Yes! After some nine years of waiting, Manchester United successfully made it to the UEFA Champions League final, to be held in Moscow, Russia on May 21 this year. Manchester United defeated FC Barcelona 1-0 at Old Trafford, Manchester in the second leg of the semi-final match between the two clubs after the goalless draw from their first encounter at Nou Camp, Barcelona.
Paul Scholes scored the only goal of the match from a fantastic long-range effort that the Barcelona goalkeeper could only watch in vain early in the game. Lionel Messi played really well for Barcelona but could not break Manchester United solid defense. Both teams were equally matched on the night but Manchester United held on to the solitary goal till the end of the match.
Their final opponent will be decided between Liverpool and Chelsea tomorrow night.
Wednesday, April 30, 2008
Friday, April 25, 2008
Two Great Classic Novels
Into the final two parts of Anna Karenina, a masterpiece by Leo Tolstoy instead. It took me almost one and half year now. Of course, I stopped readin' it for almost a year. In between I've have read other non-fictions as well. Meanwhile, started on Pride and Prejudice by Jane Austen, her most famous novel. That's me. Always started on new book before the old ones could finish. Sometimes, I have with me six to seven books that i read concurrently. Will watch the film "Anna Karenina" once I've finished readin' it.
This 1997 film starring Sophie Marceau as Anna Karenina.
This is the trailer of the 2005 film starring Keira Knightley as Elizabeth Bennet.
This 1997 film starring Sophie Marceau as Anna Karenina.
This is the trailer of the 2005 film starring Keira Knightley as Elizabeth Bennet.
Monday, April 21, 2008
Audrey Hepburn Performs "La Vie En Rose" in Sabrina
The ever beautiful Audrey Hepburn performs "La Vie En Rose" in this 1954 film "Sabrina" co-starring with Humphrey Bogart. "La Vie En Rose" is the popular song by French singer Edith Piaf and was made into a biographical feature film in 2007 with the same title about the life of Edith Piaf, which won Marion Cotillard, who played Piaf from 19 until her death at 47, an Academy Award for Best Actress.
Thursday, April 17, 2008
找一个很爱很爱的人
你发觉了吗？爱的感觉总是在一开始时甜蜜，
总觉得多了一个人陪，多了一个人帮你分担，
你终于不再孤单了，因为至少有一个人想着你、
恋着你，只要能在一起就是好的。
但是慢慢地，随着认识的加深，
你开始发现了对方的缺点，
于是问题一个接一个出现，
你开始烦、累，甚至想要逃避，
有人说爱情就像捡石，
总想捡到一个适合自己的，
但是你又如何知道什么时候能够捡到呢？
她适合你，那你又适合她吗？
其实，爱情应该像磨石子儿，
或许刚捡到的时候，你不是那么满意，
但是请记住，人是有弹性的，
很多事情是可以改变的，只要你有心，有勇气，
与其到处去捡未知的石头，
还不如将自己已经拥有的石头磨亮磨光，
你开始磨了吗？
很多人以为，是因为感情淡了，
人才会变得懒惰，
其实人是先被惰性征服，感惰才慢慢变淡的。
在某个聚餐的场合，有人提议多吃点虾对身体好，
这时候有个中年男人忽然说："十年前，
当我老婆还是我女朋友的时候，她说要吃十只虾，
我就剥二十只给她。
现在，如果她要我帮她剥虾壳，简直就是开玩笑，
我连帮她夹菜都没兴趣了，还剥虾壳呢。"
难怪越来越多的人只想谈一辈子恋爱，
却迟迟不肯走入婚姻。
因为，婚姻容易让人变得懒惰。
如果每个人都懒得讲话，懒得倾听，
懒得制造惊喜，懒得温柔体贴，
