Wall St. is a rigged game – more evidence

[wakeflood]

For any of those who might think our financial system is fair or equitable or not rigged, I have some more evidence for you.

Now, even convictions for insider trading, which are notoriously hard to get now that they’ve been so narrowly defined, are being overturned.

But the big takeaway from this article is the following:

“…But now it’s normal practice. According to research by Professor William Lazonick of the University of Massachusetts, between 2003 and 2012 the chief executives of the ten companies that repurchased the most stock (totaling $859 billion) received 58 percent of their total pay in stock options or stock awards.

In other words, many CEOs are making vast fortunes not because they’re good at managing their corporations but because they’re good at using insider information.”

http://www.huffingtonpost.com/robert-reich/the-coin-of-the-realm-how_b_6343866.html

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[JTB]

One of the elements driving (inflating?) the stock market is the buy back of stocks by corporations who have lots of cash and sure as hell aren’t going to share it with workers in the form of higher compensation. I looked at the CNNMoney profile for a company I used to work with and noted the purchase and sale of stocks by executive shareholders is tracked on an “insider trading” chart, highlighting large transactions. Of course, most of the purchases are utilizing stock options, which provide a discount beyond market price. I was left wondering what, if anything, triggers an alarm for inappropriate insider trading when there is obviously a very high tolerance for it to start with.

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[JTB]

More market games. The Fed announced yesterday that it was extending the deadline for banks to unwind investments in hedge funds and other high risk instruments as required under Dodd Frank. They originally had four years to accomplish that task. Now they have until late 2016 after the elections. I suppose it would be a too much of a hardship if the financial sector had to turn to productive investments that create actual capital assets.

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