News flash: kids are creative at circumventing the rules. Some are using iPods to cheat on tests, and administrators are pissed enough to ban iPods for all. There’s no need to rehash the details because anyone with a third-grade intellect could’ve predicted as much. Instead, consider a student who’s just a little bit smarter than her leaders in the school system:
Kelsey Nelson, a 17-year-old senior at the school, said she used to listen to music after completing her tests — something she can no longer do since the ban. Still, she said, the ban has not stopped some students from using the devices.
“You can just thread the earbud up your sleeve and then hold it to your ear like you’re resting your head on your hand,” Nelson said. “I think you should still be able to use iPods. People who are going to cheat are still going to cheat, with or without them.“
I’m not advocating a policy open to cheating, merely stating the obvious. As we learned with prohibition, and we’re (not) learning with the drug war, people looking to do what’s prohibited won’t stop just because it’s prohibited. Mostly, prohibition just harms the innocent from going about their innocent ways. Duh.
Next, this story on the likelihood of regulatory approval for the proposed Sirius-XM merger provides an elementary but useful finance lesson.
“The merger faces a very tough road at the FCC, where the public interest test applied by the commission is inherently subjective,” [Craig Moffett, a senior analyst with Sanford C. Bernstein] said. “In Washington, ‘subjective’ is codeword for ‘political.'”
The decline of the companies’ stock, analysts say, has less to do with the merits of the merger than with its prospects. They cited the political climate in Washington, where lawmakers have grilled Sirius chief executive Mel Karmazin about antitrust concerns during four hearings on Capitol Hill, as the driving force behind Wall Street’s pessimism.
When the two companies announced the merger, both share prices inched up. As time has gone by, and the
process rent-seeking kicks into gear, expectations of success declined. This has brought the share prices below the pre-merger levels. Pre-merger, the likelihood of an unannounced merger held prices at one level. The benefits of a merged company improved the analysis, providing better information in the process. Now, the prospects of two companies without any chance of merger takes that piece out of the shares.
As much as I hate what’s happening to the Sirius share price, markets are efficient.