Someone at the Pentagon read Shockwave Rider over the weekend

[Sampo Syreeni]

On 2003-08-07, Steve Schear uttered:

>Insider trading brings prices closer to their fair values; insiders
>enhance market efficiency.

Precisely. In terms of the efficient market hypothesis, all arbitrage
possibilities will usually have been exploited by others, so the only
consistent way to get a net win is to bring new information into the
market. Nowadays insiders can do that, so they win. But the only reason
they have their fresh information is that corporations do not give out the
details of their work as they unveil, before individual decision makers
can easily interfere with their knowledge of the aggregates. Hence, the
free market actually encourages full disclosure, in the exact form the No
Logo -- or whathaveyou -- anti-globalisation folks want. In the free
market, full disclosure boils down to shareholders disliking insider
trading, which ought to be a powerful incentive to any management. What
the anti-capitalist people do not seem to get is that the *real* problem
originates with SEC oversight and its international counterparts, and not
with the private market.

It's tragic, really. The market usually tends to more democracy and
openness than democracy itself, yet the people raving about the necessity
of democratic decision making always push for more oversight. While doing
so, they hurt their own interests, and ours too. That's just stupid, plain
and simple.
-- 
Sampo Syreeni, aka decoy - mailto:decoy at iki.fi, tel:+358-50-5756111
student/math+cs/helsinki university, http://www.iki.fi/~decoy/front
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