A Dream: The terrorists versus Warren Buffett
Posted Apr 10, 2004
It's not as if I think about Warren Buffett much during my waking hours. I mean, so he's one of the wealthiest billionaires in America, a six-sigma money-manager who outperforms the expectations of market performance by six standard deviations. But there can't be many people who live more boring lives. He's called the Oracle of Omaha for his almost prescient ability to pick stocks of companies that will do well over the next generation (he rarely sells; he doesn't need to, as he makes few mistakes). His most quotable quote had to do with thinking it would fine and dandy if the country's markets all closed for the next ten years.
But somehow he became vitally important to world when I was dreaming a few nights ago. In my dream, terrorists were planning to blow up much of the world, and Warren Buffett was the only man in the world who could foil their plot (How? The dream didn't go into that, but it might have had something to do with the prescient bit).
In retaliation, the terrorists were plotting to kill Warren Buffett, and I was somehow responsible for warning Buffett before it was too late.
A brainy blonde martyr b*tch with Alzheimer's
Posted Mar 23, 2004
I'm talking about Martha Stewart, of course. (When do I ever *not* talk about her? You may well ask......)
Any way, I have finally figured out the explanation for her inability to remember key details during the government's investigations: Martha is losing her memory. It's too early to know if she's getting Alzheimer's. Morvillo did a masterful job of describing her dilemma in his closing statements, but no one believed him. Someday, the whole truth will come out, when it will all be too late to save her from prison. On the plus side, she won't remember the trial or prison anyway, nor much of anything else.
The courage of her convictions
Posted Mar 14, 2004
The Courage of Her Convictions
Alas, Martha Stewart is living in the worst of all possible worlds because
she put her faith in an unreliable man. Bluntly, without Sam Waksal there would
be no prison sentence in her future.
On the last page of Martha's Christmas book, there is a picture of two lovers
kissing on a sofa. The caption identifies the lovers as Alexis Stewart (Martha's
daughter) and Sam Waksal. The picture was taken more than ten years ago, and a lot
of bridge has gone over the water since then. In that time, Alexis broke up with
Sam and ultimately married a nice young attorney (who participated in Martha's
recent trial as a defense lawyer). Martha divorced Andy Stewart. Without a man
in her life, Martha began to be seen in public with Sam Waksal.
Listen closely to this next bit: Sam had a company, ImClone, which was hoping to
market a new cancer drug. Out of loyalty to Sam, Martha bought some shares in
his company. You could say that this was a sentimental purchase, not a hard-nosed
gamble on making or losing a big chunk of money. Who wouldn't want to help
find a cure for cancer, even if you lost some money in the process?
Scroll forward to 2000/2001. Martha changed brokers, moving her account to
Merrill Lynch. Her new broker, Peter Bacanovic, had worked at ImClone himself
at some point. Maybe this fact helped sell Martha on the idea of moving to Merrill
Lynch, or maybe it didn't. In any event, it probably helped more than it hurt.
During Martha's trial, a recording of Bacanovic's testimony was played for the jurors.
Bacanovic discussed his reasons why he had told Martha that ImClone was not a good stock to keep. Indeed, the records show that Martha Stewart reluctantly sold most of her shares, but kept a few with the idea that they could be sold later to generate a tax loss which could be used to offset other income.( Tax-loss selling is not a complex concept; I have used it myself at times, and I'm no high-roller.)
In late December 2001, Sam Waksal received word from the FDA (Food and Drug
Administration) that his cancer drug was not going to be approved. This news would
have a big negative impact on ImClone, as the company didn't have a lot of products
and was heavily dependent on the prospect that the anti-cancer drug was about to be
It was at this point that Sam Waksal went crazy. He called Merrill Lynch and told
whoever was taking orders to sell all his ImClone stock. This was, of course, illegal according to the insider-trading laws of the U.S. Sam even got his daughter to sell her shares, and tried to persuade her to lie about it. There is no evidence that Sam contacted
Martha about the matter. Unfortunately, what actually did happen was almost as bad.
If you've followed Martha's trial, you know that Bacanovic was on vacation when Sam
called. Doug Faneuil, an intern/trainee/whatever, was holding the fort. Calls were placed to Bacanovic, who left a message on Martha's answering machine. Faneuil placed a call to Martha's cellphone (she was on an airplane bound for Mexico), and told her that
(1.) Peter Bacanovic recommended selling ImClone, and (2.) Sam Waksal had just sold
all his shares of the stock.
According to Doug Faneuil's testimony, Martha asked what price ImClone was trading for. When told that it was at or below $60.00 a share, Martha made a quick decision to sell. This should have been all that there was to that case. People make quick decisions about buying or selling stocks every day, and the government doesn't worry at all about their doing so. But not in this case.
