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lquadland10 (< 20)

Is the failure of the SEC part to blame for the Housing, sub prime, energy mess?

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July 05, 2008 – Comments (6) | RELATED TICKERS: AME , MON , POT

Is the failure of the SEC part to blame for the Housing, sub prime, energy mess?  Or is this a bigger part of the corruption of our leaders in the WHITE HOUSE and CONGRESS?  How much of this is because our ELECTIVE OFFICIALS have NOT done their Jobs? To my simple way of thinking and in my humble thought it is 1. There is a Media Cartel and the real journalist don't report the news anymore. 2. We as Americans have let this happen. 3. Due to past events we have a wide definition of what a terorist is and yet we still have very little control over our boarders and ports. 4.The very people who protect us from These invaders are put in jail (Romas and Compion). The criminal ran free for awhile selling drugs to our children. 5.  National Guard no longer helping Border Patrol secure our borders.  6. Bush Sr. and the S & L Mess and Clinton with (The North American Free Trade Agreement took effect on January 1, 1994.

NAFTA opponents - including labor, environmental, consumer and religious groups - argued that NAFTA would launch a race-to-the-bottom in wages, destroy hundreds of thousands of good U.S. jobs, undermine democratic control of domestic policy-making and threaten health, environmental and food safety standards.

NAFTA promoters - including many of the world’s largest corporations - promised it would create hundreds of thousands of new high-wage U.S. jobs, raise living standards in the U.S., Mexico and Canada, improve environmental conditions and transform Mexico from a poor developing country into a booming new market for U.S. exports.) and now Bush Jr. Housing and Energy. How to trade how to trade in a mess like this?                                                                                              7. Job loss now for the (how many months) while Bill Gates MSFT addresses congress because he and businesses need more visa's to import people to come to work in America and they get them.  8. Oh yea I also came across this story about Bush and the Sec.about  Insider trading.

Published on Wednesday, October 30, 2002 by the Boston Globe Board Was Told of Risks Before Bush Stock Sale
Harken memo went to SEC after probe
by Michael Kranish and Beth Healy   WASHINGTON - One week before George W. Bush's now-famous sale of stock in Harken Energy Corp. in 1990, Harken was warned by its lawyers that Bush and other members of the troubled oil company's board faced possible insider trading risks if they unloaded their shares.

The warning from Harken's lawyers came in a legal memorandum whose existence has been little noted until now, despite the many years of scrutiny of the Bush transaction. The memo was not received by the Securities and Exchange Commission until the day after the agency decided not to bring insider-trading charges against Bush, documents show.


It appears that Mr. Bush had insider information, that he was told that such insider information could be considered material, [and] was given express warnings about what the consequences could be.
Michael Aguirre
California securities lawyer
The memo, a copy of which was obtained by the Globe, does not say directly whether Bush would face legal problems if he sold his stock. But it does lay out the potential for insider-trading violations by Bush and other members of the Harken board, and its existence raises questions about how thoroughly the SEC investigated Bush's unloading of $848,000 of his Harken stake to a buyer whose name has not been made public.

The SEC cleared Bush after looking into whether he had insider knowledge of an upcoming quarterly loss at Harken. But the SEC investigation apparently never examined a key issue raised in the memo: whether Bush's insider knowledge of a plan to rescue the company from financial collapse by spinning off two troubled units was a factor in his decision to sell.

The plan engineered by one of the company's largest shareholders, the endowment fund of Harvard University, raised uncertainty about the value of Harken after the breakup. The question is, did Bush sell believing that the stock might soon dip?

''It would certainly have raised a question in the mind of a reasonable investigator,'' said Theresa Gabaldon, a professor at George Washington University and author of the textbook ''Securities Regulation.''

Gabaldon, who reviewed the documents at the request of the Globe, also examined company minutes related to the move to split up Harken through what is called a ''rights offering'' and concluded that they would have been worthy of further examination by securities regulators. But, she said, ''I don't think [the SEC investigators] were looking at the rights offering at all.''

The Globe contacted four former SEC officials who worked on the Bush case; none of them recalled seeing the memo in question. None would speak about the case on the record, but a July 1991 memo from the SEC investigators to their boss reveals that they were having difficulty securing documents from Bush, who was holding many items back, saying they were private correspondence between him and his lawyer.

