Category Archives: Business

Insider Trading Laws = Information Socialism

Business, Criminal Injustice, Economy, Fascism, Law, Political Economy, Regulation, South-Africa, The State

The following is from my new column, “Insider Trading Laws = Information Socialism,” now on WND.COM:

“It’s easy to be thrown off scent when trying to divine the vague, ill-defined, unconstitutional laws under which the Securities and Exchange Commission hunts for corporate prey. Suffice it to say that the SEC operates with the understanding that competition in capital markets must proceed from a level playing field. All investors are entitled to the same information advantage irrespective of effort and abilities.

In a word, information socialism.

In their latest efforts to bring ruin to capital markets, SEC blood hounds have ensnared some of the country’s most powerful hedge-fund firms. Indictments are replete with SEC cloak-and-dagger.

There is a Don, ‘Don Chu,’ which is how the accused, Don Ching Trang Chu, is called. A co-conspirator is ‘CC-1.’ And a cooperating witness: ‘CW-1.’ The companies violated, allegedly, are Atheros Communications, Inc. (‘Atheros’), Broadcom Corporation (‘Broadcom’), and ‘Sierra Wireless’—aka ‘The Tech Company.’

… Then there is the ‘The Firm.’ … The ominous entity at the center of the investigation. ….”

The complete column is “Insider Trading Laws = Information Socialism,” now on WND.COM.

Some of you are waiting for, and have been asking about, the publication of Into The Cannibal’s Pot: Lessons For America From Post-Apartheid South Africa. The wait is worse for South Africans who are in the thick of the events my book documents and analyzes—Into The Cannibal’s Pot is a Burkian polemic, steeped in history, reality, fact, and the classical liberal political philosophy.

When I completed the book some months back, the number of Boers murdered was just over 3000. The death toll now stands at 3,756.

The manuscript is currently under consideration. If all fails, fear not (with your help), someone will see to it that the true story of the New South Africa (“Rambo Nation”), as detailed in Into The Cannibal’s Pot, is told. Not everyone inhabits the solipsistic universe in which most American “writers” (and publishers) are mired. Five magnificent men (as writers, thinkers, and human beings) have returned high Praise For The Cannibal. Thank you; you know who you are.

Have a happy Thanksgiving.

“Victims” Of Greed … Their Own

Business, Criminal Injustice, Debt, Economy, Regulation, Socialism

Now here’s a victims’ fund we can all get behind: delinquent borrowers being foreclosed upon by wicked bank executives. The WSJ:

‘Fund in works for victims of foreclosure mess,” announced the Washington Post’s front page yesterday. Sorry to report that the Post was not referring to taxpayers who have already spent hundreds of billions of dollars cleaning up this mess.

So who exactly are the victims in this story? The Post describes “homeowners who were wronged,” but the writers are also not referring to the roughly 90% of mortgage borrowers who are paying on time. As for the proposed compensation fund, the Post compares it to those set up for victims of the Gulf oil spill, the shootings at Virginia Tech and the terrorist attacks of September 11, 2001.

Readers may begin to suspect that one of these funds is not like the others. For starters, we’re not aware of any delinquent borrowers being killed by bank executives. In fact it’s not easy to find any injury at all. The Post doesn’t name anyone who’s been harmed, and neither did Connecticut Senator Christopher Dodd as he opened Tuesday’s Banking Committee hearing on the problems in the mortgage servicing industry. Don’t expect any further clarification at Thursday’s House Financial Services headline hunt.

Readers will recall that the foreclosure mini-scandal began in September with revelations that “robo-signers” at mortgage firms were signing foreclosure documents that they had not personally reviewed. Instead, they had improperly relied on the work of colleagues.

“[I]f a settlement transfers more wealth from investors and taxpayers (who now stand behind most mortgages) to delinquent borrowers, the least the attorneys general could do is stop calling them victims.”

MORE.

Oh, come on: is that the best you can do? How about Moochers? Looters? You’re right; that’s too mild too.

Barefoot In Bollywood

Barack Obama, Business, English, Free Markets, Outsourcing, Regulation, Technology, Trade

That’s our First Lady, Mrs. Michelle Obama. “Almost immediately after arriving at the university [of Mumbai’s] library, she kicked off her flats and joined in a game of vocabulary-building hopscotch with the 8- to 13-year-old orphans and runaways who receive English-language instruction from Make a Difference volunteers,” reports CBC.

“I love dancing. Oh that was fun!’ Mrs. Obama said after they danced to the theme song from the Bollywood movie ‘Rang de Basanti.'”

A grass skirt and a pail of water on her head would have completed Mrs. Obama’s regal regalia. (What horrid “music” she’s bumping and grinding to.)

It’s interesting that these kids are receiving English-language instruction. Hardly something Michelle would be fighting for back at home. She’d be the “English as a Second Language ‘Program” advocate.

Meanwhile, Michelle’s less earthy husband is talking a good game against outsourcing, and doing what he does best: central planning, promising tax breaks to companies that create jobs in America.

Strange: the president visits India, which is outsourcing central, only to tell his put-upon hosts that he wants to discourage their bread-and-butter industry.

