As should be clear from the contents of Deep Capture, the world of illegal naked short selling is a weird one, populated by sociopathic billionaires, slick lobbyists, famous felons, bent regulators, crooked law firms, corporate spies, message board maniacs, sinister banks, shifty private investigators, mendacious professors, professional dissemblers, propagandists, grifters, thugs, liars, and the Mafia.
Things become all the more weird when you consider that regulators and law enforcement do almost nothing to stop naked short selling, even though a growing number of prominent people – everyone from U.S. Senators to George Soros – insist that criminal naked short sellers helped take down Bear Stearns, Lehman Brothers, and the American financial system. Then there’s the weird fact that anybody who tries to shed light on this weird state of affairs is quickly subjected to smear campaigns that are…weird.
Anyway, message to Matt Taibbi: Welcome to our world.
Taibbi, as many people know, is the star reporter who published a major expose about naked short selling in the most recent issue of Rolling Stone magazine. In addition, he has published a few blogs providing more evidence to support his claim that illegal naked short selling is a big deal and it’s pretty “hilarious,” as he puts it, that the government hasn’t prosecuted the people who might have helped crash the financial system.
In one of his blogs (which you can read here), Taibbi posts a video that seems to show a day trader conducting a short sale of stock in an unnamed big bank through a brokerage called Penson Financial. The SEC says that short sellers have to have “reasonable grounds” that they can locate actual stock to deliver to their buyers. As Taibbi rightly points out, this is a “very funny piece of regulatory policy – asking greedy ass financial companies to determine what to them is a ‘reasonable’ effort to follow the rules. “
At any rate, if you believe what you see in Taibbi’s video, Penson Financial gave that day trader a phony “locate” on quite a few of the unnamed big bank’s shares. In fact, the video seems to show Penson Financial confirming that it had “located” many billions of the unnamed big bank’s shares – altogether, five times as many shares as were then in circulation. In other words, it seems that if this trader had had the inclination and the funds, Penson would have accepted a massive naked short sale, helping the trader flood the market with billions upon billions of shares that simply did not exist.
This is rather important because Deep Capture has reviewed evidence showing that little Penson Financial and one other relatively unknown firm were by far the biggest traders in financial stocks in the first nine months of last year, handling more than 80 percent of volume. To repeat, Penson Financial, a little firm in Dallas, Texas, and one other relatively small firm handled by far the biggest volume of trading in the stock of all those big banks that collapsed last year, leading to the worst financial crisis since the Great Depression. When it came to clearing trades in financial stocks, Penson was bigger than Goldman, bigger than Merrill, bigger than every major brokerage on Wall Street.
We do not know for certain that the trading through Penson was naked short selling. We know only that naked short selling accounted for much of the overall trading last fall in companies like Lehman Brothers. And we know that a preponderance of the overall trading went through Penson. Perhaps Penson carefully weeded out the naked short sellers, in which case it handled almost all of the trading in financial stocks except for naked short selling. But if Taibbi’s video is any indication, Penson was certainly willing to locate stock that did not exist.
If I have anything to add to Taibbi’s terrific reporting, it is this: Penson Financial’s vice president in charge of stock clearing (that is, the head of the division that appears to have located stock that did not exist) is a man named Christopher Sandel. From 1985 to 1995, Sandel was a top executive at Adler Coleman, best known for being the clearing firm to the Genovese Mafia family.
Adler Coleman famously went bust when its top customer, the Genovese-controlled brokerage Hanover Sterling, self-imploded in one of the greatest naked short selling scandals of all time. Several traders tied to the Gambino crime family were charged with naked short selling companies that were underwritten by Hanover. That the Genovese Mafia brokers at Hanover were not charged in this case seems odd, because the most likely scenario is that the Genovese underwrote hapless companies, pumped their stock prices, and then called in the Gambinos to vaporize the companies, with everybody profiting on the way down.
Anyway, when some of America’s biggest financial companies collapsed under a barrage of short selling last fall, an enormous chunk of that trading was being cleared by a fellow who used to work for a company that seemed to specialize in clearing trades for the Mafia. Should this concern us? Might the Mafia have played some role in the collapse of the financial system? If I were more heavily armed, I would venture an opinion.