''Bush has produced a small amount of additional documents, which provide little insight as to what Harken nonpublic information he knew and when he knew it,'' the memo said.

The SEC nevertheless cleared Bush on Aug. 21, 1991. One day later Bush's lawyer - Robert Jordan, now the US ambassador to Saudi Arabia - turned over the legal memorandum outlining concerns about insider trading. The nine-page memo, dated June 15, 1990, was titled ''Liability for Insider Trading and Short-Term Swing Profits'' and addressed the possibility that Harken board members might know more about the spinoff plan, which included a stock rights offering, than the general public did.

The memo, did not instruct the board members whether to sell. One week after the memo was written, Bush sold his stock. In the following six months, the stock price dropped from $4 per share to $1.25 per share, although the price later recovered.

White House spokesman Dan Bartlett said the memo does not suggest that Bush refrain from selling the stock. Bartlett also said that the memo was sent to the Harken board, of which Bush was a member, but did not mention Bush by name.

''This is a general memo that goes through the perfunctory guidelines of a rights offering,'' Bartlett said. ''It was not specific to the transaction that the president was contemplating.''

SEC reports on the case make it clear, however, that the memo was written in response to Bush asking Harken executives whether he could sell his shares. Bartlett said he did not believe that Bush had seen the memo, but instead thought that Bush was told about the advice by a company lawyer.

The memo raised a specific concern about the insiders' knowledge of the rights offering, which split Harken into three entities. The plan was recommended by Harken board member Michael Eisenson, the Harvard Management executive in charge of the university's Harken investment. Eisenson was trying to save the company from bankruptcy, according to board meeting minutes. Eisenson has declined to be interviewed.

In 1990, Harken, a small, Texas-based energy company, was Harvard Management's seventh-largest stock holding. The investment, made in 1986, had been part of an ill-timed plunge by the university endowment into the energy sector. There has been speculation that Bush's presence on the Harken board attracted Harvard to the company. But former Harvard executives and others with knowledge of the Harken investment said Bush had nothing to do with the fund's investment.

The crucial question is whether Bush was motivated to sell when he did by information he learned at the special meeting of Harken directors on May 17, five weeks before he sold his stock. The meeting was held at a moment of crisis for the company, which was expected to run out of cash within three days, according to internal documents. One Harken memo related to the rights offering says the company had ''no other source of immediate financing'' if the deal was not completed. Indeed, the offering was necessary to get leniency from Harken's two lenders, the former Bank of Boston (now part of FleetBoston Financial) and First City Bank of Texas. The major shareholders, led by Harvard, had to put up financial guarantees to seal the bargain.

Meanwhile, Bush was pondering the sale of most of his own Harken holding, which he came into in 1986 when Harken bought out his interest in another failing oil venture, called Spectrum 7. Bush has said that a Los Angeles stockbroker, Ralph Smith, called him in early June 1990 to ask if he would sell his Harken shares to one of Smith's clients. Bush said no, but said he might be interested in selling ''in a few weeks,'' according to the SEC memo.

Shortly after the Smith call, Bush asked Harken's general counsel for advice. The counsel, in turn, asked Harken's law firm, Haynes and Boone, whose advice included this warning: ''The act of trading, particularly if close in time to the receipt of the inside information, is strong evidence that the insider's investment decision was based on the inside information. ... Unless the favorable facts clearly are more important than the unfavorable, the insider should be advised not to sell.''

The memo notes that in Harken's May 22 announcement, it ''does not disclose the purchase price for which the rights will be offered and expressly states that `additional terms of the proposed rights offering are currently being formulated.'''

The price would not be announced until Oct. 3; that's when investors would know how much they would have to pay to buy shares in spun-off companies. The Globe could not determine when Bush and other board members learned what the price would be.

One week after the memo was written, Bush sold his shares on June 22 via the broker, Smith. Smith could not be reached for comment, but has been quoted as saying the buyer was an institution that he would never reveal.

Nearly a year would go by before the SEC investigated the transaction, a delay caused in large measure because Bush was late in notifying the agency of his insider sale.

