Jewish World Review August 14, 2002 / 6 Elul, 5762
http://www.NewsAndOpinion.com | I walked into town the other day and said to Doug Young, "The market went up 235 points."
He said, "Who got arrested?" "Sam Waksal of ImClone has just been indicted for conspiracy, securities fraud, obstruction of justice, and forgery."
He said, "That explains it. The only reason the market goes up is because one of the big swindlers has been taken away in handcuffs."
I said, "Then it follows that when President Bush tries to calm the people by telling us the economy has never been better, the market takes a nosedive."
"They don't trust the president on the economy because it's an election year."
"But the rest of the stockholders can't trust the CEOs who took all the money."
"The American people are da-n mad and want the scoundrels to go to jail. The bad apples who are out on ten million dollars' bail won't give back employees' pension money, so the only thing left is that they be tarred and feathered."
I said, "But when it comes to revenge, we have a long way to go. The executives at Enron still have to be dragged into court kicking and screaming. They were the first ones to engage in faulty bookkeeping."
He said, "When investors see the officers of Enron in handcuffs, it will be one of the stock market's greatest days."
I agreed. "And if Arthur Andersen officials are also thrown in the pokey for cooking the books, we can keep the stock rally going."
"Is this a good time to buy or to sell?"
"It depends on how much real time they get. The ex-Tyco chief is now on his yacht on Nantucket and flies from one of his homes to another. He is still living a very good life. People would buy if they were sure he'd do time in the brig."
"I have faith in the market when I see a person shoved into an FBI car. Two big shots at WorldCom were picked up the other day. What made the Dow Jones go up is that the government made sure the press had a photo op before the former executives were whisked away with their ties off like common criminals. It was a shot in the arm for brokers."
"Now can we talk about Martha Stewart? If the congressional hearings discover she was an inside trader, will it drive investors away from the market?"
"No, it will confirm the average person's perception that something is rotten on Wall Street. Those who have lost a bundle in the stock market would like to blame somebody and Martha Stewart is perfect for the role."
"Does the bull market have anything to do with the Martha Stewart investigation?"
"You have to give her some credit for it. So far her stock has dropped 60 percent in value. Brokers are using Martha Stewart as an example of why other stocks are so cheap."
I asked, "Should I buy or sell?"
Doug said, "If she gets indicted for insider trading, sell, but don't do it through Merrill Lynch. They're in hot water of their own."
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