Now, of course, there is a concerted effort to portray Taibbi as a sucker, and his video as a fake. One blogger who has suggested as much is Gary Weiss, a former BusinessWeek reporter. As we have documented elsewhere on Deep Capture, Gary Weiss is a corrupt pseudo-journalist whose sources have included naked short sellers with ties to the Mob. Among Gary’s favorite sources were John Fiero (fined $1 million in Hanover Sterling scandal), Anthony Elgindy (currently serving an 11 year prison sentence for short selling crimes and alleged to have had his finger sawed off by Russian mafiosi who were concerned that he would become a government informer), and Manuel Asensio (who once worked for a Mafia-controlled brokerage called First Hanover).
Weiss has reported extensively on the Mafia’s infiltration of Wall Street, but he has, for years, insisted that only conspiracy theorists believe naked short selling is problem. He wrote a great deal about Hanover Sterling, but not once did he mention that naked short selling was central to that case. In his book, “The Mob on Wall Street,” Weiss told the story of a Genovese Mafia broker, and mentioned that this Mafia broker claimed to clear his trades through none other than…Penson Financial.
But, of course, Gary insisted that the Mafia broker must have been lying, because Penson is a “legitimate firm.”
Meanwhile, a blog called ClusterStock has also suggested that Taibbi’s video is a “hoax.” Taibbi has written a fine rebuttal to that claim (which you can read here), so I have nothing to add, except that ClusterStock was founded by Henry Blodget, who was famously charged with securities fraud in 2002, and by the former co-owners of DoubleClick, a company that was once defrauded by the Colombo Mafia family. DoubleClick was never charged with any crimes, as it was, alas, the victim. Such is the sad fate of many firms that have business dealings with the Mafia (of course, this fate may be avoided by adhering to a simple dictum: “Avoid having dealings with the Mafia”).
I tell you this not because I think there is some kind of conspiracy, but merely because I am fascinated by the always colorful biographies of people who attack those who seek to expose the crime of naked short selling. Blodget is, by all accounts, a reformed criminal, and I’m sure the other people at ClusterStock are law-abiding people. Gary Weiss would be perfectly innocent, too — except that he’s an out-and-out fraud.
Recently, Deep Capture reporter Judd Bagley revealed that Weiss was the anonymous author of a blog on the popular website Daily Kos. This blog, of course, denied that naked short selling is a crime, while smearing those who said otherwise. To support its smears, the blog, written by the anonymous Gary Weiss, referred readers to another blog, written by none other than Gary Weiss. Indeed, Gary Weiss has had a great many phony on-line aliases, and all of these Gary Weiss aliases proclaim that Gary Weiss is right and great.
In a variation of this on-line chicanery, ClusterStock’s writers littered the comments section of Taibbi’s blog with allegations that his video was a “hoax.” To support these allegations, the ClusterStock writers provided links to another blog…ClusterStock. Presumably, Gary Weiss will also provide links to ClusterStock. Oh wait, he already did that.
Meanwhile, Penson Financial, has written a letter to the SEC, suggesting that Taibbi’s video was (what else?)…”a hoax.” In the letter, Penson Financial, which was fined in 2006 for naked short selling, promises that it does not engage in naked short selling.
The SEC no doubt believes this.
I think it’s funny that the folks at ClusterStock first claimed that the short selling video that Taibbi posted was a fake–and later asserted that the video showed “the system working properly.” Weisenthal–in one of his posts–provided a link to another blogger named “Kid Dynamite”…so we could get his expert opinion on the matter.
I guess Taibbi has made a lot of enemies–as I would guess most “real” journalists do.
You make an excellent point, Elaine. It’s honestly funny to see the bad guys fall all over themselves the way they are. More than anything, this is the ultimate vindication of everything else Matt Taibbi has written on the subject. They can’t touch any of that, so they hammer away at the one thing Matt can’t prove empirically; and since he’s presumably made commitments to a source, he’s limited by what he can say in response.
Yet they’re deafeningly silent on the truly damning stuff, which appeared in Rolling Stone this week.
Hacks like John Carney and Joe Weisenthal need to wake up to the reality that mindless defense of the shorts went out of style a while ago.
I hate to rain on the parade on naked short-selling, but I think that it is far-fetched to look for the reasons of the collapse of BS and LB in the actions of short-sellers.
Lest we forget, BS collapsed because its counterparties (other banks) decided not to renew their overnight lines of credits with Bear. If they would have wanted, or the Fed would have wanted to keep Bear alive, they just needed to extend credit lines to the bank. Ultimately, they did that by organizing the purchase of Bear by JPM.
