Rolling Stone’s own Matt Taibbi interviewed industry expert Susanne Trimbath, Chief Economist at STP Advisory Services, LLC in Omaha, for his latest article in the magazine explaining “how we got into this financial crisis.” Taibbi’s latest piece looks at the history of the Bear Stearns and Lehman Brothers failures. His controversial article earlier this year, “Inside the Great American Bubble” on the undue influence of Goldman Sachs in contributing to and benefitting from the recent economic collapse and the subsequent bailout gained significant attention from media, investors, shareholders and companies.
In his new article, Trimbath tells Taibbi the story of how, in 1993, she tried to get senior management at the world’s largest central depository (Depository Trust Company) to stop allowing shares of stock in US companies to be multiplied through stock lending and excessive short selling. “You can’t balance the world,” was the response she got from regulators. She contends this is because “Wall Street is self-regulated and they don’t want to write regulations against themselves.” By 2003, the size of the problem had increased ten-fold; by 2008 it contributed to the collapse of major financial institutions and the global financial crisis. Trimbath goes into more detail about this, and the impact of naked short selling and failed trades on shareholders in the recently released Hollywood movie, “Stock Shock: The Short Selling of the American Dream.” (www.stockshockmovie.com)
Susanne Trimbath holds the Ph.D. degree in economics from New York University. She is an expert on post-trade securities operations and is featured in several films about Wall Street. She frequently acts as an expert witness in securities litigation. Trimbath is a former mid-level operations manager at Depository Trust Company (now a subsidiary of Depository Trust and Clearing Corporation in New York). Matt Taibbi, who is best known for his articles and books on politics, turned to writing and blogging on finance after the 2008 Presidential election. His new expose will be featured in the upcoming issue of Rolling Stone magazine due out in early October.

http://www.nypost.com/p/news/business/the_secret_to_goldman_sachs_good_WBlKYEyLfH7GP4zT0vNrEP

1. Hertz
2. Textron
3. Sprint Nextel
4. Macy’s
5. Mylan
6. Goodyear
7. CBS
8. Advanced Micro Devices
9. Las Vegas Sands
10. Interpublic Group

——————————–

QUESTION:

Is the SEC going to allow the rich and powerful through their Hedge Funds destroy these large companies through “Naked Counterfeit Short Selling”?

Since the SEC has openly stated that

> “Naked Counterfeit Short Selling” is NOT ILLEGAL in the United States,

> and we know that their actions have shown us over and over again that SEC lawyers protect their fraternity brothers on Wall Streets to protect their access to multi-million dollar jobs when then leave the SEC,

it appears that these companies and the all the jobs of American workers created by these companies will be targeted for destruction by the Wall Street Counterfeit Machine.

If this happens, it will be another sad day in the history of American.

http://www.finalternatives.com/node/9124

Nice work if you can get it.

Perot Options Trading Rose to 7-Year High Before Bid (Update1)
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By David Scheer and Jeff Kearns

Sept. 21 (Bloomberg) — Trading in bullish Perot Systems Corp. options jumped to a seven-year high Sept. 18 before Dell Inc. said today it will buy the company for $3.9 billion.

Calls volume climbed to 2,539 contracts, or 242 times the four-week average, according to data compiled by Bloomberg. Only 10 puts traded that day, the data show. The shares, which rose 0.1 percent to $17.91 on Sept. 18, surged 65 percent to $29.62 at 11:03 a.m. New York time today.

Call options, which convey the right to buy stock at a specified price by a certain date, often return more to investors speculating on takeover targets. Some of the U.S. Securities and Exchange Commission’s biggest insider-trading cases have focused on purchases of options before acquisitions of companies such as Dow Jones & Co. and TXU Corp.

“The question is whether there was insider trading,” said Tamar Frankel, a professor at Boston University School of Law who has testified to Congress on financial regulation. “It’s enough of a bump to warrant attention, and it’s not costly for regulators to inquire.”

SEC spokesman John Heine and Dell spokesman David Frink declined to comment. Perot spokesman Marvin Singleton didn’t immediately return a call for comment.

Most Active

The last session’s most-active options were October $20 calls, which gained 22 percent to 55 cents Sept. 18 and jumped 1,645 percent to $9.60 today. Those contracts, which expire Oct. 16, are also the most widely owned options, accounting for about half of all 10,353 Perot contracts. Last week’s call volume of 8,279 contracts is almost double that of the preceding three months, according to data compiled by Bloomberg.

“When there’s a volume spike on a legitimate takeover it smacks of insider trading,” said Steve Sosnick, equity risk manager at Timber Hill LLC, the market-making unit of Greenwich, Connecticut-based Interactive Brokers Group Inc. “What made people wake up Friday and decide to make big bets in upside calls on Perot? That’s the question that has to be asked and the most obvious answer is probably that someone got wind of the transaction.”

Sosnick’s firm doesn’t make markets in Perot options.

Other factors may explain the trading, such as investments triggered by changes in the price of Perot’s stock, Frankel said.

Dell said in a statement today that it agreed to buy Perot, founded by former U.S. presidential candidate H. Ross Perot, undertaking its biggest purchase ever to compete with Armonk, New York-based International Business Machines Corp. and Palo Alto, California-based Hewlett-Packard Co. in computer services.

Dell, the second-biggest maker of personal computers, offered $30 a share in cash, about 68 percent more than Plano, Texas-based Perot’s closing price Sept. 18. The acquisition probably will boost profit in fiscal 2012, Round Rock, Texas- based Dell said in a statement today.

To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net. David Scheer in New York at dscheer@bloomberg.net