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The economic view

On steroids

Incidence this year will be way down. The media is making much of the issue because it may be their last chance. If incidence is low, the "quiet approach" agreed to in the CBA might work. Perhaps that's why Gene Orza continues to make loud noises advertising Union recalcitrance. If he were working for me though, I'd send him to PR school. And I'd tell him that most of us want our Union to be constructive on the issue, and to get on board or get off the train.

On the Stewart case

Landon Thomas Jr. has an unusual but informative piece in the New York Times, in which he attributes Bacanovic's silence on the Stewart charges as "the ultimate act of customer loyalty."

"You want to do the right thing for the client, but not break the law," said Robert J. Ostrowski, a former broker at Prudential Securities. "I remember our chief executive always saying, 'the customer's interest always comes first.' But I think that if Bacanovic had to do it again, he would let that stock go down the drain."

For Mr. Bacanovic, the call symbolized the special service he provided to his wealthy clients, who were often his friends.

Thomas doesn't come out and say it, but his article implies that Bacanovic's business was built on the principle of providing access to insiders. He had no alternative but to stonewall against the charges. Turning snitch would have ruined him.

On Stewart herself, the story is an odd sequence of mistakes. Her firm was built around her public image, and even now this image remains enormously valueable (the firm's market cap is over $500 million). Risking the foundation of her firm for a few grand in stock profits was obviously silly in retrospect. She'd have been many millions ahead if she'd taken the advice of John -index fund - Bogle rather than Peter - insider access - Bacanovic.

Mistake number two may have been her dogged defense. Would an apology and a plea bargain have allowed her to recover the value of her firm? I think so. America loves a comeback story, and rewards remorse.