During the SEC investigation, Bush's lawyer was asked by the SEC what advice was given to Bush about selling. The Bush lawyer told the SEC that no objection to the sale was made by Harken's law firm. ''Haynes and Boone informed [Bush] that they had met internally to consider the issue and, based upon the information they had, they saw no reason why Bush could not sell his shares,'' the SEC report said.

The summary was released a day before the agency received the legal memo in which Harken and Boone offered much more cautious advice to Bush and the board. Jordan could not be reached to discuss the apparent conflict. The SEC investigators also declined to comment.

Harken remains financially troubled, with its stock trading at 22 cents a share. It is currently in the middle of another effort to raise capital.

As for Bush, he has often said that he could not be faulted for insider trading because he was selling into good news; the prior January Harken had entered into a deal to drill for oil in the Persian Gulf nation of Bahrain.

Michael Aguirre, a California securities lawyer who filed the original Freedom of Information request that led to the release of some of the documents, said he is astonished that the SEC did not investigate the rights offering.

''It was something they either overlooked or consciously avoided,'' he said. ''It appears that Mr. Bush had insider information, that he was told that such insider information could be considered material, [and] was given express warnings about what the consequences could be.''

Thus, Aguirre said, it is ''imperative'' that Bush allow the buyer of his stock to be identified because that would clarify whether Bush knew the buyer and conveyed inside information to the buyer.

© Copyright 2002 Globe Newspaper Company       It was reported that bush said that the SEC must have lost the paper work he filed. To me this explains to me why there were no WMD's in Iraq someone else must have lost the other paper work giving the other report about how they didn't.True or not I don't know I am just so proud of my troops who protect me so I can give voice to my thoughts. Thanks for serving.  One day later Bush's lawyer - Robert Jordan, now the US ambassador to Saudi Arabia - war for oil? I don't know. Oil field in Iraq bigger than Saudi Arabia? Very likely true.    

Thus I will still trade hard goods. gld,mon,pot. I will also trade on something else that you can't find on CAPS. I will trade on "WE THE PEOPLE" When the going gets tough the tough get going. We have survived the great depression, world wars, police actions which were really wars that were never declared,civil war, and the Alamo.Floods, tornadoes, fire,bombs, ( home grown and from abroad). Presidents who were impeached and step down (Nixon) and Clinton who stayed. We have had presidents who were killed. Lincoln and Kennedy. We as a Nation are so young we are just babies. Yes we make mistakes and fail. Just like the Phoenix we CAN rise up out of the ashes of our mistakes and failures. From the failures we will learn how not to do it. We the people of this great nation are on our pity pots and we need to get off of them to fix it. Start small dream big and work hard. I am just a  bookseller and I remember the story of the little engine who could. I think I can I know I can and so he did. Thus so can we. Thanks to all you caps fools who have helped me so much with all of your insight on the markets, stocks and life and most of all the humor. Special thanks to dwot for her insight as well as her kindness and forgiveness for when I go bonkers. Also to abitarecatania who helps me to see what is true out there and for his logic for when I am working on pure emotion. Rock on Fools and thank you.

 

6 Comments – Post Your Own

#1) On July 05, 2008 at 7:30 PM, FarelessWorrier (46.10) wrote:

lquadland10,

Nice post. I agree with you wholeheartedly, particularly on these points:

1. We are being spoon-fed misinformation from a group of ideologues in control of the major media, or what you call the media cartel.

2 What happened to Romas and Compion is a disgrace and if President Bush does not pardon them before he leaves office, it will be a glaring black mark on his presidency.

3. It is, in part, the apathy of America's citizenry that allows these things to happen.

I'm not sure where you were going with the SEC being part of the problem. I do know, however, that it was a big factor in the dot-com bubble. From about 1998-2000, the SEC was rubberstamping IPOs for companies with no earnings or even a strategy for generating revenue. Prior to that, there were strict requirement a company would have to meet before going public, not the least of which was having sustained revenue and a solid balance sheet.

I think other government agencies have contributed similarly to the housing bubble. Maybe somebody could help me out here -- Is there an agency whose job includes preventing lenders from making a vast number of loans with a high probability of default? Or, in the past, was it their own survival instinct that prevented such foolish behavior? How did they lose that survival instinct? Was it the S&L bailout that convinced them to take absurd risks and reap the profits until the party was over, then they could just leave the American taxpayer with the bill?

