grifter and his greedy family, who trusted him to be able to evaluate the worth of a treatment for MS.
I write about neuroscience. There’s no way a lay person should be sticking hundreds of thousands of dollars into a startup company with a treatment that has not been tested in people. It’s a giant bet, and if you’re not wealthy enough to take the hit you shouldn’t be putting your chips on that square.
Collins didn’t know what he was doing. He got his son involved, who got his fiance and her family involved. Apparently the whole bunch of them were willing to take the big payoff if it happened, but not to take the loss if that’s how it went.
I hope they get jail time.
Roger Moore
@MattF:
If you’re the kind of person who sees looking for that kind of edge to be an acceptable way of making money, you’ll love it there.
Omnes Omnibus
@Martin: Trump’s club is private, right? Information acquired there is not public information. Public info is available to anyone who looks for it. Stuff blabbed at a private club is insider info.
Roger Moore
@Martin:
I think the second of those is questionable. Mar-a-Lago is a private club, not a public setting, so it’s not at all clear to me that information released there would be considered to be public.
ETA: In practice, I think it would depend on how Trump revealed the information. If he made a pronouncement of it to everyone in the main dining room, that might count as public. But if he said it only to the people he was personally dining with, it would likely be considered private. This is the same as anywhere else. Just because you’re in a public place (which Mar-a-Lago is not) doesn’t mean anything you say is public information.
catclub
Do you read Matt Levine at Bloomberg? He has lots of letters on insider trading. I think he would argue that, Depending on your fiduciary responsibility to that company, you could trade on that info. If the person who told you is breaking their fiduciary responsibility by telling you.
But as Matt Levine also always says: NOT LEGAL ADVICE.
It appears that in France trading on insider information, no matter how obtained, is illegal. But in principle, that is not the case in the US, you can trade on non-public information if you do not have a fiduciary responsibility to keep it secret.
Johnnybuck
@Gelfling 545: Most agree with Mayor Pete, still aint voting for him.
catclub
This reminds me of two things. 1) General Mattis and Thoranos.
2) Gell-Mann Amnesia: If you read something about a topic you know lot about, it is quite likely they got huge amounts wrong, and you as an expert know that. But then when you read the next article about something you don’t know about, you accept everything in the article as probably correct.
Worth remembering.
mrmoshpotato
@Gelfling 545: Hard to do the quiz when it’s behind a damned paywall. :)
Jay
Legal or illegal, it’s the “make the Bastards deny it” gambit.
By rimming Lord Small Hands in “public”, they have passed on the libel/slander protections afforded to non-public citizens.
mrmoshpotato
@The Dangerman:
LOL Well done!
Joe Falco
@Gelfling 545:
I took the quiz just now. It seems I agree mostly with Senators Warren and Sanders. That’s no big surprise to me.
?BillinGlendaleCA
@Omnes Omnibus: I was thinking the same thing, not only is it a private club, the fucking President owns it and the members are paying him to be members.
Brachiator
It seems like only yesterday when purity ponies were having the vapors over Hillary Clinton giving speeches to Wall Street.
Chief Oshkosh
@Gelfling 545:
1. Warren
2. Buttigieg
Not sure how that happened. Reality: I will vote for anyone, including Tulsi (!), that is running against the child-kidnapping, child-caging shitstain whose fat, flabby ass is currently spreading like The Blob on some taxpayer-purchased chair or toilet.
Martin
@catclub: Insider trading is further limited by the role of the person in the company. I don’t talk to any of those people, so I’m probably free and clear anyway. That said, I see no reason to take the risk.
jc
Think of the temptation, when Trump realized he could (abuse his power to) influence the stock market, and then profit from that influence. Perhaps one of his corrupt business CEO golfing buddies hinted to him that if he were to make a certain public statement at a certain time, the stock value of company X would rise or fall. And if it were executed carefully, both Trump and his buddy could profit handsomely, on the QT. Simplicity itself.
https://www.vanityfair.com/news/2019/10/the-mystery-of-the-trump-chaos-trades
bemused
@Omnes Omnibus:
I’m an old and remember being taught about trusts, monopolies, etc in school. I can’t imagine how these topics are taught in schools now or if they are even in school curriculums anymore.
zhena gogolia
@Gelfling 545:
Haha, my top two are Buttigieg and Yang, followed by Bloomberg and Warren!
But this poll is about your opinions, not necessarily about who you think is a good GE candidate.
I was happy to see that my bottom two were Sanders and Gabbard. Biden was in the middle.
Snarki, child of Loki
I’m sure that the Deplorable Five (“lawless” John, Stripsearch, Token, Kav, and Squi) will come up with some tortured reading of the Confederate constitution that makes insider trading legal if you’re a GOP richy-rich.