Obama would do better to ponder the following: In the U.S., companies endure endless, punishing, government-imposed regulations, which make doing business and staying competitive increasingly difficult. Foreign investors in China and India are not subject to more than 180 federal labor laws; to an Equal Employment Opportunity Commission, an Occupational Safety and Health Administration, an IRS and an EPA; or to a work force where merit is marred by affirmative action. To the cost of the assorted alphabet soup of regulatory agencies a corporation must pay off in the U.S., add exorbitant corporate taxes and expenses like workers compensation insurance … as well as the cost of a government rape known as Social Security.

Factored into the wage price the corporation pays are, thus, large government-imposed costs. The company’s before-tax wage package must offset the cost of the income-tax burden as well as the cost of Social Security. Without the onerous government taxes, this American employee would cost the firm 30 to 40 percent less.

Consider that the annual Social Security burden alone on an American high-tech employee, borne by the employer, is the equivalent of the annual salary of a high-tech worker living well in India—and the logic of outsourcing is self-evident!

Ron Hira, an associate professor of public policy at the Rochester Institute of Technology and author of the book “Outsourcing America,” knows how corporate America works. Via the WaPo:

“They have successfully built a business model where not only do they offshore large numbers of jobs, but the fraction that remain in the U.S. are filled by lower-paid foreign guest workers … They are often also forced to train their foreign replacements.”

This is indeed the model. You have to be at the top of your game to retain viable employment as an engineer in the US.

UPDATE IV: Forclosure Fracas (Still About Deadbeats)

Business, Debt, Federal Reserve Bank, Law, libertarianism, Private Property, Reason

Vox Day, friend and fellow (libertarian) rebel on WND.COM, has objected to my comments about his bank foreclosure comments in the BAB post titled “Financial Paperwork Crisis (No Conspiracy Thinking, Please).” Vox and I have been exchanging emails on the topic. Vox traces the arguments back-and-forth in his post “A dialogue with Ilana (UPDATED).”

Consider: You’re a homeowners. You have a mortgage with the bank. The title deed is yours; you have a legal right or title to the property. However, this obtains just as long as you honor your mortgage payments. The bank has a lien on the property until you pay-up the mortgage. If you pay your monthly mortgage installments, and the bank has cashed these payments, your bank account will reflect that. If you’ve met these conditions, and the bank, nevertheless, proceeds to foreclose on you—this is an error, and a legal and statistical anomaly; an outlier case.

It is my understanding that Vox refutes the above; says the latter scenario may be the norm, or could easily become the norm due to endemic fraud.

Distilled, I contend that it is almost always true that a necessary condition for a foreclosure is for the homeowner to have failed to make his mortgage payments. It is my understanding that Vox disputes this.

I told Vox that the one article he referred me to “began with a one-case study as its proof. This is statistically worse than insignificant. The article graduated to assertion. Then added another one-case study.” Vox may well be right, “but the data in the column he provided do not prove his case.

I have since Googled some of the terms Vox deploys in his post. One search led me to the Washington Post’s Ezra Klein. When Ezra does get something right it is only by accident. In any event, the Klein article does not support the Day case (as I understood it), namely that the foreclosed upon are being treated unjustly, even routinely robbed of their property.

Understand: I have no dog in the fracas other than the truth; am quite ready to find for Vox. So far, the hard evidence is missing.

Our debate might be delayed for a while, but it will continue. Stay tuned.

UPDATED I (Oct. 18): Difster’s comment hereunder is mostly waffle unless he is able to address what I wrote in the post: has the homeowner being foreclosed upon been paying his debt or not. He can’t. I really can’t abide argument that doesn’t cleave to reality and evidence. Bring me evidence of all the cases of paid-up homeowners who’ve been foreclosed upon. Present that here, please.

UPDATE II: Judging from this tale of woe, the lawyers for the defaulting borrower are themselves using what they consider irregularities of procedure to try and get their delinquent client’s debt forgiven. I am not saying that “MERS, the electronic mortgage tracking system,” and the banks that use it, are following the letter of the law, but what people seem to be skirting here, much to my horror, is that these borrowers owe money they borrowed. You don’t forgive someone’s debt because the debt-holder’s bureaucracy is bad, or even dubious. And you don’t accuse bankers as a group of robbing home owners of title to their homes, because of problems of paper trail. (As I pointed out here, to argue against the bankers, in this case, on the ground that they are, moreover, embroiled in the fractional reserve system is to make an error of logic, maybe even a categorical error. Along the lines of releasing murderers because justice system is corrupt, etc.)

Note too that nowhere do the delinquent borrowers deny that they have not paid their debts, only that they are struggling “to figure out who owns their loans, who can negotiate loan modifications with them, or even how to get a call returned.”

Also: Borrowers are deploying the very argument the bankers are using: it’s the bureaucracy.

What do you know, it seems that, as outlined in this BAB post, “the latest foreclosure crisis is indeed bureaucratic in nature.”

UPDATE III: The thing to take away from Vox’s WND column today is this line: “the law is very clear on the matter: ‘If the chain of title is broken, then the borrower’s loan is no longer secured by the property.'”

This is the positive law. The fact of the borrower’s debt is unchanged. A took from B in order to buy C. That’s another “chain” to keep in mind.

UPDATE IV (Oct. 19): STILL ABOUT DEADBEATS. From all the reports so far, FBN’s Gerri Willis’ being the latest, it is as I said. The defaulters owe boatloads of money. The bankers bungled the paper work in a manner that verges on the criminal. The reality, in as much as property rights go, comports with my distillation on this post and the one linked to it, “Financial Paperwork Crisis (No Conspiracy Thinking, Please).”