那么夫妻之间，又怎么会不渐行渐远渐无声呢？
所以请记住，有活力的爱情是需要适度殷勤来灌溉的，
谈恋爱，更是不可以偷懒的。
有一对情侣，相约下班后去用餐，逛街，
可是女孩因为公司会议延误了，
当她冒雨赶到时候已经迟到了30多分钟，
她男朋友很不高兴地说："你每次都这样，
现在我什么心情也没了，我以后再也不会等你了！"
刹那间，女孩的心决堤崩溃了，
她在想：或许，他们再也没有未来了。
同样，在同一个地点，另一对情侣也面临同样的处境，
女孩赶到的时候也迟到了半个钟头，
她的男朋友说："我想你一定忙坏了吧？"
接着他为女孩拭去脸上的雨水，
并且脱去外套披在女孩身上，
此刻，女孩流泪却是温馨幸福的。
你体会到了吗？其实爱恨往往只在我们的一念之间！
爱不仅要懂得宽容更要及时，
很多事可能只是在于你心境的转变罢了。
如果有个人爱上你，而你也觉得他不错，
那并不代表你会选择他。
我们总说："我要找一个很爱很爱的人，才会谈恋爱。"
但是当对方问你，怎样才算是很爱很爱的时候，
你却无法回答他，因为你自己也不知道。
没错，我们总是以为，
我们会找到一个自己很爱很爱的人。
可是后来，当我们猛然回首，才发觉自己曾经多么天真。
假如从来没有开始，
你怎么知道自己会不会很爱很爱那个人呢？
其实，很爱很爱的感觉，
是要在一起经历了许多事情之后才会发现的。
每个人都希望找到自己心目中百分之百的伴侣，
但是你有没有想过，
在你身边早有人对你默默付出很久了，
只是你没有发觉而已。
所以，还是仔细看看身边的人吧，
他或许已经等你很久了。
当你爱一个人的时候，爱到八分绝对刚刚好。
所有的期待和希望都只有七八分，
剩下两三分用来爱自己。
如果你还继续爱得更多，
很可能给对方造成沉重的压力，
让彼此喘不过气来，完全丧失了爱情的乐趣。
所以请记住，
喝酒不要超过六分醉，
吃饭不要超过七分饱，
爱一个人不要超过八分。
如果你正在为爱迷惘，
下面这段话或许可以给你一些启示：
爱一个人，
要了解也要开解；
要道歉也要道谢；
要认错也要改错；
要体贴也要体谅；
是接受而不是忍受；
是宽容而不是纵容；
是支持而不是支配；
是慰问而不是质问；
是倾诉而不是控诉；
是难忘而不是遗忘；
是彼此交流而不是凡事交代；
是为对方默默祈求而不向对方诸多要求。
可以浪漫，但不要浪费，
不要随便牵手，更不要随便放手!
总觉得多了一个人陪，多了一个人帮你分担，
你终于不再孤单了，因为至少有一个人想着你、
恋着你，只要能在一起就是好的。
但是慢慢地，随着认识的加深，
你开始发现了对方的缺点，
于是问题一个接一个出现，
你开始烦、累，甚至想要逃避，
有人说爱情就像捡石，
总想捡到一个适合自己的，
但是你又如何知道什么时候能够捡到呢？
她适合你，那你又适合她吗？
其实，爱情应该像磨石子儿，
或许刚捡到的时候，你不是那么满意，
但是请记住，人是有弹性的，
很多事情是可以改变的，只要你有心，有勇气，
与其到处去捡未知的石头，
还不如将自己已经拥有的石头磨亮磨光，
你开始磨了吗？
很多人以为，是因为感情淡了，
人才会变得懒惰，
其实人是先被惰性征服，感惰才慢慢变淡的。
在某个聚餐的场合，有人提议多吃点虾对身体好，
这时候有个中年男人忽然说："十年前，
当我老婆还是我女朋友的时候，她说要吃十只虾，
我就剥二十只给她。
现在，如果她要我帮她剥虾壳，简直就是开玩笑，
我连帮她夹菜都没兴趣了，还剥虾壳呢。"
难怪越来越多的人只想谈一辈子恋爱，
却迟迟不肯走入婚姻。
因为，婚姻容易让人变得懒惰。
如果每个人都懒得讲话，懒得倾听，
懒得制造惊喜，懒得温柔体贴，
那么夫妻之间，又怎么会不渐行渐远渐无声呢？
所以请记住，有活力的爱情是需要适度殷勤来灌溉的，
谈恋爱，更是不可以偷懒的。
有一对情侣，相约下班后去用餐，逛街，
可是女孩因为公司会议延误了，
当她冒雨赶到时候已经迟到了30多分钟，
她男朋友很不高兴地说："你每次都这样，
现在我什么心情也没了，我以后再也不会等你了！"
刹那间，女孩的心决堤崩溃了，
她在想：或许，他们再也没有未来了。
同样，在同一个地点，另一对情侣也面临同样的处境，
女孩赶到的时候也迟到了半个钟头，
她的男朋友说："我想你一定忙坏了吧？"
接着他为女孩拭去脸上的雨水，
并且脱去外套披在女孩身上，
此刻，女孩流泪却是温馨幸福的。
你体会到了吗？其实爱恨往往只在我们的一念之间！
爱不仅要懂得宽容更要及时，
很多事可能只是在于你心境的转变罢了。
如果有个人爱上你，而你也觉得他不错，
那并不代表你会选择他。
我们总说："我要找一个很爱很爱的人，才会谈恋爱。"
但是当对方问你，怎样才算是很爱很爱的时候，
你却无法回答他，因为你自己也不知道。
没错，我们总是以为，
我们会找到一个自己很爱很爱的人。
可是后来，当我们猛然回首，才发觉自己曾经多么天真。
假如从来没有开始，
你怎么知道自己会不会很爱很爱那个人呢？
其实，很爱很爱的感觉，
是要在一起经历了许多事情之后才会发现的。
每个人都希望找到自己心目中百分之百的伴侣，
但是你有没有想过，
在你身边早有人对你默默付出很久了，
只是你没有发觉而已。
所以，还是仔细看看身边的人吧，
他或许已经等你很久了。
当你爱一个人的时候，爱到八分绝对刚刚好。
所有的期待和希望都只有七八分，
剩下两三分用来爱自己。
如果你还继续爱得更多，
很可能给对方造成沉重的压力，
让彼此喘不过气来，完全丧失了爱情的乐趣。
所以请记住，
喝酒不要超过六分醉，
吃饭不要超过七分饱，
爱一个人不要超过八分。
如果你正在为爱迷惘，
下面这段话或许可以给你一些启示：
爱一个人，
要了解也要开解；
要道歉也要道谢；
要认错也要改错；
要体贴也要体谅；
是接受而不是忍受；
是宽容而不是纵容；
是支持而不是支配；
是慰问而不是质问；
是倾诉而不是控诉；
是难忘而不是遗忘；
是彼此交流而不是凡事交代；
是为对方默默祈求而不向对方诸多要求。
可以浪漫，但不要浪费，
不要随便牵手，更不要随便放手!
Saturday, April 12, 2008
The Return of Gordon Gekko
The sequel to the 1987 film "Wall Street" is on its way, tentatively called "Money Never Sleeps". Personally, I think it should be renamed "The Return of Gordon Gekko" instead -- to capture the popularity of the character played by Michael Douglas.