It’s what they do, and one of many reasons that they’re deplorable.
jonas
@MattF: What does Jeremy Irons say in that great scene in Margin Call? “There are three ways to make a living in this business: be first, be smarter, or cheat. Now I don’t cheat…and although I like to think we have some pretty smart people in this building, it sure is a hell of a lot easier to just be first!”
Trump and the Mar-a-Lago crowd definitely aren’t the smart set, so is it cheat or be first? Porque no los dos?
catclub
So there is still a problem with the plan.
Barbara
@Martin:
The SEC’s position is that anyone with awareness of material information that’s not publicly available can be found guilty of illegal insider trading if that person acts on that information and either dumps or purchases securities. There are situations where a person’s insider status or duty to refrain from sharing or trading on information has been successfully challenged, so I do think the SEC’s position is somewhat extreme. But anyone who is an employee of a company who has access to non-public information is almost certainly considered to be an insider subject to insider trading prohibitions
ETA: You are also right that if an employee is found to have shared non-public information the company will feel constrained to fire them, or else risk being seen as complicit in their actions.
Suzanne
@Chief Oshkosh:
A toilet which he flushes fifteen times in order to wash down all of the deep-fried rotted garbage he shoves into that vagina dentata on his face during the oh-too-brief moments when that terrible word salad isn’t coming out of it.
CaseyL
Warren, Buttigieg, and… Steyer (!!??)
That’s quite an ideological spread. OTOH, Biden and I disagree only less than I disagree with Gabbard and Sanders, which is a bit surprising. OTOOH, I know where those disagreements are, and they’re not deal breakers.
Though, to be honest, I have no deal breakers with any of the candidates, except Gabbard and Sanders. If either of them winds up as the Democratic nominee, I’m gonna have to do some serious drinking*, nose-holding*, and praying for an asteroid.
ETA: *Not at the same time, mind you.
Eural Joiner
@Gelfling 545:
WOW – I overwhelmingly agreed with Warren (my top pick) but at the bottom of my list was Biden who I think will actually get the nomination (at this point) and with whom I thought I agreed a lot more! Interesting :)
noname
@Gelfling 545: I was not surprised that I got Warren first but was really surprised that I got Steyer just 2 points behind her!
Roger Moore
@zhena gogolia:
It is also unweighted. It’s possible you agree with one candidate on more issues but with another candidate on the issues you think are most important. And, for that matter, that quiz was almost entirely about domestic issues, and the international issue it touched on was related to trade. If you think foreign policy is the most important issue when selecting a President, that quiz isn’t going to tell you very much.
Baud
@Omnes Omnibus:
That’s what makes them untrustworthy.
zhena gogolia
@Roger Moore:
Yeah, it was pretty stupid. A lot of it was framed as “Should the U.S. consider . . .” Well, I think we should consider a lot of things, that doesn’t mean they will turn out to be feasible (universal basic income, for one).
Jay
The post is titled “Scammers and Skimmers” after all.
noname
@Roger Moore: Agreed, I was surprised that I had Steyer as my second choice but I disagree with his views on the two issues most important to me which is why he was never on my radar as a likely choice.
hitchhiker
@catclub:
Right. I hang around with scientists enough to recognize the mark of a good one: they never go beyond what they’ve established in their own labs, and they’re very aware of how much they don’t know about things outside their small circle of data.
When lay people start talking about something like neuroscience, we have to use metaphors and analogies almost immediately. There’s just not enough generalized understanding about how information moves to and from the brain.
And when you understand a complex thing only by way of an analogy designed to help you focus on certain aspects of it, you don’t understand that thing.
What gets me is that Collins et al were willing to place these giant bets, but tried to get their money off the table when it went bad, and then lied about it to regulators. They would have been glad to accept all the upside, and claimed to be good citizens for helping make cures possible at the same time.
Roger Moore
@jonas:
The key thing is that the rules are set up to make it hard to be first without breaking the rules. Companies are supposed to disclose important information publicly, at which point it’s hard to be the first to respond to it. So being first either means cheating by getting non-public information or being smart and hard working and figuring out something based on public information that other people haven’t realized yet.
Dorothy A. Winsor
I suspect this shows that the D candidates share most positions.
Kent
My top two were Klobuchar and Steyer. My bottom two were Gabi and Sanders.
What makes this mostly pointless is that all f the questions were about legislative proposals of which the president has very limited power. 95% of the job of the next democratic president will be (1) repairing our standing overseas, and (2) repairing and purging the stench of Trumpism from the executive branch regulatory state. None of those questions go to any of the issues or skills that will consume the next presidency. To the extent that the next president will accomplish anything, it will largely be through executive actions and not legislation.