Because Sam Waksal had made an egregiously (meaning excessively awfully) bad move,
and because he had alerted some of his employees to the bad news (so that they sold as well), the government was obligated to step in and investigate the large number of investors who had sold in advance of the public airing of the bad news that sent ImClone's stock price tumbling. In the process of their investigation, they discovered that Martha Stewart (who was known to be quite close to company-founder Sam Waksal)
had sold her shares at a suspiciously shrewd time. The assumption was that Sam had
urged Martha to sell her shares. Again, if you have been following the trial at all, you know that Martha would have loved to be able to ask Sam, but by that time she simply wasn't able to get through to him. Anyway, she knew nothing about this storm that was about to break. She had lots of other things on her mind anyway. She didn't really want to sell her ImClone shares, but maybe it wasn't a big deal to her anyway--until a week or so later, when she realized just what a pickle she was in because of Sam.
The Feds began sniffing around her door. Martha was indignant that they would assume she had used her contact with Sam Waksal to get illegal stock tips so she could sell before ImClone tanked. The Feds were apparently indignant that Martha didn't seem to want to cooperate with their investigation. Things escalated from there, and brought Martha Stewart to a ruinous felony conviction which will almost certainly result in prison time.
None of this should have happened. Sam Waksal *could* have kept his mouth shut and waited a few days before selling his shares. Or he could have kept his shares. In either case, he would have been doing the right thing. Once the information about the FDA's decision not approve the anti-cancer drug was made public, anybody could buy or sell as much ImClone stock as they wanted.
For her part, Martha *could* have told Doug Faneuil that she only wanted to do business with Peter Bacanovic, and that she would wait until she talked with him before taking any action.
As for Peter Bacanovic and Doug Faneuil, there is a lot of disagreement about what was said by whom. The jury apparently believed Faneuil's account, which had Faneuil simply following Bacanovic's orders. Faneuil had only been at Merrill-Lynch for six months, he wasn't allowed to do much more than take orders anyway. If he made some mistakes, it was inexperience that was to blame, not dishonesty.
So, none of this should have happened, at least the way it did happen. But it did actually happen, and now Martha Stewart has lost her case in court. Prison time will likely be anywhere from 10 months to three years, and maybe even more if the judge is feeling especially tough on crime. Martha's attempts to appeal the decision will likely impact the sentence is negative ways.
Sam Waksal, meanwhile, is serving a seven-year prison sentence. He continues to deny that he told Martha Stewart anything about the FDA decision before it was made public.
He has acknowledged his crimes, and has taken full responsibility for them. It can't make him happy to know that Martha and Peter will likely also go to prison. Although he didn't contribute directly to Martha and Peter's prison sentences, it is nevertheless true that without his attempts to illlegally sell his ImClone shares, Martha would not have had a reason for selling hers either.
I think Martha deserves some sympathy. She had no way of knowing that Sam was going to pull her down. Granted, she did some dumb things after the fact, assuring her own fall from grace. Okay, she did a *lot* of dumb things, as did her attorneys when she was on trial. Someone should have taken her aside and read the riot act to her, particularly when she was being investigated. Her original set of lawyers should have told her that saying "I don't recall" isn't going to fly if a jury can later be convinced that you really *did* recall.
Governments simply have to do thorough investigations sometimes, because this is their job. If people don't help them properly, they can't do their work, and justice doesn't get served. This is the real reason why Martha Stewart found herself convicted of obstruction of justice. She doesn't feel that she ever intended to obstruct justice, and I have to respect her feelings on this. Other people have judged differently. She will just have to acknowledge that all of this is now beyond her control, and deal with it as best she can.
Dream: The runaway truck
Posted Jan 14, 2004
(This dream has screenplay written allover it. )
Last night, I dreamed that my car had to into the shop for major repairs, so the mechanic loaned me a truck that I could drive until it was ready. It was one of those utilitarian trucks that you see landscapers use, a bit on the old side but rugged.
Anyway, I parked it on a side road near the top of a hill while I walked to the center of town to do some errands. However, a few minutes later, when I came back, the truck was gone. It had somehow rolled down the hill of its own accord. I followed it for quite a ways, till I came to a spot where it had smashed through some houses and a garage. Still no sign of the truck itself, though. Just then, I noticed the outline of a truck in the sky. My truck had finally left the ground and gone flying into the wild blue yonder.
(This dream was so lifelike that I woke up worried about having all my assets seized to pay for the damage to those houses. )
Sunday, December 35, 2003--not ready for 2004
Posted Jan 4, 2004
Why end a perfectly good year when more can still be done to make it satisfactory? That is my motto, and I'll stick with it till somebody bribes me with sufficient cash to move on with 2004 and get a life.