Yes, of course I see your point and substantially agree. I’m not trying to give you a tough time. I just don’t want to get backed into a corner by accepting a generalization and having it rigidly applied to specific instance. The other thing is that against the backdrop of the , the middle east at the time, a reasonable person would expect a high degree of inexplicability.
But let’s not quibble. Let’s just say flat out that if Bush knew there was a major accounting issue with Harkens, he would expect the stock to go down if and when that news came public.
But it just gets “curiouser and curiouser” as Alice B. Cooper once remarked.
The more I read about this, it just gets muddier and slimier, like noodling for catfish (its a trailer trash thing…you wouldn’t understand).
For instance, the whole Bahrain oil drilling thing. Several commentators have noted that Harken had zero experience in the area of off-shore drilling, yet somehow landed a contract with Barhain, beating out firms that had some real experience.
Now, this is not offered as evidence of corruption. Clearly, the people at Harken brougt Jr. on board for his name value, rather than for his record as an Awl Bidnessman (which might be characterized as “spotty” at best, “laughable” at worst.)
But foreign businessmen, who operate in a vastly different milieu, might be forgiven for concluding that there is some advantage to be gained from dealing with a company with such high connections. Coming from society’s wherein nepotism is rampant, the pristine purity of American business practices might escape them.
It is entirely possible that Harken’s loss of value had to do primarily with the outbreak of the Gulf War, which rendered thier only feasible venture moot.
And then there is the investigation itself. The document from the SEC outlining that investigation is, to say the least, exculpatory. Couldn’t have been better written to preclude any guilt on Jr.'s behalf if it had been written expressly to that end! They unearthed the question, pounded a stake through its heart, and put more nails in its coffin.
Only a scurrilous, untrusting lefty would have even the slightest doubt. Innocence thunders from its every word! It is a veritable buggernaut, unstoppable, unassailable…
Well, perhaps.
For instance, in the last section, it is noted that after the release of the quarterly report that Harken was forced to eat, the stock price dropped, and then recovered, in the space of 24 hours. From this, the SEC investigators concluded that no appreciable impact on stock price had occured. From that, they concluded that even if Jr. had been aware of the Aloha deal and its negative ramifications, it wouldn’t fall under the onlus of insider trading because it didn’t have any effect.
Now that is interesting: is it common, in investigtions of this type, to use “24 hours” as the standard for reaction time, market wise? By the time the report was delivered, Harken was in very bad shape indeed. Hence, to the suspicious mind, the “24 hour” standard seems to serve a pre-arranged purpose. “Seems” must be the operative word, of course, there is no place to go with that.
Further murk: Mr. Doty.
from WorldNetDaily
Yet, I have read another reports that claims that Mr. Doty entirely recused himself from the investigation. Murk. And that line about not interviewing any of the Harken directors. That can’t be right, can it? Though it would explain how Mr. Watson’s veiwpoint was somehow “overlooked”.
Now, I may have missed something, but it further seems to me that the Report of Total Innocence is entirely testimonial: documents are not offered or refered to, the SEC went around to a few people and asked “Is Jr. like, totally, not guilty?” “Yes” they said, and that was that.
And yet, in the communication between Jr.s lawyer, Mr. Jordan, and the SEC we have the odd statement that no enforcement is being entertained, but that no exoneration was implied.
No exoneration! On the face of it, the document states that no only was Jr. totally not guilty of insider trading, he and Laura were both virgins when they married, and the only thing that ever went up Jr.'s nose was his finger. And then only once.
Murk, mud and slime. If I get any deeper in this, I’m gonna start muttering about “grassy knolls” I haven’t the resource to nail this down, and I frankly doubt even the most impartial and thorough investigation could do much better.
The Loyal Prosecution therefore moves for a verdict of “Not Proven”.
(Further, this is starting to bore the bejeesus out of me. Besides, we got the Cheney-Halliburton stuff cooking up, and an unholy stew of light-fingered CEO’s to gaze upon.)
So. elucidator says enough, already. No body else seems to be interested in this, anyway. If you should like to take the occassion as an opportunity to run a “victory lap”, feel free.
Spoken like a true ideologue. Individual actors may think they’re rational, or even be rational, but the overall market is not.
Back to Bush and Enrongate/Tycogate/Worldcomgate/CheneyHalliburtongate as an extension to Harkengate: There are a lot more shoes left to drop, and just in time for the election, aren’t there? I don’t think we’ll be hearing much about how business needs to be freed from the shackles of government regulation yada yada from the GOP side for a while, do you?
I’ll continue to help you, but I am really curious as to what insider information you think Bush had.