RobertB
@Martin: One of about three things I remember from college way back when was a Finance professor telling me this: if I made trades after I saw a company’s factory catch on fire, based on the fire that I saw in public, then I would be making an illegal insider trade. Even though the fact of the fire wasn’t secret, it wasn’t public knowledge. It feels like Trump’s party is the same situation; not secret, but not _public_ knowledge.
Kent
@Dorothy A. Winsor: Yes, they deliberately had to find specific tailored questions to parse differences. Such as universal gun registration which isn’t really something widely promoted by anyone compared to more mundane forms of gun control like background checks and assault weapons bans. Or nuclear power which is kind of a non-issue in terms of presidential policy and mainly a Yang thing.
They could just as easily have found 50 legitimate policy questions on which all the candidates agreed. Like rejoining the Paris climate accords. Or reinstating the nuclear agreement with Iran. Or rolling back Trump’s tax cuts.
Martin
@Roger Moore: Yeah, that’s why I qualified it the way I did.
The problem is that insider trading by way of officers of the company is far better defined than what the STOCK act covers. Yes, if the CEO of Lockheed spoke at Mar A Lago and said that he expects earnings to go up due to an as yet undisclosed war, you can’t trade on that. And what constitutes whether information is public or not is is reasonably clearly laid out.
But the president isn’t an officer of Lockheed. He’s describing outside events that could affect any of a range of companies. He’s not even describing a specific contract with Lockheed, just an event which may or may not affect Lockheed. None of the SEC rules apply to him. The STOCK act does, but it only prevents government employees from trading on that information – not private individuals who get that information from government officials (doing a proxy trade is illegal because they can’t accept the proceeds as as gift). And the STOCK act doesn’t try to define when information becomes public. Presumably any public reporting would count, any press release or press conference, any presentation before Congress in a public hearing, etc. But could Trump announce this at Mar A Lago, I have my wife post on Twitter that Trump said this and then I go and trade on it. It’s now public by way of my wife.
I think there’s zero chance the courts would say any wrongdoing took place here. The trades were by private sector individuals, which the law doesn’t cover. The information came in a private club, but it’s not private to the government and that I think is how they’d read it.
Jay
Brachiator
@Gelfling 545:
Hmm. I agreed most with Yang, with a Biden, Bloomberg, Mayor Pete, Klobuchar cluster in second place.
This is fairly reasonable. Some of my answers were gut feeling or should consider responses, not hard agree/disagree.
But as with others, this is not necessarily the same as who I would most like to see elected.
I think I can say that I like all the current candidates, and will happily support the eventual nominee, but that none of them is my strong favorite.
And maybe it is nostalgia, but I think that Obama, and in second place (not best candidate ever) Hillary Clinton were titans compared to the present bunch. I wonder why there was not a stronger group of candidates to emerge as opponents to Trump.
And note, I suppose that I really liked Harris, and probably lean strongly toward Warren compared to the others.
I notice a lot of Internet fervor among some of the yoots for Bernie. I don’t know if this will translate into primary votes.
The upcoming debate, if we could only get intelligent questions, could be interesting.
Just One More Canuck
@Gelfling 545:
Warren, Yang, Bloomberg were my top 3, Wilmer, Biden and Gabbard the bottom three. Of course, as a Canadian, my thoughts dont matter
Jay
@Martin:
the legality or illegality really doesn’t matter. The SEC is never going to do anything.
what matters is the “accusations” justifiably paint the Southern White Supremacy House as an exclusive and corrupt club, that the average MAGAt is not “in”, and would never be allowed to join.
”make them deny it”.
Roger Moore
@hitchhiker:
I think I would put it slightly differently. The mark of a good scientist is that they’re always thinking about how they know something, not just what they know. I will talk about what labs other than my own have done, but I will always be clear that this is what I’ve seen reported, not what I’ve done myself. I will also keep in mind what I know about the people doing the reporting. If it’s a lab I think does a good, careful job, I will mention it fairly straight, but if I think they cut corners I will be happy to say I’m skeptical of their claims.
sdhays
@Omnes Omnibus: He’s also profiting from it because he’s charging extra for the “random access” he provides to the people who pay the fee.
Brachiator
@Martin:
Not illegal, perhaps, but scammy, scummy, and unethical. Much worse than the phony attempt to look for Hunter Biden’s corruption or to try to transfer any supposed taint to Joe Biden.
Membership to Trump’s club also buys access to information. It may be loose talk and not specific, but it is still influence peddling.
Butter Emails
@Martin:
The counter to this is that if the CEO of a fortune 500 company went blabbing nonpublic information to people who knew him at his country club and they traded on it, they’d be guilty of insider trading. Blabbing things to people at a private club does not count as making information public.