But what I would like to do is make the following case; very few of the actions which Bud Fox (played by Charlie Sheen) and Gordon Gekko carried out and traded on were actually illegal under securities law at the time. In fact, any sequel to this film should have started with the premise that Gordon Gekko was acquitted on all charges of securities fraud.
Securities law has been materially tightened since the 1980s. I'm judging Gekko against the general principles which operated during that period rather than specific post-Boesky rules. And, Gekko was presumably charged with both securities fraud and tax fraud in the film; since Oliver Stone doesn't show us any material details of his tax arrangements, I can't comment on whether he was guilty on these counts.
All in, the charges against Gordon Gekko would be grouped into six general areas.
1. Trading in BlueStar Airlines (first operation). This is the firm where Bud Fox's father (Carl) works. Carl has become aware, as the union representative, that the FAA is about to rule in BlueStar's favour in a safety case, which will open up a few big routes to them. Bud Fox passes on the information to Gekko, who orders twenty thousand shares.
Potential charge: Insider dealing. Gekko is trading on the information provided via Bud Fox's dad. This is material and non-public information, and it would probably be illegal to trade based on it today. However, under the standards prevailing in 1987, "inside information" has to be "information coming from an insider", and an "insider" used to be defined quite narrowly; it would not have been at all clear that Carl Fox was an insider for securities law purposes. In any case, Bud Fox is certainly not a BlueStar insider; although Gekko actually finds out that his dad is a union rep, he would not therefore have been assumed to have known he was dealing on inside information. Given that at least two people (the comptroller and Carl Fox) have already blabbed about this decision, he would be within his rights to assume that, despite Bud Fox telling him it was incredibly secret, it was actually common knowledge in aviation circles. This charge would never stick.
2. Trading in Anacott Steel. Gekko tells Bud Fox to come up with some more hot tips. He suggests that looking into the activities of Sir Larry Wildman would be a good source. Bud follows Wildman about for a day, then finds out that he has boarded a plane bound for Erie, Pennsylvania (the headquarters of Anacott). Bud passes the information to Gekko, who sees a chance to greenmail his old rival. He instructs Bud to buy substantial block of the stock, then to call the Wall Street Chronicle with the codephrase "Blue Horseshoe loves Anacott Steel".
