Comments on: But the Super-Duper Powered New SEC Would Get it Right THIS Time http://theunbrokenwindow.com/2010/04/19/but-the-super-duper-powered-new-sec-would-get-it-right-this-time/ The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. - F.A. Hayek Thu, 24 May 2012 11:48:48 +0000 hourly 1 http://wordpress.org/?v=3.0.3 By: Harry http://theunbrokenwindow.com/2010/04/19/but-the-super-duper-powered-new-sec-would-get-it-right-this-time/comment-page-1/#comment-14231 Harry Tue, 20 Apr 2010 03:57:31 +0000 http://theunbrokenwindow.com/?p=2876#comment-14231 Many of us had to bother with getting registered and tested to get into the securities business. Mine was for the NASD, down at Girard, near Penn. Studying for it was useful a bit. You had to be able to define leverage, financially. If you passed the test, as long as you were not a felon, financially speaking, you could trade securities with anyone. I had to learn the assorted Securities Acts, including The Investment Advisors Act of 1934, or whatever the year was. Since then, and during my training, I have always wondered how all this stuff was worth anything, except I always knew I should not trade for my own account before others. Never did that, never will. Few of us, certainly not I, could possibly have ever profited from "front-running." It as always bothered me that great armies of lawyers have mustered and profited from the sins of their bedfellows, all of who use other people's money. Shouldn't informed people question a broker who tells them they should trade every week, even the broker discloses his firm may from time to time have a position in the stuff in the broker's basket of wares? I do think there has been deep corruption in all of this, and not merely by the rating agencies, but chiefly by the winks and nods by Congress and the favoring of politically-connected creditors. None of this revolting situation will be corrected by another layer of foxes watching over the henhouse. But then this is all like the Department of Agriculture, right? Many of us had to bother with getting registered and tested to get into the securities business. Mine was for the NASD, down at Girard, near Penn. Studying for it was useful a bit. You had to be able to define leverage, financially. If you passed the test, as long as you were not a felon, financially speaking, you could trade securities with anyone. I had to learn the assorted Securities Acts, including The Investment Advisors Act of 1934, or whatever the year was.

Since then, and during my training, I have always wondered how all this stuff was worth anything, except I always knew I should not trade for my own account before others. Never did that, never will.

Few of us, certainly not I, could possibly have ever profited from “front-running.” It as always bothered me that great armies of lawyers have mustered and profited from the sins of their bedfellows, all of who use other people’s money. Shouldn’t informed people question a broker who tells them they should trade every week, even the broker discloses his firm may from time to time have a position in the stuff in the broker’s basket of wares?

I do think there has been deep corruption in all of this, and not merely by the rating agencies, but chiefly by the winks and nods by Congress and the favoring of politically-connected creditors. None of this revolting situation will be corrected by another layer of foxes watching over the henhouse.

But then this is all like the Department of Agriculture, right?

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