What does short-selling have to do with this? Not much, really. If people thought that BS should go to zero, that was their right after all. That’s the way markets work. The BS/Lehman crisis was a credit crisis, not a stock market crisis.
Let us not forget that the harbinger of the subprime crisis was the collapse of two funds run by Bear, which led people to believe that other IBs would have off balance sheet and SIV vehicles. Thus their financial situation and creditworthiness was questioned and rightly so.
A small firm in Texas or Arkansas of “short sellers” did not bring down the financial system. If you believe this, then you are ignoring the credit aspect of the crisis of 2007/2008, which is what actually happened. CDS contracts were margined at 30 to 1 leverage, so the maintenance of creditworthiness was essential to maintaint he business.
Let’s not look for “mysteries” and “culprits” with music magazine journalists. This is finance, after all.
Dear Mr. Avellaneda,
I’m not leading or joining in any “naked short-selling” parade. Neither am I a believer in conspiracy theories. Please don’t presume that I am. I’m sorry that you consider me such a poor benighted soul in regard to finance. Maybe I am. I don’t have a degree in mathematics. I’ve never worked on Wall Street. I just worked as a teacher for more than thirty-five years. I tried to put as much money aside for my retirement as I could afford. I guess I was wrong to suppose that the financial experts–many of whom never saw the financial crisis looming on the horizon–would take care of things. That was probably my biggest mistake.
I believe there are many thousands–maybe millions–like me who were careful with our money, invested what we could, and lost quite a bit last year–a paltry bit by Wall Street standards…to be sure. Some of us out here on Main Street are trying to figure out what caused the near financial collapse of our economy. We are just looking for answers–and culprits too! Maybe some of us are reading the writings of a “magazine journalist” because he’s at least attempting to explain things to us without talking down to us or treating us like we’re too dumb to understand the complicated workings of the stock market, derivatives, etc.
I left my comment above because I think it’s interesting that some financial bloggers/journalists would rather attack the writings of Matt Taibbi than go out and do some investigative digging themselves.
Please keep up the heat.
The fate of the nation hangs on this, unless it’s already too late.
Ah, Jim. It’s not that bad. We can all become “Gumbahs”.
So, enjoy your day. A corrupt Congress, Regulatory system. Finra/rico, As Marcopolous said. Do what I do…….
Look – they just got around to investigating the guys doing PIPEs. How long has this ____ been going on? They invest a little money to get control of the stock, naked short it to death, and walk away from the carcass, and our regulators take 5-10 years to figure it out? They miss Madoff, miss Stanford, can’t tell us who naked shorted Bear and Lehman, but they can track down one bad trade by Martha Stewart….
There are people (myself included) that have been talking about naked short selling for 10 years….TEN years…and we’re still having roundtable discussions?
People have lost their lives over this BS and our government still wants to TALK about it?
This is obstruction and obfuscation at its finest. All of this “conversation” just gives miscreants more time to either run their games or clean up the mess as best they can before some token legislation is passed – nothing less.
It is what it appears to be. It is a government that protects certain people and persecutes others…no wait that was happening during WWII, that can’t be America…no…..wait…..
It IS America…
Our country has become what our parents fought against….
Actually, they were talking about naked shorting in the 1970’s. Read some of Richard Ney’s books (Wallstreet Jungle, etc.)
Check my link towards the end of the comments in the last blog post. Around 1976, they legislated centralized counterparties as a short term temporary solution, which created a big problem, which only got many times bigger when the DTCC was formed in 1999.
It’s completely criminal to represent you have an asset in custody when you don’t and that’s the bottom line. It’s fraud by some of the biggest families in the country, the same families who anoint who gets elected and they’re not afraid of the little people.
Watch out for the pitchforks and torches.
Here is an interesting DeepCapture Tweeter Link:
What I find interesting in this story is the CONTRADICTION between the words and proposal from “Representative Paul Kanjorski, the Democratic chairman of the House of Representatives capital markets subcommittee.”
Here are Representative Paul Kanjorski words:
“Many financial firms skirt government oversight and get away like bandits, but now the advisers to hedge funds, private equity firms, and other private pools of capital would become subject to more scrutiny by the SEC,” Kanjorski said.
