Friday, May 13, 2016

CNN covers the insider trading scandals in "The Eighties", prescient of 2008


On Thursday, May 12, 2016, CNN aired the latest episode of “The Eighties”, this time, “The Roaring Eighties” about the stock market explosion and reckless Wall Street behavior during the Reagan era.

The episode hit very hard the problems of insider trading, the overbuilding of real estate which was said to be motivated by reckless regulation of federal deposit insurance, and a “cheating culture” on Wall Street, where you had to cheat to keep your job (2004 book “The Cheating Culture” by David Callahan. Book review March 28, 2006).  The real estate overbuilding, affecting many savings and loans (especially in Texas) would foreshadow the sub-prime crisis in 2007-2008.   But in some parts of the country many homeowners faced foreclosures and upsidedown mortgages. In the mid 1990s, I had to deal with an unqualified assumption on a Dallas condo I had sold.  An interesting book about insider trading is “Trading Secrets” by R Foster Winans (1989, St Martins), author of the “Heard on the Street” column in the Wall Street Journal before he got fired himself. (His being gay never mattered.)

People even said that the insider trading scandal showed a need for mandatory national service.

Disturbing, also, is the way bond salesmen duped ordinary "weak, meek and ignorant" people out of their money in conjunction with real estate deals,
 
The film also covers some of the scandals involving televangelists from the "religious Right", like Jim Baker and Tanny Faye,
 
The documentary also documented "Black Monday", in October 1987, when the Dow fell 22% (largely from programmed trading run amok), although it recovered quickly. I was in San Francisco at the time.



The episode specifically mentions Ivan Boesky.  I remember the term “arbitrageur”.  I also recall when Borg Warner, which had bought Chilton, where I worked, was chased by Irwin Jacobs.  Hostile takeovers became the norm in the late 80s.

When will CNN do the report on the AIDS epidemic?  Will it still be politically explosive?

CNN link for Prince.

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