Posts tagged with: Wall Street

tradingplacesFor most of my life, much of what I’ve learned about the world came from watching movies. This was especially true in 1983, when I was in junior high. That was the year I learned about astronauts (The Right Stuff), thermonuclear war (War Games), and ewoks (Return of the Jedi). I also learned about financial crimes—specifically insider trading— from the Eddie Murphy/Dan Akroyd comedy, Trading Places.

If you’ve forgotten the plot, here’s a brief summary by Gary Gensler, the former Chairperson of the Commodity Futures Trading Commission. In testimony before Congress, Gensler said,

In the movie “Trading Places,” starring Eddie Murphy, the Duke brothers intended to profit from trades in frozen concentrated orange juice futures contracts using an illicitly obtained and not yet public Department of Agriculture orange crop report. Characters played by Eddie Murphy and Dan Aykroyd intercept the misappropriated report and trade on it to profit and ruin the Duke brothers. In real life, using such misappropriated government information actually is not illegal under our statute. To protect our markets, we have recommended what we call the “Eddie Murphy” rule to ban insider trading using nonpublic information misappropriated from a government source.

Turns out I wasn’t wasting my time on a silly comedy—I was learning about a future commodities regulation.

Yet aside from the “Eddie Murphy” rule, I don’t actually know that much about insider trading. I also hadn’t given it much thought since watching Gordon Gekko get rich off inside information in Wall Street (1987). But this week I listened to an intriguing Planet Money podcast about the topic. The show’s hosts, David Kestenbaum and Jacob Goldstein, ask a question that I hadn’t considered before: What makes insider trading wrong?

Let’s first define what we mean by the term. As the Securities and Exchange Commission explains,
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bernie-sanders-photo1In last Tuesday’s Democratic debate, Senator Bernie Sanders stayed true to his famed aversion to capitalism, proclaiming the fanciful virtues of “democratic socialism.” Yet when prodded by Anderson Cooper — who asked, “you don’t consider yourself a capitalist?” — Sanders responded not by attacking free markets, but by targeting a more popular target of discontent: Wall Street and the banks.

“Do I consider myself part of the casino capitalist process by which so few have so much and so many have so little, by which Wall Street’s greed and recklessness wrecked this economy?” Sanders asked. “No, I don’t.”

One could be forgiven for not understanding what Sanders means by “casino capitalism.” Is it crony capitalism, in which legislative favors are secured by the rich and powerful (which conservatives also disdain)? Is it bailouts for the big banks (which, again, conservatives also disdain)? Is it basic trade and exchange on a large, complex scale, and if so, at what size does it become problematic? Does he despise the stock exchange itself? Too loud with all its blinky lights and bells? (more…)

Work-New1Originally written in 1982, Lester DeKoster’s small book, Work: The Meaning of Your Life, has had a tremendous impact on the hearts and minds of many, reorienting our attitudes and amplifying our visions about all that, at first, might seem mundane. More recently, the book’s core thesis was put on display in Acton’s film series, For the Life of the Worldparticularly in the episode on creative service.

Christian’s Library Press has now re-issued the book, complete with new cover art and a hearty new afterword by Greg Forster.

In the afterword, Forster revisits the book in light of the broader faith and work movement, noting DeKoster’s keen awareness of the struggles and hardships we often experience at work, and the hope of Christ in the midst of such struggles.

Although the book applies to every occupation and vocation — from the Wall Street executive to the independent artist to the stay-at-home mother — one of DeKoster’s primary audiences in his own life was blue-collar workers, who he routinely taught in night classes at Calvin College. “His message of hope to them is an outstanding model for our movement today,” Forster writes.

Indeed, DeKoster realized that without a proper understanding of God’s ultimate purposes, we will find ourselves trapped in a “wilderness of work,” lost and without meaning. But when we understand God’s grand design for all things, everything changes. (more…)

Rosa’s Fresh Pizza in Philadelphia has now given away more than 10,000 slices of pizza, using a unique “pay-it-forward” system where “customers can pre-purchase $1 slices for those in need.”

The story is inspiring on a number of levels, illuminating the power of business to channel the best of humanity toward meeting complex needs in new and unexpected ways, often quite spontaneously.

The owner, Mason Wartman, left his job on Wall Street to start the restaurant, following his vocational aspirations and bringing a new product and service to this Philadelphia neighborhood. This is a great social benefit in and of itself, and yet the owner and his customers went further, responding to other signals in their community through generosity and innovation from the bottom up. As several homeless people in the video explain, the grace-filled approach of the business and its customers made a remarkable impact, giving them peace, encouragement, and empowerment. (more…)

At least Obamacare comes at us head on. The greater legislative threat may be the one that most Americans have never heard of. Economist Scott Powell and Acton friend Jay Richards explain in a new piece in Barron’s:

While Obamacare received more attention, the Wall Street Reform and Consumer Protection Act, also known as Dodd-Frank after its Senate and House sponsors, … unleashed a new regulatory body, the Consumer Financial Protection Bureau, to operate with unprecedented power.

Dodd-Frank became law in 2010 and is supposed to avert the next financial crisis. Yet banks are still too big to fail and Fannie Mae and Freddie Mac remain wards of the state, while the CFPB has been given sweeping authority over consumer credit and other financial products and services that played no significant role in the crisis of 2008.

Powell and Richards then offer some specifics:
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Acton Institute is once again offering a free ebook; this time, Banking, Justice and the Common Good. From now until May 5, 2012 at 3 a.m. EST, you can click on this link and download the monograph for free.

We’d appreciate your comments and thoughts on the book. When you’ve finished, please go to the Amazon page for the book and leave a review.

Blog author: kspence
Thursday, October 6, 2011
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My sister has a small pillow in her bedroom that’s embroidered with the words “She who dies with the most shoes wins.” I’m sure Lloyd Blankfein’s daughter has one just like it. And you’d think that the patchouli-scented Occupy Wall Street crowd might not like such a pillow, but you’d be wrong, as Ray Nothstine pointed out in this week’s Acton Commentary. The anger at Zuccotti Park isn’t sparked by greed on Wall Street, it’s sparked by greed in Zuccotti Park.

Unions that have joined the Occupy Wall Street protests are signing on to these demands for government-facilitated greed. The local Transport Workers Union spokesman told CNN,

Their goals are our goals. They brought a spotlight on issues that we’ve believed in for quite some time now. … Wall Street caused the implosion in the first place and is getting away scot-free while workers, transit workers, everybody, is forced to pay for their excesses.

So in return, the Transport Workers Union demands free art school for everyone. How that is in the best interest of the members of Local 100 is beyond me, because in the end, their union is parroting Gordon Gecko’s “Greed is good” speech from Wall Street.

The Transport Workers, the SEIU, and other labor groups pretend to align themselves with a groundswell of moral outrage directed at thieving, manipulative fat cats, but the outrage isn’t moral at all. It’s appetitive, and that’s not the political urge of a free society.

Author’s Note: My sister, an extremely smart and capable young lady, complains that I make her sound “like a complete airhead.” That is not at all the case, so if this post gave you that impression, know that she is very poor-in-spirit.