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Insider Trading is Not the Problem….BUT ETF’s Will Be!

John Carney now at CNBC.com has a story up on Insider Trading…’Does Silicon Valley have an Insider Trading Problem

Great headline. John is a MASTER.

The proper title is ‘How the fuck are all these young kids on Stocktwits following trends and price movement and learning fast from mentoring to legally make money in the stock market’. That luckily will never be a headline anywhere.

I am not going to go into the very simple and basic requests FINRA and the SEC could implement on social networks to level the playing field, because I see companies (some that I will and have invested in) solve this problem in the free market way.

I will say that letting companies get public before they should be public ( or RE-public as Paul Kedrosky correctly terms it) because the IPO and Sarbanes laws are so f@#$%ked up and being public is so expensive, is here to stay. A healthy IPO market will only heat this PRE-public to RE-Public trend up further.

The problem is actually the bullshit hype that ETF’s have the illusion of diversification and low cost. They do until they don’t and they WON’T. I just can’t tell you when. A liquidity crisis will bring all this back to the forefront as it always does. With the government pouring money into the system, it is just dumb to predict when.

MORE pople need to own pieces of COMPANIES again, not ETF’s as lazy proxies. MORE people need to use the social networks to surface the intense signal that is freely available now from AngelList to TechMeme to Linked in, Stocktwits, an all-time high stream and Twitter.

Insider trading is unstoppable. People want to cheat. Rich people, poor people. Fuck them. Jesus has a better plan for those cheaters than anyone you and I have ever read or heard from. In the meantime, punish the abusers and shame them. Enforce the basic laws that actually exist today.

  • Jboyd1537

    Lots of class with your comments

  • http://marketshotnyc.com MarketShot

    I agree with the comments above. I also have a related article:

    “Why you shouldn’t care about insider trading”
    http://marketshotnyc.com/2010/11/28/insidertrading/

  • http://www.rossgreenspan.com rossgreenspan

    But what about Futures on ETFs? Those are liquid right? Wah-wah-waaaaa. Check the bid/ask sometime…

    http://www.cmegroup.com/trading/equity-index/e-mini-s-and-p-select-sector-index-futures.html

  • http://twitter.com/screwyourdayjob Gangsta Money

    Is this the writing of an angry middle school drop out? With all your swearing and lack of a coherent thought it kind makes you look as if you are writing for Businessinsider.com. keep up the great work!

    • http://www.howardlindzon.com howardlindzon

      No but hopefully I scared u off for good

      • http://twitter.com/screwyourdayjob Gangsta Money

        What you don’t understand that when you swear and curse generally speaking, people stop listening to you. Making the assumption that they are professional. While at the same time your article is the rambling of a madman, nothing coherent one topic to another. Did you graduate from college?

        oh don’t worry about me I make tons of cash… (algorithm, look it up)

  • AbnormalTrader.com

    I disagree – like yelling fire in a theater then waiting around 5 years for the smoke. Risk yes – at AbnormalTrader we’ll take profits in any instrument that offers good risk-reward…. And always protect our backs just in case.

  • http://twitter.com/KNA180 Rick Kenna

    INSIDER TRADING is not a problem especially when you have an EXEMPTION. Read on.

    H.R.1148 – Stop Trading on Congressional Knowledge Act

    Bill Would Bar Insider Trading on Capitol Hill

    By DANNY YADRON
    March 18, 2011

    U.S. lawmakers, their staffers and executive-branch employees would be banned from making investment decisions with nonpublic information under a bill proposed this week by two House Democrats.

    The Stock Act, which was first introduced by Rep. Louise Slaughter (D., N.Y.) in 2006, would create insider-trading rules for government workers who often have privileged access to information. Rep. Tim Walz (D., Minn.) is also behind the latest effort.

    Under the proposed bill, lawmakers and staffers would have to disclose any stock, bond or commodity-futures transactions in excess of $1,000 within 90 days. The bill would also require firms that specialize in helping investors get access to information on Capitol Hill to register with the House and Senate, much like lobbyists.

    The Justice Department is currently investigating an insider-trading case focused largely on these companies, known as expert-network firms. There’s no evidence that their work in Washington is part of that broader investigation.

    Currently, insider-trader rules that govern Wall Street do not apply to members of Congress.

    “This is a matter of equality under the law,” Mr. Walz said in a written statement. “The same standards we have established for Wall Street should apply to Congress. The potential for abuse is obvious.”

    Previous efforts to pass such a measure have failed and there’s no indication that this effort will fare any better.

    The Wall Street Journal published a series of articles last year detailing ways in which lawmakers and their staffers are frequent stock traders using approaches permitted under current congressional rules.

    Write to Danny Yadron at [email protected]

    Copyright ©2011 Dow Jones & Company, Inc. All Rights Reserved

    http://online.wsj.com/article/SB10001424052748703512404576209174028691768.html

  • Tbrown

    I second the emotion from someone who calls himself “Gangsta”?

    I felt dumber for the reading. I went to read these comments because I could not figure out the point of the article. Vapid, arrogant ramblings of a know nothing.

    • http://www.howardlindzon.com howardlindzon

      good to see you wont come back either. thx

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