Here are a few points about his proposals:
> “Kanjorski’s bill is nearly identical, except that it adds a section specifically >>>>> EXEMPTING <<<< “Separately, Kanjorski also released draft legislation calling for the establishment of an Office of National Insurance within the Treasury Department. It also mirrors an Obama administration bill proposed earlier this year, except that it would >>>> NOT <<<<< give the new office subpoena power."
Representative Paul Kanjorski strong words DO NOT AGREE with his proposal that provides "EXEMPTIONS" and "NO SUBPOENA POWER"….
This is the typical BS we get from our DC Elected Officials – Talk strong and only give the appears of regulation!!!
This is unacceptable to me.
The graphic artwork in the Taibibi Rolling Stone article got me thinking. It’s (not so) funny how much Wall Street has “devolved” over the years. First came this concept of doing business as a “U.S. corporation”. The units of equity ownership of this “corporation” were referred to as “shares” of the corporation. The foundational premise of the “corporation” was limited liability, diversified ownership and concentrated management wherein the “shareholders” elected a board of directors that appointed management members. The voting for the board of directors was predicated upon a “one share, one vote” foundation wherein at any one time there was a publicly available and finite number of “shares outstanding”.
Later there became a desire to buy and sell these “units of equity ownership” or “shares” of these “corporations” so markets were established. The DTCC was given the Section 17 A congressional mandate via the SEC to make sure that all transactions in the trading of these finite number of “shares outstanding” would “promptly settle” on a delivery versus payment (DVP) basis. The “prompt delivery” of that purchased would occur in exchange for the “prompt payment” for that purchased.
The Wall Street “banksters” entrusted by the public to act as “securities intermediaries” in these “markets” and pictured in Matt Taibibi’s Rolling Stone article as hyenas picking away at a carcass have totally thrown under the bus the concept of doing business as a “U.S. corporation” based on “one share, one vote” with a finite number of readily identifiable “shares/votes” outstanding”.
What do we have now in its place? We have rampant over voting in all 431 of 431 corporations studied as well as “empty voting” throwing corporate governance measures as well as “ownership” issues into chaos. Due to the DTCC’s insistence on holding shares in an “anonymously pooled” format we have the same parcel of impossible to identify shares being loaned out simultaneously in perhaps a dozen different directions. In the case of “hard to borrow” securities with large positive rebate spreads all 12 of the “banksters” making these loans are making a tremendous amount of money lending the very same parcel of impossible to identify shares in multiple directions simultaneously.
Some of the 12 different short sellers borrowing these 12 identical parcels of shares don’t mind paying high rental fees because they know they can easily drive the share price of the corporation targeted for an attack into the ground because the 12 different U.S. citizens purchasing this very same parcel of impossible to identify “borrowed” shares must be given the right to resell that which they purchased lest the counterfeiting nature of abusive naked short selling frauds be revealed.
Those short sellers that prefer not to pay expensive borrowing rates can simply refuse to deliver that which they sold while relying on the DTCC management to pretend to be “powerless” to buy-in their delivery failure despite the fact that they have attained 15 of the 16 sources of empowerment to execute these all important buy-ins when their abusive “participants” absolutely refuse to deliver that which they sold. The share structures of U.S. corporations unfortunate enough to have been targeted for an attack have become riddled with astronomic amounts of readily sellable share price depressing “security entitlements” which have been induced to be issued with each and every failure to deliver on Wall Street as well as each and every NSCC “SBP” (stock borrow program) borrow executed to theoretically cure one of these “FTDs”. While Rome is burning what are the regulators congressionally mandated to provide investor protection doing? As per the wishes of the banksters that have them “captured” they’re busy rescinding one of the critical protections from naked short selling frauds i.e. the 75-year old “uptick rule” and calling for yet more reform delaying “comment periods” and “roundtables” in an effort to appear to be engaged in performing their job while actually serving the needs of those that have them “captured”.
Just as the banks that make up the Federal Reserve have issued enormous amounts of fiat currency serving only to enrich themselves these very same criminals are busy “issuing” fiat monthly brokerage statements implying that the securities purchased by U.S. investors have indeed been delivered and are being held by their clearing firm when nothing could be further from the truth.
I think the regulators and their overseers need to take a giant step backwards and realize that neither they nor those they are theoretically regulating have now or ever had the statutory authority to change the very essence of the U.S. corporations they volunteered to act as intermediaries in the trading of their ownership units. Our markets have been hijacked!