Joe Falco
@zhena gogolia:
Agreed. The quiz could have thrown in over questions like that where I believe we should consider but doesn’t give any definitive plan on how issue x could be solved. For example, it could have asked about reparations and whether the US government should “consider” it, which is the lowest of low bars about the issue. Of course, we should consider it, but the quiz isn’t going to offer, “yes, we should consider and establish a comprehensive system of reparations through direct cash payments ” or some other possible solution. It’s a bit dumb, but the quiz isn’t meant to be smart.
Omnes Omnibus
@Butter Emails: Exactly.
sdhays
@RobertB: Wait, so if I’m walking down the street and see Factory A for Company B, with which I have no affiliation whatsoever, on fire and I get online and make some trades based on that, I can be charged with insider trading? Or did you mean that if you work for a company and see its factory on fire, you could be charged?
Kent
I’ve spent my whole life around science, as a marine fisheries biologist for NOAA in my first career and as a science teacher in my second career.
I would disagree with your statement. True scientists see connections and relationships between what they observe, and what others may have observed and are able to apply their observations in creative and universal ways. Newton, for example, was a genius, because he observed the movements of the stars and planets, and the movements of the tides, and the falling of an apple from a tree (as legend has it) and was able to make the connections between all of these phenomena into a universal law of gravitation that explains the universe, both seen and unseen. He did not simply collect reams of tidal data and years of observations of the movement of planets and limit his observations to just those data. Gravity and and the movement of the tides and planets were things that humans had observed and collected data on for millennia. It took Newton to make the connections between seemingly unrelated phenomena into a single universal law of gravitation.
Likewise Darwin observed finches and tortoises in the Galapagos and applied his observations into universal theories of evolution that explained the development of all living things including things he had never seen but was able to predict, such as the discovery of the structure of DNA a century later.
RobertB
@sdhays: The first. If I’m walking down the street and I see Company B’s factory burst into flames, and I run to the nearest pay phone (this was in 198x) and I trade in Company B, then I’m in trouble for insider trading. He was emphasizing that it wasn’t public knowledge. That making trades in Company A in that situation was just as illegal as if you’d gotten a copy of Company B’s quarterly report ahead of time. Boggled my mind back then, hence why it was one of the few things from college that stuck.
joel hanes
@Chief Oshkosh:
1. Warren
2. Buttigieg
Same.
Least: Sanders Gabbard
sdhays
@RobertB: That seems really hard to enforce. Exactly when is something that is happening in public considered public knowledge?
What if I’m walking down the street and I see Tim Cook running around naked and snorting crack off the curb in Time Square? When can I short Apple stock?
Omnes Omnibus
@sdhays: News report.
burnspbesq
@Martin:
Don’t take the bar exam next month. California tests on securities law, and you’re a little deficient in that area.
Trump’s blabbering is the epitome of material non-public information. Anyone who traded on it would be at risk if we still had an SEC that took its enforcement responsibilities seriously.
CarolPW
@zhena gogolia: They were my bottom two as well! Klobuchar was first, followed by Bloomberg, Warren and Steyer. But since as far as I am concerned this is not a policy election, I don’t care whether or not I agree with their policy or not. The fact that Bernie and Tulsi agree with me least isn’t very important. The fact that I hate them both is much more dispositive as far as voting goes.
Roger Moore
@Kent:
And Newton didn’t rely exclusively on his own astronomical observations. He also relied on the observations of other astronomers, like Halley and Flamsteed. This is actually an essential part of scientific process. We can’t do everything ourselves, or we’d be limited to the knowledge that could be accumulated by one person in one lifetime. We have to build on the work of others, though we must remember that they are fallible humans. As Newton famously said, “If I have seen further it is by standing on the shoulders of Giants.”
Gelfling 545
@Omnes Omnibus: If you listen to the media you get the impression that there are insurmountable divisions. IRL, not so much. Also the crowded field of candidates has made it difficult to form a good understanding of the various positions or how slight the diversions really are. Except Tulsi, of course, who appears to be the Fox News candidate.
Gelfling 545
@CaseyL: My daughter was shocked to find that Steyer was her 3rd too.
Adri
@Gelfling 545: Interesting Steyer, Klobuchar and Warren. Never considered Steyer, saw Klobuchar recently and liked her very much and Warren is my top choice. Bernie and Tulsi at the bottom…as they should be.
r€nato
Good for Elizabeth.
I can’t prove it but I know it’s true: Trump spent much of last summer and early fall manipulating markets with his tweets about the China deal/tariffs. Talk it up, stocks roar upwards. Talk it down, stocks sink.
If you think he and his Crime Family weren’t getting a heads-up about an upcoming tweet on that topic, I have a Trump University degree program I’d like to speak to you about. Why waste a perfectly good opportunity to make easy money?