Potential charges: Insider dealing, market manipulation. Frankly, I don’t see how the insider dealing charge could ever have got off the ground on this one. It is not illegal to follow somebody into an elevator, and it is not illegal to ask their chauffeur where they are flying to. And that is all that Bud does with respect to Larry Wildman. They work out that his target is Anacott by an act of deduction from his aircraft's destination, which is public knowledge (in the sense that anyone who was in the right place at the right time could have got it; if you see a train crash, you do not have to wait until it appears on the evening news before selling the stock of the railway company). Insider information has to be specific information, and the fact that a man has flown to a town is not specific. This is the deal at which the film marks the beginning of the corruption of Bud Fox, and it is, as far as I can tell, completely honest.
The market manipulation charge is a bit more dubious. I must say that I don't like the way in which Gekko handles his relationship with the media, and I suspect that he would be caught today under the rules brought in to deal with "pump and dump" stock manipulations. But rules were significantly more lax in the 1980s, and people did indeed feed tips to the WSJ's "Heard on the Street" column about the dealings of big investors. And note that there is no false information here; Blue Horseshoe is the name of Gekko's trading company, and at the time Bud calls in the tip, it was substantially long the shares of Anacott Steel. It's a gray area, but I suspect that it would have been dealt with via an SEC disciplinary arrangement rather than a criminal charge. The actual greenmail which annoys Larry Wildman so much is not a criminal offence and never has been. It's just not against the law to buy something that you think other people will pay you a lot of money for.
3. Trading in Fairchild Foods and Roarker Electronics. It's not clear quite what goes on here, but it seems to me that Bud bribes the owner of a cleaning service to get a job which allows him to wander round the offices of his college friend Roger's law firm at night. He basically xeroxes documents relating to forthcoming mergers and acquisitions and uses the information to trade on behalf of Gekko.
Potential charges: Conspiracy to theft, insider dealing. Bud Fox has clearly gone way over his head here and is guilty of burglary and securities fraud. But how much of it can be pinned on Gekko? Not much, I'd say. Gekko calls Bud from his beach-house and says "You done good, but you gotta keep doing good. I showed you how the game works, now school’s out […] You don't understand. I want to be surprised …astonish me, sport, new info, don't care where or how you get it, just get it […] This is your wake-up call. Go to work". In the context of the film, it's clear what he means, but I think you would have a very hard time indeed in court proving that Gekko meant "Commit numerous counts of felony burglary" when he said "don't care where or how you get it, just get it".
Gekko clearly appears to be structuring his affairs in order to reduce the appearance of a paper trail linking him to Bud Fox; he asks Fox to trade through a number of nominee accounts, and to act with limited power of attorney over the money he manages. But in the absence of any non-circumstantial evidence, there are a million and one reasons why he might do this. Indeed, Gekko might say that he specifically arranged his affairs this way in order to bring home to Fox that he alone would bear the consequences of any illegality, in order to ensure that he didn't break the law. The point at work here is that Bud Fox is never an employee of Gordon Gekko (he keeps his job at the brokerage throughout the film), and so Gekko has next to no duty of supervision.
4. Conduct surrounding the tender offer for Teldar Paper. This is the centerpiece of the film, where Gekko makes the "Greed is Good" speech. Teldar is a paper company that Gekko regards as poorly managed, and he wants to take it over to break it up.
Potential charges: None? Corporate raiding is not illegal, and Gekko is perfectly within his rights to buy a lot of stock in a company if he thinks he can run it better than the incumbent management. Gekko was buying stock in Teldar before he ever met Bud Fox, and by the time of the meeting, he is the largest single stockholder. Teldar paper is "leveraged up to the hilt like some piss-poor Latin American country", but this can't possibly be Gekko's fault; he isn't in charge of it at the time of the shareholders' meeting. Oliver Stone clearly put this scene in the film in order to point out that most of what Gekko does which he considers harmful, he does within the bounds of the law (this is also true of Ivan Boesky, the financier upon whom Gekko appears to be loosely based. Boesky was sent to jail on relatively minor insider dealing charges, but his real fortune and reputation was based on perfectly legal, if sometimes spectacularly ill-advised, junk bond issues).
5. Trading in BlueStar Airlines (second operation). Gekko decides to take over BlueStar in order to carry out a similar breakup. He uses Bud as his intermediary, in order to ensure that he will have co-operation from the unions for doing so. In the course of the negotiations, he makes a number of promises; he claims that he wants to turn the company around with Bud as President (why the company is in need of a turnaround is not clear; I thought that the FAA decision was meant to mean that it was all systems go for BlueStar). Bud later learns that Gekko has no intention of keeping these promises; he simply intends to raid the pension fund and then break up the company. As Gekko buys stock, Bud and the unions announce that they no longer stand by the informal commitments they have given, and the price plummets. This allows Larry Wildman to step in and take the company away from Gekko.
