Inside Information

Did you ever wonder why go-getters go into government?  It generally isn’t to “serve the public” as they often profess.  Plain and simple, it is to get wealthy.  And the way that they get wealthy is most often with inside information.  Yes, yes I know that private-sector people go to jail or pay big fines for trading in tidbits of data that the rest of us don’t have access to (see: Bloomberg Story ), but just look at the number of millionaires who are in Congress ... many of whom were relative paupers before they went to Washington.  As a perfect example of such unfair leverage, just recently the President of Cyprus transferred millions of Euros out of his country right before the banks were shut down and depositors lost large chunks of their savings … see: Intellihub Story

Remember John F. Kennedy buying a lifetime’s worth of Cuban cigars just before he imposed an embargo on that country?  This vignette is chuckled about now but it is representative of the type of advantage insiders in government have.  It was just last summer that Congress passed a revised law that forbade its membership from trading on privileged information that they picked up during their closed-door sessions … see: CNN Story.  However, the ACLU and this country’s judiciary seems to be rolling back even this sensible law … see: Jurist Story .

When I was a callow youth I was a investment analyst on Wall Street and, thus, I have seen from the inside what being in the catbird seat can do for one’s bank account.  I had to live under very strict guidelines vis-à-vis insider trading, yet learned that there was quite a bit of slew still in these restrictions.  I also quickly learned to ignore whispered tips that I often received ... for they often were given to benefit the tipster and not myself.  But what I did learn was to pay attention to was that flash of fear that crossed the eyes of a CEO when I asked about his company’s outlook … or the overcrowded parking lot of a company which was expecting a current boom to continue indefinitely.  Insider information very often is an elusive concept.

I still remember one of my fellow analysts asking if another analyst thought that XYZ company was a good buy.  The reply he got was, “Well if Arnie Mankowitz’s (our economist) GNP forecast is correct …”  To which he got this terse reply, “Forget Arnie Mankowitz’s forecast, this is real money!”

Afterward: See how the insider trading law has been eviscerated here: Breitbart Story

Cuban Missile Crisis

Other than the Boca Raton Presidential debate, last night was another special occasion.  It was the 50th anniversary of the Cuban missile crisis ... the night when John F. Kennedy went on national television to stare down the Russians and try to force them to remove offensive nuclear missiles from Cuba.  I won't go into the gory details here, but, suffice it to say, most of the world believed that the U.S. and Russia were only hours away from a nuclear Holocaust. If you want more details, see: History Channel.

The purpose of this blog entry is to relate my personal story of this evening full of national angst.  I was, at the time, attending New York University's Graduate School of Business at night working toward an MBA.  This night I had a course in Marketing 101 and I still remember the Professor's name, Hector Lazlo.  Professor Lazlo always passed out a mimeographed outline at the start of each class with bullet points for each topic he would be covering.  This night's topic was The Survey Process.  I was sitting about half-way back in a crowded classroom.  A short way into his lecture, Professor Lazlo got to a bullet point titled "Telephone Survey."  He then, in all seriousness, said: "A telephone survey is when you do a survey over the telephone."

Given the tense atmospherics because of the upcoming JFK speech, this lecture point appeared to me the epitome of inanity.  Basically I said to myself: "The world might be coming to an end tonight and I'm sitting here listening to some asshole tell me that 'a telephone survey is when you do a survey over the telephone'" ... and I started to laugh.  In fact I got a little hysterical.  I was laughing so hard I had to crouch on the floor behind the other students so the Professor wouldn't see me (although he certainly could hear me.)  After a few moments I composed myself and retook my seat.  And I fortunately escaped this incident unscathed

After class, I went home and saw JFK trump Nikita Khrushchev ... and the Ruskies removed the missiles a few days later.  That night, the U.S. also fortunately escaped a nuclear war unscathed.