Dr. DeCosta, thanks again for you invaluable input. So lets see if I have this right. The DTCC is running a ponzi scheme like Madoff, the only difference is Madoff was keeping the money himself, not buying phantom shares and sharing/giving the proceeds to the Prime Brokers like evryone else involved in the scheme was/is doing. The Powers that be got mad because Madoff was not sharing the wealth with them and used him as a sacrificial lamb. Anyone can produce a brokerage statement stating shares were purchased no? These guys may just be in for a world of hurt if and when this scheme goes mainstream to John Q. Public. Atta boy Matt T. Welcome to Ours world as Mark indicated.
Your citing of only needing “reasonable grounds” to believe that a “locate” will result in delivery by T+3 is bang on and has 2 unconscionable corrolaries. #1 is that a “customer representation” is sufficient to provide “reasonable grounds”. A corrupt hedge fund can thus tell his corrupt prime broker “no problem I already took care of the locate; just process the short sale”. Secondly, unspecified “reasonable grounds” provides the perfect excuse for the SEC Enforcement Division NOT to bring a case because they are indeed nearly 100% impossible to bring. Like they needed yet more excuses not to bring NSS cases.
Recall the SEC’s Inspector General’s audit no. 450 revealing that of over 5,000 naked short selling complaints formally registered ZERO led to any enforcement action. Equally remarkable was that of over 900 actions referred to the SEC by FINRA ZERO were related to abusive naked short selling.
When I saw that “reasonable grounds” wording in Reg SHO I knew that many hundreds of U.S. corporations were going to go under because of the 2 corrolaries cited above. No chance of any SEC Enforcement Division cases equates to no deterrence.
In regards to the role of the clearing firms they’ve always had a free ride in the abusive naked short selling arena. When busted they can always say since you didn’t define “reasonable grounds” you can’t come after us. They’ll claim that it’s not their job to play securities cops with their clients. Can you imagine a larger conflict of interest than counting on either a prime broker, executing broker or clearing firm squealing on the hedge fund that sends it business? In the clearing firm arena it’s survival of the corruptest and somebody’s bound to take up the slack now that Bear Stearn’s clearing division is gone.
The “Ponzi Scheme” aspect to the operations of the DTCC that you refer to goes like this:
1) Pretty much everybody keeps their shares at the DTCC in “street name” because it’s really is handy. Thus the owners of the DTCC have full access to and visibility of the amount of borrowable shares held there before they target a corporation for an attack.
2) The DTCC operates as a “black box”. Investors have zero visibility of what is going on with the shares they purchased and whether or not they got delivery of that which they paid for.
3) Whether or not they got delivery of that which they paid for they will receive a monthly brokerage statement IMPLYING that what they purchased is being “held long” by their b/d. They are awarded a “long position”.
4) When an FTD occurs and is “cured” by an SBP “borrow” the legal ownership of the “borrowed” shares goes to the purchaser of the shares that involved an FTD. The purchaser’s money goes to the lending broker to (theoretically) “collateralize” this debt.
5) With this “legal ownership” the clearing firm of this buying party has all of the right in the world to re-donate this very same parcel of recently “borrowed” shares right back into this very same SBP lending pool AS IF IT NEVER LEFT IN THE FIRST PLACE.
6) After the “borrow” cures the FTD the original owner of those “borrowed” shares that just lost “legal ownership” gets his account credited with a readily sellable share price depressing “security entitlement”. He now has a readily sellable “long position” that acts just like a “phantom share” since by law (UCC Article 8) it must be treated as being readily sellable as if it were a “share”.
7) Thus one FTD resulted in the transfer of legal ownership as well as the “issuance” of an equal amount of share price depressing “security entitlements” that are credited to the account of the original owner of the “loaned” shares. He has no idea that his shares were ever loaned. His monthly brokerage statement does not change at all as the terminology on a monthly statement says nothing about “shares owned” it only refers to “securities held long”. A mere “security entitlement” evidencing an FTD gives rise to a “long position”.
8) If this SBP swapping of the “legal ownership” of shares in exchange for the buyer’s cash which you and I refer to as a “purchase” and not a “loan/borrow” as construed by the DTCC were classified as a “purchase” then there would be no reason to “issue” that share price depressing “security entitlement” and investors in U.S. corporations would be protected from these thefts. But no the employees of the financial beneficiaries of these thefts (the NSCC management) insist on referring to these purchases as loans.
