Is Insider Trading
Part of the Fabric? Yes.
The fallout of Lehman Brothers is not divine justice making the worst, most greedy, pay the price for its sins. Many other banks were (and still are) just as bad, they were just lucky having a marginally better funding. What people want to ignore is how insignificant the difference was, hence that there is a lot more randomness in the selection of Lehman as the most-known casualty than what leaders want us to believe. Many more large banks would have collapsed by letting the market decide (the same markets everybody pretend they're right and fair-valued "by competition between multiple actors"). Banks continue lobbying right now against regulations forcing them to be properly capitalised and run safely, forcing them to avoid mixing all assets hence making any risk become a systematic risk...
You want some insider information? Lessons have not been learnt. Bank executives actively chose blinding themselves from the consequences of the situation (they created or inherited); they refuse dealing with the consequences of an low-regulated environment, they refuse doing something about it (be it helping designing meaningful regulation, or running their institution with the extra buffers necessary to survive without taxpayer assistance in a wild-west environment). Banks were complaining about hedge funds hammering them during the crisis, because hedge funds selling bank shares was indicating lack of investor confidence, which in turn incentivised rating agencies to downgrade banks, which justified a lower price for any investors (not just the initial hedge funds), etc: a nice down spiral! At the time, obviously banks called it market manipulation, insider trading, and called for short-selling to be limited... Nowadays, they call short-selling "hedging" and it officially reduces the risk of their portfolios and so it should not be limited for them. Until next time, it's against their interests again.
Seriously? And what do voters or their representatives do? Nothing;
so, is Insider
Trading Part of the Fabric? Yes. Because nobody wants to fix it.
Everybody hopes to get a share of the pie so, even if the pie is poisonous for
the environment, nobody wants to remove the pie! That's just plain,
community-damaging, world-damaging, short-sighted, personal greed. The most
amazing thing for me is that people were legally robbed by their government to
fund the dream of a share of pie they will never get in reality; but too few
fight back for it to be a revolution. Since we're referring to an article about
the U.S.A., do we need to remind people that the richest country (by GDP, 20th
by "GDP per head") of the planet also has no less than 12% of its population
below its national poverty line? Worse than Syria, and much worse than
Lybia!