Not to bore you any further, but rather than the innuendo, and politicking, I’d like to stick to the issue Of whether it is likely that Bush is a criminal. Again, I’m not looking for proof, just lay it out so that if we had to place odds there’s a 51% chance that Bush committed the crime of insider trading.
And I really really really really would appreciate it if you would answer those questions I’ve posted two or three times like you promised.
Now to your post:
I’ve noodled for catfish in LA, and caught snapping turtles with steel leaders and clorox bottles. My Dad’s a brooklyn boy who became a Marine instructor, and I spent a year living in off base NCO family quarters (read trailer park.) I’ve eaten gator, drank moonshine, and thought marshmallow ambrosia was high cuisine. Up to a month ago, I lived on a farm surrounded by Amish and guys with mullets and wives named Candy.
I’ve even owned sheep.
You go too far sir!!! NEVER EVER again dare to presume on my trailer trash credentials. Or, you will know why the sheep are afraid of me. You will share their fear!
Minor nitpick: It wasn’t the quarterly reports release, but the release of the restatement that is the incident that caused the blip in stock price.
Major nitpick: Do you have a cite for that? The reason that I ask is that what actually happens to the stock, whether it goes up or down, is a moot point for insider trading. I have professional training in this area (the particulars of which I am not allowed to disclose. I know that sounds fishy, but that’t the way it is.)
The test for insider trading is simple:
The person doing the transaction must be in posession of information that is both material, and nonpublic.
They must act on it.
The action of the stock is moot. So, if Bush knew that the SEC was about to cause harkens to restate their earnings, and he sold his stock based on that knowledge, it doesn’t matter if the stock goes straight up when the news is disclosed. He is guilty of insider trading and subject to prosecution.
Most corporation require board members, high ranking executives, and others routinely privy to insider information to get potential transactions cleared before they conduct them, in order to avoid scandal, or legal repercussions. It would be surprising if Bush did not go through such a process with Harkens before he sold the stock. That notwithstanding, the reason I’m asking for a cite is this:
The SEC terminating an ivestigation or deciding not to issue charges simply because the stock didn’t go down too much for too long is highly unusual and suspicious. That is not standard practice, and would in itself be suggestive of a couple of possibilities that might help your arguments.
It would suggest that the SEC conducted an improper investigation, and maybe even a coverup or a conspiracy.
No. Not standard practice, and a very interesting point. Again, I’d love to see a cite. This would be very suggestive that something is rotten in Denmark.
Again, Don’t you think it’s time to drop the Watson thing? It looks to me like a simple misinterpretation. Besides a generalization applied to a specific is a weak argument. It’s even weaker when we have a specific statement to the contrary from a (supposedly) impartial third party charged with the inestigation, like we do from the SEC.
I’m afraid that won’t do. I mean here we are on the third page, and you still haven’t told us what it is that hasn’t been proven.
If you want to quit, that’s fine with me, though I find it very interesting.
However, if you want to leave at this time (which would be a shame, since you’ve just uncovered what I think to be the first potential and real credible piece of evidence that suggests that something innapropriate and illegal may have occured (provided you can cite it, of course.)
But, if you want to abandon, and leave now I’d suggest that our conclusion should be:
“There is no credible evidence to positively suspect that Bush engaged in illegal or innapropriate activity in the sale of his Harkens stock. Therefore, Mr. Krugman’s “Bush is crook,” statement is pure innuendo.”
Would you agree with that conclusion, or would you like to continue?
And, even if you’d like to quit, I’d again appreciate it if you answered my questions, as I would like to pursue this further.
Sam Stone:
No. I stand by “irrational.” There was certainly “irrational exuberance” during 1999 and 2000, and we have that from no less an economic expert than Alan Greenspan himself. I’d certainly consider the markets current crappy status as extreme and irrational as well.
Elucidator:
I’ve been watching the view count. It seems we have a lot of silent interest. Certainly you don’t want to let down all your fans, do you?
Greenspan initially used the phrase "irrational exuberance as part of a rhetorical question. So you can’t use him for support.
Krugman never flat out said, “Bush is a crook”. He is, however, a direct beneficiary of a range of corporate shenanigans, from insider dealings to accounting tricks to corporate welfare. That’s ok, except he is now posing as the water commissioner.
elucidator approaches the trap warily, sniffing the bait.
Gee, all I gotta do is prove beyond a shadow of a doubt that Jr. committed a crime. Is that all? Well, golly gee, mister, sounds like a heck of a deal…SNAP! Shucks, now I go to gnaw off another leg…
He is one with Landru? But why does he carry the totem of the Elephant? And this sheep stuff. Isn’t that the Way of the Aggie?
Darn! Cant cut and paste the .pdf. Short quote, you’ll have to read it.
