Quotes of the day

It turns out that Bloomberg ran a headline on its terminals at 1:48 EST. The headline read: “Janus Says It Received Inquiry Calling For General Information.” That information wasn’t publicly available to anyone who does not have a Bloomberg terminal. It wasn’t posted on Janus’s website. In fact, it took several minutes before it appeared in any place the general public has access to. So is Bloomberg aiding insider trading? Of course not. It’s a journalistic enterprise whose right to report information is protected by the First Amendment. That’s true even if the information is ‘non-public’ and has obviously been leaked by an insider. And, although it’s less clearly spelled out in the constitution, the right to gate the information so that it is only available to subscribers is probably protected as well. The question is: what’s the difference between what Bloomberg did on Janus today and what the expert networks and consultants are doing?--John Carney

Here is what [Stevie Cohen] is not: he is not Warren Buffett, arguably the best investor in history. Buffett is a fundamental investor, a man who takes deep, long-term views on the prospects of one company or another, and then tries to pick his entry point when he's got a large "margin of safety" as protection. It's not difficult to understand why Buffett's early investments in the likes of Coca-Cola (KO), Wells Fargo (WFC), and American Express (AXP) have paid off over the long haul. Cohen is also not Marc Lasry of Avenue Capital, an investor who specializes in so-called distressed investments. When you're a distressed investor, you not only have to have a well-thought opinion on the prospects of a company, you also need to know your way around the capital structure. Size and experience go a long way in the distressed realm, and the big can get bigger by virtue of that edge. When Lasry tries to take control of Donald Trump's bankrupt Atlantic City casinos, we can understand where he's coming from: the assumption that a serious human being could run Trump's casinos better than the Donald himself. Finally, Cohen is not James Simons of Renaissance Technologies, the king of the quantitative investors. While SAC Capital may use some trading algorithms in its day-to-day, Cohen's is not a black-box operation, with software designed and constantly tweaked by a squadron of PhDs like those that work for Simons. We may never learn what Simons' algorithms actually are, but we do accept that computers can outperform humans at quantitative tasks. Cohen, in short, is a trader. According to one knowledgeable investor, Cohen has called what SAC does "information arbitrage." He and his staff are simply whipping stocks around on a day-to-day basis, trying to get an information edge over the guy on the other side of the trade. If that sounds fundamentally useless, that's because it is.--Duff MacDonald

While every decent person applauds fairness and condemns unfairness, “fairness” is far too fuzzy a concept to guide public policy. To see why, imagine what the state of First Amendment law would be like were only a few words of that amendment changed to make its guiding principle fairness rather than freedom: “Congress shall make no unfair law respecting an establishment of religion, or prohibiting the fair exercise thereof; or abridging the fairness of speech, or of the press; or the right of the people fairly to assemble, and to petition the Government fairly for a redress of grievances.” Is there any doubt that replacing “free” with “fair” in this context would remove all teeth from the First Amendment? In the same way, a policy of fair trade rather than free trade would, in practice, be a policy of unfree – and, by the way, unfair – monopoly privileges for politically influential domestic producers.--Don Boudreaux

Politicians lie all the time. They are expected to lie. The British government lied in 1931, 1967, and 1992, when it said it wasn’t going to devalue, before it did devalue. That’s expected. Everyone knows that if you say you will devalue in the future, it forces an immediate devaluation. And under a gold standard if there is uncertainty about whether a devaluation will occur then gold hoarding increases, which is deflationary. This happened on four occasions during the Great Depression, and on each occasion asset prices and industrial production declined sharply.--Scott Sumner

Every damn day, if you tune in to any of the 24-hour news outlets, the same pundits retread through the same stuff--they all say the same thing. I spend a great deal of time trying to figure out how the whole DC opinion apparatus remains employed. If there were any justice, their ranks would swell the unemployment rate beyond 10 percent. And still, some moron known as a news executive who hasn't registered a thought beyond mediocre in my lifetime approves of this, and Americans, educated to believe 2+2=5, will put up with anything. Into this horror walks Sarah Palin, who is kind of a sexy librarian, kind of a MILF, kind of just crazy, and altogether does what she wants to do. This, actually, is normal behavior. But we are so used to watching other female politicians compromise in so many ways that there is not enough Vaseline in all of CVS to make the situation comfortable--so Sarah Palin seems completely strange. Unfortunately, Sarah Palin is not very bright, not very thoughtful and not very qualified to run a country. Or a state. But really, are any of the other idiots who want the job so much better?--Elizabeth Wuertzel

You can either be an unhelpful and indecisive wimp, or you can be a frickin' idiot. There are no other options. I recommend the frickin' idiot path because it's more masculine.--Scott Adams

The enormous amount of coal required to run our great ocean steamships, our leviathans of the deep, and the innumerable factories of our cities is making such inroads upon the available store that nature cannot forever supply the demand. When all the coal of the earth is used, what then?--Lord Kelvin, in 1902

One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president.--Al Gore

... Gore explains why he voted for ethanol subsidies despite believing that they are poor public policy. Note that Mr. Gore refers to his knowingly selling his principles for votes as a “mistake.” Unless he means that his effort didn’t pay off with the top job in the White House, his soul-selling was no “mistake”; he knew exactly what he was doing and why he was doing it. His soul-selling was an instance, pure and simply, of the hypocrisy and lying that is the stuff of too many political campaigns.--Don Boudreaux