Potential charges: Insider trading, market manipulation, breach of takeover regulations. Again, Bud Fox is the villain here, and he has been scandalously unprofessional in his treatment of Gordon Gekko as a client. It is not against the law to carry out due diligence on an acquisition you are thinking of making, and that includes talking to union representatives. The only price-sensitive information Gekko has is his own intention to make a bid, and that is privileged information; it can't be inside information by definition. What is highly illegal is for someone like Bud Fox to take that information to a third party (like Wildman), and having received it from what he explicitly knows to be a privileged source, for Wildman to act on it. I have no idea why Wildman is not indicted toward the end of the film; he has clearly been responsible for creating a false market in this stock in order to get it at a lower price (particularly, Bud encourages Gekko to part with a block at $17 when he knows that Wildman intends to tender $18; this is about as blatant as fraud gets).
I note that it is usually not illegal for the acquirer of a company with an overfunded pension fund to buy "minimum annuities" for the fund members and pocket the surplus, although this issue is academic as Gekko never gained control of BlueStar. Of course, these days, the likelihood of finding a US regional airline which still had an overfunded defined benefit pension plan to plunder would be pretty low.
6. Trading in Fulham Oil, Brent Resources and Geo Dynamics. These are the companies that Gekko mentions to Bud shortly before punching him on the nose. They aren't mentioned anywhere else in the film. But given the context, I have no reason to believe that anyone could make a charge stick on these companies either.
So that's basically the plot of the film. Gordon Gekko, an aggressive but perfectly legal financier, makes a mistake in hiring a thoroughly dishonest stockbroker to act for him, is made the victim of a scandalous securities fraud and then, for unknown reasons, is indicted along with the person who defrauded him, while the main conspirator in that fraud walks free. It's a travesty of justice.
Keep in mind that I did not condone what Gordon Gekko has done in the film. The points I just mentioned are just to clear a way for Gordon Gekko to start afresh in the new sequel.
But what I would like to do is make the following case; very few of the actions which Bud Fox (played by Charlie Sheen) and Gordon Gekko carried out and traded on were actually illegal under securities law at the time. In fact, any sequel to this film should have started with the premise that Gordon Gekko was acquitted on all charges of securities fraud.
Securities law has been materially tightened since the 1980s. I'm judging Gekko against the general principles which operated during that period rather than specific post-Boesky rules. And, Gekko was presumably charged with both securities fraud and tax fraud in the film; since Oliver Stone doesn't show us any material details of his tax arrangements, I can't comment on whether he was guilty on these counts.
All in, the charges against Gordon Gekko would be grouped into six general areas.
1. Trading in BlueStar Airlines (first operation). This is the firm where Bud Fox's father (Carl) works. Carl has become aware, as the union representative, that the FAA is about to rule in BlueStar's favour in a safety case, which will open up a few big routes to them. Bud Fox passes on the information to Gekko, who orders twenty thousand shares.
Potential charge: Insider dealing. Gekko is trading on the information provided via Bud Fox's dad. This is material and non-public information, and it would probably be illegal to trade based on it today. However, under the standards prevailing in 1987, "inside information" has to be "information coming from an insider", and an "insider" used to be defined quite narrowly; it would not have been at all clear that Carl Fox was an insider for securities law purposes. In any case, Bud Fox is certainly not a BlueStar insider; although Gekko actually finds out that his dad is a union rep, he would not therefore have been assumed to have known he was dealing on inside information. Given that at least two people (the comptroller and Carl Fox) have already blabbed about this decision, he would be within his rights to assume that, despite Bud Fox telling him it was incredibly secret, it was actually common knowledge in aviation circles. This charge would never stick.
2. Trading in Anacott Steel. Gekko tells Bud Fox to come up with some more hot tips. He suggests that looking into the activities of Sir Larry Wildman would be a good source. Bud follows Wildman about for a day, then finds out that he has boarded a plane bound for Erie, Pennsylvania (the headquarters of Anacott). Bud passes the information to Gekko, who sees a chance to greenmail his old rival. He instructs Bud to buy substantial block of the stock, then to call the Wall Street Chronicle with the codephrase "Blue Horseshoe loves Anacott Steel".