“The markets reaction to Harken’s earning statement on August 20 could make it difficult to prove that the market considered that information material”
Havent read them all, my ears begin to bleed, but this one is the one that is relevent to your question. Apparently, they thought that if Harken hadn’t dropped to 25 cents in 24 hours, that means that the question fails the third test.
Well, you can view the .pdf yourself. Looks like it says they considered three things required for the crime, and the affect on stock prices was third. When I read it, I thought the standard of 24 hours to gauge the effect of the announcement to be a bit of tortured logic.
Covered in same .pdf document above. What strikes me as odd (if that is the word) is that this is entirely testimonial. The SEC call’s Harken’s lawyer, asks “Is Jr. kosher?” “Kosher!” exclaims the lawyer and that’s that. I kind of wonder why there isn’t any memo extant, outlining the discussion between Jr. and the lawyer.
(Wouldn’t that be a hoot! Ol’ Scylla goes to a site I point out, comes back roaring and snorting “George is a crook!” [Red Foxx]“Here I come Elisabeth! I’m coming!” [/Red Fox]
Apparently, you haven’t seen the page I cited, with all the .pdf documents from SEC. I propose to suspend until you can read them and perhaps render them into translation. You speak Double-wide, right?
(You know, Woodwards and Bernstien were political opposites too, you know. Just thought I’d mention that…)
Please. Please. PLEASE. Stop deliberately misconstruing my posts.
All I’ve asked for, repeatedly and specifically is a reasonable possibility that he did.
This will entail answering the questions I’ve asked.
I will now go and look at your cite, and give some general impressions. I’m at work which means only one window at a time, and I’ll be busy today, but I’ll try for impressions, followed up by details.
In the meantime please answer my questions as you have promised you would.
Rational Markets Theory, although the darling of certain segments of the field, remains a hypothesis. Behavioralists have generated good emperical evidence that markets can indeed be irrational (if one does not use the tautological definition some hyper-rationalists use) and that on a systematic basis.
You can find good emperical studies (not ad hoc assertions) through NBER.
It occurs to me that it would be good to note that markets may indeed be irrational is not an indictment of markets. Rather, simply an emperical observation that markets are subject to the same structural irrationalities (and rationalities if I can coin a word) that other human structures are subject to.
I also don’t understand what this point is about how this effects Bush’s moral mandate, or legitimacy in his attempts to clean up corporate America.
Assuming for this post only, that Bush either engaged in, or is guilty of just about every kind of shenanigan possible in this area, wouldn’t that actually be a positive?
Set a thief to catch a thief, and all that. Since when did hypocrisy in our leadership ever surprise us?
Scylla, its not fair to confuse a country boy just 'cause its so easy.
Just a little ways back, you posted to the effect that if what one of my cites said is true, then the SEC conducted a pretty shabby investigation. I then offered you the site with the .pdf versions of the document (pursuant to you kindly offer to assist me in “refining my scenario”). So then we recess while you have time to peruse the documents in question.
Don’t you think it slightly odd that, with all the documentation available on the “60mph in a 55” level “irregularities” that so much of interest has no documentation?
For instance, when Harken was forced to cough up the Aloha oil hairball, it was the result of “conversations”. Just a friendly chat. As I recall, we had reached concensus that the Aloha deal wasn’t kosher.
(Note to Jewish friends: is there something beyond treyf, as in super ultra un-kosher? A ham and cheese sandwich with a nice glass milk?).
And yet this stink-o deal is handled in “conversations”. A scurrilous, left-wingo might get the unfortunate impression pains were being taken to avoid leaving a paper trail. Seems to me that activity that falls somewhere between “creative accounting” and “fraud” merits some documentation, wouldn’t you think?
So, take your time, look it over. Maybe we’ll get lucky, and someone with your approximate expertise will also read them, and then I will have simply oodles of help in “refining my scenarios”.
Not at all, Brother Billy and clan had a rather thick patina of slime on him, yet he was nontheless a rather effective President.
I personally believe that the last truly honest, straightforward and good person we had as a President was Carter, and let’s face it, he really sucked as Prez’.
I think to be a good President, you have to be half Boyscout, and half ruthless hun.
In one guise you are above suspicion, in the other it is a foregone conclusion. In neither is it an issue.
It’s the mark of true genius to be able to embody two contradictory worldviews.
Or is that the mark of insanity? I forget.
Please answer my questions directly while I look through your cites.
I’m just guessing that few people would be entirely comfortable having their daughters intern under Citizen Clinton, or having him testify as a character witness on their behalf.
IOW, I’m not sure your “to catch a thief” scenario is any more appropriate than the “foxes guarding the henhouse” anxiety being expressed by Krugman et al.