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#2) On July 05, 2008 at 10:40 PM, lquadland10 (< 20) wrote:

FarelessWorrier Thank you. I'm not sure where you were going with the SEC being part of the problem.  1. They were not doing the job they were hired to do.

Michael Aguirre, a California securities lawyer who filed the original Freedom of Information request that led to the release of some of the documents, said he is astonished that the SEC did not investigate the rights offering.

''It was something they either overlooked or consciously avoided,'' he said.                   When the checks and balances of the country are not used to control absolute power it will corrupt the entire nation. From 1920 on we as a country have listened to corrupt banking cartels and walked away from our Constitution. The formation of the FED. a system taken from England and it really is called the central bank. We freed ourself from England and then we went back to it.  We also created the IRS much like they have in England. Social Security and Medicare more social government. Many people I have listened to have asked me how the people of Germany let Hitler get into control?  To my simplistic way of  thinking it is much like we are doing today. First we let large Banks and corporations  gain access and influence to the government. Then with the creation of the Fed and Social security we gave more rights up to the government. Then we elected officials who over the years took away more of our rights under the guise of taking care of us. Control of the media who are in on taking control to gain money. This is the result of a 100 year business plan to take control of a country. (ABA, can explain it much better than I can.) Then we have an attact on the homeland  and more rights we give up for the government to protect us from the bad guys. ( Right the bad guys our CIA trained.) Patract Act. Homeland Security. /  We look more like Germany than ever before. Soon we will look like the old Russia. I think other government agencies have contributed similarly to the housing bubble. Yes you are right the Fed under Allen Greenspan also helped be allowing the sub prime and no regulation on the non bank loans. Could this be part of the plan to unite Canada Mexico and America into the north American Union much like the European Union? The Amero the Euro? just leave the American taxpayer with the bill? The American Taxpayer? For many a year now I have thought of myself as a subject of the government because they don't listen to WE THE PEOPLE. Listen to Cramer and you will hear the sarcasm when he refers to our government as for the corporations and by the corporations. Even Wall Street knows who runs our country and it is not us. Rockefeller J>P> Morgan and others. Obama or Mc Cain. It does not matter they are both part of the CFR as was Chaney and others.   . I call it Greed.Can anybody help us out here?  

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#3) On July 06, 2008 at 9:32 AM, XMFSinchiruna (27.35) wrote:

Iguadland... great post!  That SEC article is amazing.  Insider trading is a felony!!!  And his lawyer later becomes ambassador to Saudi Arabia?  More than fishy.. it's scary!

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#4) On July 06, 2008 at 7:13 PM, FarelessWorrier (46.10) wrote:

lquadland10,

Thanks for clearing up my question about the SEC failure. I thought you were referring to something more recent. In any case, the pattern of behavior certainly hasn't improved since 1990.

I find it impossible to be partisan these days, when both major parties are so corrupt. It's no wonder that both President Bush and the Democrat-controlled congress have historically low approval ratings. Neither does much to earn our approval, and I don't think they really care either.

Not to end on a sour note, I'd like to say that I share your optimism about what the people of this great nation can survive and what we can accomplish, as evidenced by our short history.

And to bring the conversation back from politics to economics... That the government is not even admitting to the actual inflation figures is a clear indication to keep investing in commodities. However, if it turns into global stagflation, then even those will decline, and there will be nothing to do but go bearish. For now, I'm staying in coal, oil, steel, fertilizers, etc.

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#5) On July 06, 2008 at 8:37 PM, lquadland10 (< 20) wrote:

That is our president for you. Have you thought of who helped him and the family history. Who does Fox news use all the time? Karl Rove. What are some of the ties to Hilter?Published on Monday, October 6, 2003 by The Free Press (Columbus, Ohio) Siege Heil: The Bush-Rove-Schwarzenegger Nazi Nexus and the Destabilization of California by Bob Fitrakis and Harvey Wasserman  

George W. Bush's grandfather helped finance the Nazi Party. Karl Rove's grandfather allegedly helped run the Nazi Party, and helped build the Birkenau Death Camp. Arnold Schwarzenegger's Austrian father volunteered for the infamous Nazi SA and became a ranking officer.

Together, they have destabilized California and are on the brink of bringing it a new Reich. With the Schwarzenegger candidacy they have laid siege to America's largest state, lining it up for the 2004 election.

