The Volokh Conspiracy
[Orin Kerr, October 6, 2008 at 3:21pm] Trackbacks
Justice Breyer Sells His Stocks, and He's Not Alone:
Breyer is selling to avoid future conflicts of interests. Meanwhile, investors around the world have been selling today because they're pessimistic about the future:
The Dow Jones industrials skidded more than 800 points and fell below 10,000 for the first time in four years, while the credit markets remained under strain. Financial markets took a despairing view of the future Monday, seeing contagion in a credit crisis that threatens to cascade through economies globally despite government efforts to provide relief.

Investors around the world have come to the sobering realization that the Bush administration's $700 billion rescue plan won't work quickly to unfreeze the credit markets. Global banks, hobbled by wrong-way bets on mortgage securities, remain starved for cash as credit has dried up.
commontheme (mail):
Perhaps its time for McCain to suspend his campaign again.
10.6.2008 4:43pm
PC:
Breyer is selling to avoid future conflicts of interests.

Best. Excuse. Evar.
10.6.2008 4:53pm
M (mail):
I bet he wishes he'd avoided conflicts of interest 6 months or a year ago!
10.6.2008 4:57pm
Boyd G (www):
Two thoughts:

First, Justice Breyer is obviously a very smart man, and very knowledgeable of the law. Now we have proof that this doesn't translate into economic intelligence or expertise.

Second, this is better than not having a bailout...how?
10.6.2008 4:58pm
Oren:
He sold at the bottom of the market instead of acting counter-cyclically!
10.6.2008 4:59pm
SenatorX (mail):
Short-intermediate bottom probably. Vix hit 58 today!
10.6.2008 5:01pm
Crunchy Frog:
Oren: let's hope it's the bottom.
10.6.2008 5:01pm
Anon321:
There should be a law requiring all Supreme Court justices to sell their holdings and put the proceeds into a blind trust upon taking the bench, including an exemption from capital gains taxes (which, at a rate of one appointment every 3-4 years, would be a drop in the ocean, as far as tax revenue is concerned). I think there's already a law like this for cabinet officials. I wonder why there isn't for Supreme Court justices.

True, conflicts don't come up that often, and when they do, they're usually not that big a deal. But it seems like a pretty easy good-governance reform that woud avoid some 4-4 ties and the possibility of a case with multiple recusals. Is there a downside that I'm not seeing?
10.6.2008 5:11pm
Gregory Conen (mail):
I concur on the blind trust thing. At least making it an option for the justices.
10.6.2008 5:18pm
David Schwartz (mail):
I like the idea of the blind trust thing as an option for justices. It might make sense to guarantee at least some minimum return on some maximum amount of money, just on the off chance someone else screws up and loses their money.
10.6.2008 5:28pm
Oren:
David, let the Justices direct the managers (who are paid by the gov't, I assume) to take risks in line with their particular appetites.
10.6.2008 5:33pm
Left Hander (mail):
As folks get older, they should be moving more and more of their assets out of stocks and into fixed-income assets, such as bonds. Justice Breyer should be getting rid of stock anyway.
10.6.2008 5:35pm
Francis Marion (mail):
This is not a market bottom. The market bottom will not form for the DOW any higher than approximately 7,000 AND after the credit markets are thawed open.
10.6.2008 6:28pm
A.S.:
Poof!
10.6.2008 6:58pm
PubliusFL:
I wonder how this meshes with the idea that it was clearly a mistake for the House of Representatives not to pass the bailout bill the first time because it resulted in the Dow dropping 778 points in one day.
10.6.2008 7:09pm
Nunzio:
I don't agree with many of Justice Breyer's opinions but there's no way he or anyone else on the Court would throw a case a party's way because they owned stock in the company.

He took the conflict-of-interest thing way too seriously, especially for a guy who didn't pay his nanny's social security taxes back in the day.
10.6.2008 7:15pm
Kazinski:
At his age, he should have sold a long time ago. Stocks are a long term investment, his investment window is pretty short.
10.6.2008 7:15pm
The Oracle of Syracuse:
PubliusFL beat me to it. I tip my hat to you, sir.

Seriously, though, to echo the point: where are all of those who pointed to the 700 point dip following the House's rejection of the bailout as evidence that the bailout was needed? Let me guess: the drop would have been even worse without the bailout, right? It must be nice to be able to explain everything!
10.6.2008 8:02pm
fortyninerdweet (mail):
What I'm seeing on Wall St. is more akin to a dawning realization the election of either candidate might not help the market for an extended length of time. There is likely no "quick fix" on the horizon, and they are suitably depressed.
10.6.2008 8:14pm
karl (mail):
Stocks aren't bought and sold in a vaacum. For every seller there is a buyer and for every buyer there is a seller. And, stocks are backed by the assets of the issuing entity. That's more than can be said for the Social Security System.
10.6.2008 8:51pm
deepthought:
We should be grateful that while the total point drops are huge, the percentage drops are minor. The Dow's drop of 370 points today was only 3.58%. The 777 point drop last week, the largest point drop in Dow history, was 6.98%, only the eighth largest percentage drop in history. The worst day in market history, on a percentage basis, was Black Monday October 19, 1987, when the Dow dropped 22.61%. A drop like that today would see a Dow loss of 2,250 points; definitely a crash by any standard. Even the infamous Crash of 1929 only saw a 12.62% decline (on October 28th); or 1,256 points in today's market. October 29, 1929 saw a further decline of 11.73%.

With the regulatory structure overseeing stock markets today, I don't think we would see a record percentage decline--I think the markets would be shut down or trading heavily restricted before anything like a 2,250 decline occurred.
10.6.2008 9:19pm
TCO:
I think it's a reaction to the stagflation coming. Buttfucked Republoturds at JOM. I wish they would just die.
10.6.2008 10:48pm
Soronel Haetir (mail):
Given the way SCOTUS justices are paid I have a hard time understanding why they would hold retirement accounts at all. If their job or pension magically disappears those retirement accounts aren't going to be worth anything either. Hell, good luck on collecting the precious metals you own on paper in that situation.
10.7.2008 12:06am

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