Potential charges: Insider dealing, market manipulation. Frankly, I don’t see how the insider dealing charge could ever have got off the ground on this one. It is not illegal to follow somebody into an elevator, and it is not illegal to ask their chauffeur where they are flying to. And that is all that Bud does with respect to Larry Wildman. They work out that his target is Anacott by an act of deduction from his aircraft's destination, which is public knowledge (in the sense that anyone who was in the right place at the right time could have got it; if you see a train crash, you do not have to wait until it appears on the evening news before selling the stock of the railway company). Insider information has to be specific information, and the fact that a man has flown to a town is not specific. This is the deal at which the film marks the beginning of the corruption of Bud Fox, and it is, as far as I can tell, completely honest.
The market manipulation charge is a bit more dubious. I must say that I don't like the way in which Gekko handles his relationship with the media, and I suspect that he would be caught today under the rules brought in to deal with "pump and dump" stock manipulations. But rules were significantly more lax in the 1980s, and people did indeed feed tips to the WSJ's "Heard on the Street" column about the dealings of big investors. And note that there is no false information here; Blue Horseshoe is the name of Gekko's trading company, and at the time Bud calls in the tip, it was substantially long the shares of Anacott Steel. It's a gray area, but I suspect that it would have been dealt with via an SEC disciplinary arrangement rather than a criminal charge. The actual greenmail which annoys Larry Wildman so much is not a criminal offence and never has been. It's just not against the law to buy something that you think other people will pay you a lot of money for.
3. Trading in Fairchild Foods and Roarker Electronics. It's not clear quite what goes on here, but it seems to me that Bud bribes the owner of a cleaning service to get a job which allows him to wander round the offices of his college friend Roger's law firm at night. He basically xeroxes documents relating to forthcoming mergers and acquisitions and uses the information to trade on behalf of Gekko.
Potential charges: Conspiracy to theft, insider dealing. Bud Fox has clearly gone way over his head here and is guilty of burglary and securities fraud. But how much of it can be pinned on Gekko? Not much, I'd say. Gekko calls Bud from his beach-house and says "You done good, but you gotta keep doing good. I showed you how the game works, now school’s out […] You don't understand. I want to be surprised …astonish me, sport, new info, don't care where or how you get it, just get it […] This is your wake-up call. Go to work". In the context of the film, it's clear what he means, but I think you would have a very hard time indeed in court proving that Gekko meant "Commit numerous counts of felony burglary" when he said "don't care where or how you get it, just get it".
Gekko clearly appears to be structuring his affairs in order to reduce the appearance of a paper trail linking him to Bud Fox; he asks Fox to trade through a number of nominee accounts, and to act with limited power of attorney over the money he manages. But in the absence of any non-circumstantial evidence, there are a million and one reasons why he might do this. Indeed, Gekko might say that he specifically arranged his affairs this way in order to bring home to Fox that he alone would bear the consequences of any illegality, in order to ensure that he didn't break the law. The point at work here is that Bud Fox is never an employee of Gordon Gekko (he keeps his job at the brokerage throughout the film), and so Gekko has next to no duty of supervision.
4. Conduct surrounding the tender offer for Teldar Paper. This is the centerpiece of the film, where Gekko makes the "Greed is Good" speech. Teldar is a paper company that Gekko regards as poorly managed, and he wants to take it over to break it up.
Potential charges: None? Corporate raiding is not illegal, and Gekko is perfectly within his rights to buy a lot of stock in a company if he thinks he can run it better than the incumbent management. Gekko was buying stock in Teldar before he ever met Bud Fox, and by the time of the meeting, he is the largest single stockholder. Teldar paper is "leveraged up to the hilt like some piss-poor Latin American country", but this can't possibly be Gekko's fault; he isn't in charge of it at the time of the shareholders' meeting. Oliver Stone clearly put this scene in the film in order to point out that most of what Gekko does which he considers harmful, he does within the bounds of the law (this is also true of Ivan Boesky, the financier upon whom Gekko appears to be loosely based. Boesky was sent to jail on relatively minor insider dealing charges, but his real fortune and reputation was based on perfectly legal, if sometimes spectacularly ill-advised, junk bond issues).
5. Trading in BlueStar Airlines (second operation). Gekko decides to take over BlueStar in order to carry out a similar breakup. He uses Bud as his intermediary, in order to ensure that he will have co-operation from the unions for doing so. In the course of the negotiations, he makes a number of promises; he claims that he wants to turn the company around with Bud as President (why the company is in need of a turnaround is not clear; I thought that the FAA decision was meant to mean that it was all systems go for BlueStar). Bud later learns that Gekko has no intention of keeping these promises; he simply intends to raid the pension fund and then break up the company. As Gekko buys stock, Bud and the unions announce that they no longer stand by the informal commitments they have given, and the price plummets. This allows Larry Wildman to step in and take the company away from Gekko.