The Bush family ties to the Nazi party are well known. In their 1994 Secret War Against the Jews, Mark Aarons and John Loftus use official US documents to establish that George Herbert Walker, George W. Bush's maternal great-grandfather, was one of Hitler's most important early backers. He funneled money to the rising young fascist through the Union Banking Corporation.

In 1926, Walker arranged to have his new son-in-law, Prescott Bush---father of President George Bush I, grandfather of George Bush II---hired as Vice President at W.A. Harriman and Company. Prescott became a senior partner when Harriman merged with a British-American investment company to become Brown Brothers Harriman. In 1934 Prescott Bush joined the Board of Directors of Union Banking.

The bank helped Hitler rise to power. It also helped him wage war. As late as July 31, 1941---well after the Nazi invasion of Poland---the U.S. government froze $3 million in Union Banking assets linked to Fritz Thyssen. Thyssen was noted in the American press as a "German industrialist and original backer of Adolph Hitler."

Loftus writes that Thyssen's "American friends in New York City [were] Prescott Bush and Herbert Walker, the father and father-in-law of a future President of the United States." That would be the current president's father, George Herbert Walker Bush, also the former CIA director.

On October 20, 1942, the U.S. government ordered the seizure of Nazi Germany's banking operations in New York City, which were under the direction of Prescott Bush. The government seized control of Union Banking Corporation under the Trading with the Enemy Act. The liquidation yielded a reported $750,000 apiece for Prescott Bush and George Herbert Walker. The book, The Splendid Blonde Beast: Money, Law and Genocide, goes into exhaustive detail on Bush-Harriman Nazi money laundering. More recently, Michael Kranish covers the same Bush-Nazi relationships in The Rise of the Bush Family Dynasty published in the Boston Globe. Loftus documents that "Prescott Bush knowingly served as a money launderer for the Nazis. Remember that Union Bank's books and accounts were frozen by the U.S. Alien Property Custodian in 1942 and not released back to the Bush family until 1951."

Often ignored are the Bush family's post-World War II dealings with former Nazis. John Foster Dulles, who had worked with the Bush family in the Harriman Company in laundering money for Nazi Germany, was Dwight Eisenhower's Secretary of State. His brother Allen became CIA director.

As Martin Lee documents in The Beast Reawakens, American intelligence recruited numerous top Nazis to spy on the Soviets during the Cold War. Many established connections to the Bush family that had helped finance their original rise to power. In 1988 Project Censored, in its top award, noted "how the major mass media ignored, overlooked or undercovered at least ten critical stories reported in America's alternative press that raised serious questions about the Republican candidate, George Bush, dating from his reported role as a CIA 'asset' in 1963 to his presidential campaign's connection with a network of anti-Semites with Nazi and fascist affiliations in 1988." Investigative reporter Russ Bellant established ties between the Republican Party and former Axis Nazis and fascists.

In 2000 and 2001 the Columbus Alive published a series of articles documenting further links between Bush, Sr. and the Rev. Sun Myung Moon and his own fascist networks in Japan and Korea.

Karl Rove has parallel ties. The shadowy Rove serves as "Bush's Brain" in the current White House. He is the political mastermind behind the California coup, and is now in the headlines for outing Valerie Plame, the CIA wife of Ambassador Joseph Wilson. A consummate strategist, Rove may have outed Plame in retaliation for Wilson's failure to back up the Bush claim that Saddam Hussein was buying nuclear weapons materials in Africa. According to some published reports, as many as seventy CIA operatives have been put at risk by Rove's retaliatory strike.

According to Wilson, and to Retired U.S. Navy Lt. Commander Al Martin (www.almartinraw.com), Rove's grandfather was Karl Heinz Roverer, the Gauleiter of Oldenburg. Roverer was Reich-Statthalter---Nazi State Party Chairman---for his region. He was also a partner and senior engineer in the Roverer Sud-Deutche Ingenieurburo A. G. engineering firm, which built the Birkenau death camp, at which tens of thousands of Jews, Gypsies, dissidents and other were slaughtered en masse.

Rove, who has been based in Utah and associated with the Mormon Church, is widely viewed as the chief engineer of the current Bush administration. He and Tom DeLay are attempting to force the Texas legislature to redistrict its Congressional delegations, adding seven sure seats to the Republican column. By controlling the state houses in New York, Florida, Texas and California, the GOP would have a lock on the four largest states in the union, and thus the ability to manipulate vote counts and strip voter registration rolls in the run-up to the 2004 election.

Rove is a prime behind-the-scenes mover in the Schwarzenegger campaign. On May 1, 1939, a year after the Nazis took control of Schwarzenegger's native Austria, his father Gustav, voluntarily joined Hilter's infamous Strumabteilung (SA), "brown shirt" stormtroopers. This was just six months after the brown shirts played a key role in the bloody Kristallnacht attacks on Germany's Jewish community.

The Vienna daily Der Standard noted recently that "Gustav, a high-ranking Nazi, brought up the bespectacled, rather frail boy with an iron fist and quite a few slaps in the face." Arnold's father favored a Hitler-style mustache in photos.

On October 3, ABC News broke the story of Schwarzenegger's 1977 interview in which he was asked whom he admired. Schwarzenegger replied, "I admire Hitler, for instance, because he came from being a little man with almost no formal education, up to power. I admire him for being such a good public speaker and for what he did with it."

To cover himself, Schwarzenegger has made substantial donations to the Los Angeles-based Wiesenthal Center, which tracks down ex-Nazis. Arnold has also renounced Hitler.

But he has not renounced his friendship with fellow Austrian Kurt Waldheim, the one-time head of the United Nations with known Nazi ties. The book Arnold: An Unauthorized Biography, documents Arnold toasting Waldheim, who had participated in Nazi atrocities during World War II, at his wedding to Maria Shriver. "My friends don't want me to mention Kurt's name, because of all the recent Nazi stuff and the U.N. controversy," Arnold said. "But I love him and Maria does to, and so thank you, Kurt."

On May 17, 2001, Schwarzenegger also met with Kenneth "Kenny Boy" Lay of Enron at the Peninsula Hotel in Los Angeles. Through the utility deregulation plan signed into law by Pete Wilson, Schwarzenegger's chief advisor, California was destabilized, bankrupting the state government and opening the door for Tuesday's recall election. Lay has been George W. Bush's chief financial backer, and a close associate of Karl Rove's.

According to Bob Woodward's Bush at War, Bush attended a New York Yankees game soon after the September 11 World Trade Center disaster. He wore a fireman's jacket. As he threw out the first pitch, the crowd roared. Thousands of fans stuck out their arms with thumbs up. Karl Rove, sitting in the box of Yankee owner George Steinbrenner, likened the roar of the crowd to "a Nazi rally."

He would know.

 

Bob Fitrakis's Spooks, Nuke & Nazis is now available at www.freepress.org. He is co-author with Harvey Wasserman of The SuperPower of Peace v. Bush et. al.. available November 1.

Harvey Wasserman is author of Harvey Wasserman's History of the United States and co-author (with Bob Fitrakis) of The Superpower of Peace v. Bush et. al., soon available from www.freepress.org. WE THE PEOPLE must be vigilant and see the country for what it is and what we can make it. A true patriot is just not our founding fathers and what they gave us. A patriot is you and me making a difference. Keeping what our founding fathers handed over to us. They passed the torch and now it is what we do with it that matters. Who is willing to force the SEC to do its job and enforce the laws of the land? I know that our government won't.The market might have bigger problems than insider trading that OUR PRESIDENT was sighted for and so to my simple way of thinking we have (an not charged as yet) felon running the country. I say buy gold food and fertilizer stocks because its bad out there. 1776  

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#6) On July 06, 2008 at 9:06 PM, lquadland10 (< 20) wrote:

FarelessWorrier And to bring the conversation back from politics to economics Yes you are so right but remember one small thing. Politics allways run economics and so you have to see the lay of the land. Such as the new Medacare bill that will futher bankrupt this great country of ours. Look into the bill and see what companies will profit from the bill. What is covered in the new bill that wasn't covered before and what companies will get the windfall. Also take John Deere (DE) member of the cfr. How will they profit if canada mexico and america are joined how will that affect the stock and would it be a good stock to own before it happens? What would happen to the stock if we don't become the American Union? Would it still be a good stock to own?   TMFSinchiruna Thank you .

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