Potential charges: Insider trading, market manipulation, breach of takeover regulations. Again, Bud Fox is the villain here, and he has been scandalously unprofessional in his treatment of Gordon Gekko as a client. It is not against the law to carry out due diligence on an acquisition you are thinking of making, and that includes talking to union representatives. The only price-sensitive information Gekko has is his own intention to make a bid, and that is privileged information; it can't be inside information by definition. What is highly illegal is for someone like Bud Fox to take that information to a third party (like Wildman), and having received it from what he explicitly knows to be a privileged source, for Wildman to act on it. I have no idea why Wildman is not indicted toward the end of the film; he has clearly been responsible for creating a false market in this stock in order to get it at a lower price (particularly, Bud encourages Gekko to part with a block at $17 when he knows that Wildman intends to tender $18; this is about as blatant as fraud gets).
I note that it is usually not illegal for the acquirer of a company with an overfunded pension fund to buy "minimum annuities" for the fund members and pocket the surplus, although this issue is academic as Gekko never gained control of BlueStar. Of course, these days, the likelihood of finding a US regional airline which still had an overfunded defined benefit pension plan to plunder would be pretty low.
6. Trading in Fulham Oil, Brent Resources and Geo Dynamics. These are the companies that Gekko mentions to Bud shortly before punching him on the nose. They aren't mentioned anywhere else in the film. But given the context, I have no reason to believe that anyone could make a charge stick on these companies either.
So that's basically the plot of the film. Gordon Gekko, an aggressive but perfectly legal financier, makes a mistake in hiring a thoroughly dishonest stockbroker to act for him, is made the victim of a scandalous securities fraud and then, for unknown reasons, is indicted along with the person who defrauded him, while the main conspirator in that fraud walks free. It's a travesty of justice.
Keep in mind that I did not condone what Gordon Gekko has done in the film. The points I just mentioned are just to clear a way for Gordon Gekko to start afresh in the new sequel.
Saturday, April 5, 2008
More Volatility Post Election
By Richard Lin
Now that the 12th General Election is finally over and a new political landscape has been shaped, it is timely to discuss the possible implications on the economy and financial markets.
Inevitably, some of these political changes will cause disruptions in the economy as selective infrastructure projects and public expenditures announced earlier but which have yet to commence, may be under scrutiny. Surely, the newly appointed chief ministers will reassess the economic viability of certain projects and the awarding of contracts. Hence, several mega projects announced in the state of Selangor and Penang could potentially be delayed. These could involve projects such as water related infrastructure contracts, monorails, bridges, roads and others.
However, on a more positive note, Malaysians could be less burdened by high tariffs if these projects are efficiently planned and executed.
Apart from construction and infrastructure companies, gaming companies will also be affected. The numbers forecast operators particularly Berjaya Sports Toto, Tanjong and Magnum will have to relocate their premises from Kedah now that PAS is on board.
Property players may be affected too, as unapproved property projects and land acquisitions, could also be reviewed.
Sectors seeking for higher tariffs such as cement, steel, water and electricity could be negatively affected while toll hikes may also be tougher to implement, especially since the opposition parties have politicised the issue in the recent elections.
It should be noted that Selangor and Penang both contribute roughly 30% of the country’s GDP and a slowdown in economic activities in these states would affect national economic growth.
As it turned out, Bursa went limit down and triggered the Circuit Breaker when the Composite Index plunged 10% on Monday following the elections. The collapse of the market was compounded by sell-offs of equities by foreign portfolio managers who perceived there could be some political uncertainties arising from the outcome of the election. If this perception becomes a fact, Malaysia may suffer the same fate as Thailand and trade at a wide discount compared with the region.
On Monday, the market was also negatively affected by plantation stocks, which were also sold down viciously due to the sharp correction of CPO and other commodity prices over the weekend. To top it all, regional sentiment was also extremely weak that day with some markets down 2 to 4% due to renewed concerns over the US.
The Malaysian market is now subject to more volatility as foreign equity bourses are expected to remain turbulent while domestic politics may also affect sentiment.
The most notable event that could affect market sentiment would be the forthcoming UMNO general assembly. The market is eagerly awaiting the appointment of Cabinet members, mentris besar and the revamp of MCA, Gerakan and MIC.
As mentioned earlier, equity investors generally do not like political uncertainties, changes in policies and disruptions in economic activities, which could lead to downgrades in earnings. If these domestic issues are not resolved, it could be an overhanging factor clouding the market.
The situation in the US is looking more precarious. The Fed is desperately trying to boost liquidity to ease the strains in credit markets and foster the functioning of the financial system. This is extremely crucial as the US could plunge into a recession if consumption is crimped by the banks’ reluctance and inability to provide credit to consumers. Consumption accounts for two third of the US economy and the US accounts for 30% of world economy. This basically implies that consumption in the US accounts for 20% of the global economy.
The Fed will continue to cut rates but this tactical move will not resolve the credit issues overhanging the financial system in the US. Moreover, latest statistics are suggesting more job losses, which will impact disposable income.
Generally, I am still cautious of the equity market. I believe investors should be patient and wait until the outlook is brighter. I don’t see any compelling reasons why investors should weight up equities now when domestic politics could plague and disrupt economic activities. It should be noted that oil prices have surged to all-time high while the US is heading for a recession. Global inflation will also spike up due to the surge in commodity prices. Why should one rush to invest in equities?
Richard Lin Kwok Wing is the Executive Director / Chief Executive Officer of HLG Asset Management Sdn Bhd.
Now that the 12th General Election is finally over and a new political landscape has been shaped, it is timely to discuss the possible implications on the economy and financial markets.
Inevitably, some of these political changes will cause disruptions in the economy as selective infrastructure projects and public expenditures announced earlier but which have yet to commence, may be under scrutiny. Surely, the newly appointed chief ministers will reassess the economic viability of certain projects and the awarding of contracts. Hence, several mega projects announced in the state of Selangor and Penang could potentially be delayed. These could involve projects such as water related infrastructure contracts, monorails, bridges, roads and others.
However, on a more positive note, Malaysians could be less burdened by high tariffs if these projects are efficiently planned and executed.
Apart from construction and infrastructure companies, gaming companies will also be affected. The numbers forecast operators particularly Berjaya Sports Toto, Tanjong and Magnum will have to relocate their premises from Kedah now that PAS is on board.
Property players may be affected too, as unapproved property projects and land acquisitions, could also be reviewed.
Sectors seeking for higher tariffs such as cement, steel, water and electricity could be negatively affected while toll hikes may also be tougher to implement, especially since the opposition parties have politicised the issue in the recent elections.
It should be noted that Selangor and Penang both contribute roughly 30% of the country’s GDP and a slowdown in economic activities in these states would affect national economic growth.
As it turned out, Bursa went limit down and triggered the Circuit Breaker when the Composite Index plunged 10% on Monday following the elections. The collapse of the market was compounded by sell-offs of equities by foreign portfolio managers who perceived there could be some political uncertainties arising from the outcome of the election. If this perception becomes a fact, Malaysia may suffer the same fate as Thailand and trade at a wide discount compared with the region.
On Monday, the market was also negatively affected by plantation stocks, which were also sold down viciously due to the sharp correction of CPO and other commodity prices over the weekend. To top it all, regional sentiment was also extremely weak that day with some markets down 2 to 4% due to renewed concerns over the US.
The Malaysian market is now subject to more volatility as foreign equity bourses are expected to remain turbulent while domestic politics may also affect sentiment.
The most notable event that could affect market sentiment would be the forthcoming UMNO general assembly. The market is eagerly awaiting the appointment of Cabinet members, mentris besar and the revamp of MCA, Gerakan and MIC.
As mentioned earlier, equity investors generally do not like political uncertainties, changes in policies and disruptions in economic activities, which could lead to downgrades in earnings. If these domestic issues are not resolved, it could be an overhanging factor clouding the market.
The situation in the US is looking more precarious. The Fed is desperately trying to boost liquidity to ease the strains in credit markets and foster the functioning of the financial system. This is extremely crucial as the US could plunge into a recession if consumption is crimped by the banks’ reluctance and inability to provide credit to consumers. Consumption accounts for two third of the US economy and the US accounts for 30% of world economy. This basically implies that consumption in the US accounts for 20% of the global economy.
The Fed will continue to cut rates but this tactical move will not resolve the credit issues overhanging the financial system in the US. Moreover, latest statistics are suggesting more job losses, which will impact disposable income.
Generally, I am still cautious of the equity market. I believe investors should be patient and wait until the outlook is brighter. I don’t see any compelling reasons why investors should weight up equities now when domestic politics could plague and disrupt economic activities. It should be noted that oil prices have surged to all-time high while the US is heading for a recession. Global inflation will also spike up due to the surge in commodity prices. Why should one rush to invest in equities?
Richard Lin Kwok Wing is the Executive Director / Chief Executive Officer of HLG Asset Management Sdn Bhd.
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