9) Supply and demand still interact to determine share prices but the “supply” variable includes the “supply” of everything that is treated as being readily sellable and thus consists of the arithmetic sum of legitimate “shares owned” PLUS the number of “security entitlements” issued by each and every FTD and SBP “borrow” that the employees of the beneficiaries of these thefts refuse to buy-in even AFTER attaining 15 of the 16 sources of empowerment to do so.
10) Any clearance and settlement system with one iota of integrity would not allow these corporate assassins referred to as “security entitlements” to be issued in the first place especially if the NSCC management is going to pretend to be “powerless” to deal with them after gaining a monopoly on the sources of empowerment to deal with them. This means that no FTDs are allowed. This is turn necessitates a “firm decrementing pre-borrow” before any short sales are allowed and the securities must be in place and ready for a T+3 delivery before any “long sale” is allowed.
Sean, I’m going to open up the “forum” that the deepcapture folks graciously gave me so that I don’t steal the bandwith on this venue especially with Matt Taibibi joining the team. Dr. d
The end purpose of the DTCC is to get rid of paper certificates and hide all the evidence. Remember who owns the DTCC.
One other thing… this is a Ponzi scheme on a scale that puts Bernie Madoff to shame.
I see to the “Wall Street Counterfeit Machine” as a Second Tier Ponzi Scheme, because it allows the Wall Streeters using this machine to steal money from the common man and woman American worker’s investment funds, instead of the direct investors in Wall Streeters Firms.
The SEC in introducing Reg SHO institutionalized this Second Tier Ponzi Scheme. And the SEC leadership is dedicated to protecting this Ponzi Scheme because it produces billions and billions of dollars for Wall Streeter bonuses. How else can Goldman Sachs and the other Wall Street firms hand out 5 billion dollars in bonuses at the end of the year?
The problem we common American citizens have in getting this Second Tier Ponzi Scheme outlawed is that it is producing tremendous wealth for the Wall Streeters and our elected officials.
As I found out recently from news reports, our DC Elected Officials in Congress, their staff, AND amazingly Lobbyist are EXEMPT from insider trading!!
No wonder our former elected Senators and Representatives become Lobbyist – so they can continue to milk the Second Tier Ponzi Scheme, the Wall Street Counterfeit Machine!
No wonder we have elected officials with family members working in Hedge Funds, and as Lobbyist who work for Hedge Funds.
No wonder we have Wall Streeters who make millions per year deciding to become SEC Commissioners – to protect this Second Tier Ponzi Scheme.
No wonder… the SEC and our Elected Officials in DC refuse to shut down this Ponzi Scheme.
Anyone notice how the mafia is not being pursued by the authorities anymore?
Is it because (pick one):
a) The FBI gave up
b) The Mafia is now entrenched in wallstreet and the US gov’t
c) a & b
What do you think…?
There’s been a spat of prosecuting the little guys lately. Basically, they *are* the authorities.
Einhorn won’t rest until he sells the USA down the river:
Charlie Rangel: Only sucka’s pay taxes:
Jim, Rangel and Geithner out to hang out together don’t you think???
Sean, They are part of the cabal to whom taxes don’t apply.
A little off topic but relevant to the corruption I’m sure..
This may sound “pie in the sky”, but has anyone with the means considered filing a writ of mandamus with the appropriate courts demanding the SEC exercise their duty and uphold and enforce the the law? If I am reading correctly the law is being twisted by insiders, therefore it would seem there should be some fundamental arguments which could be made which demonstrate a double standard which constitutionaly should make the existing scheme of investigation and enforcement null and void.
If this works it should really boost the sales of kevlar Armani!
Hey Mark, remeber when I told you “ALL HEDGFUNDS WERE PONZI SCHEMES”well it seems I was wrong …. only the billion dollar ones are!!! Was anyone able to find this news in our Captured “Main Stream Media”
Chicago hedge fund manager in jail
Kuala Lumpur News.Net
Friday 9th October, 2009
A Chicago hedge fund manager has pleaded guilty to federal charges in what was described by prosecutors as a multibillion-dollar Ponzi scheme.
Gregory Bell, pleaded guilty to one count of mail fraud over a scheme allegedly masterminded and orchestrated by businessman Tom Petters.
Bell is in federal custody after acknowledging that he helped engineer financial transactions to create the appearance that the alleged Ponzi scheme was above board.
Bell faces up to 20 years in prison and a $250,000 fine. He will be sentenced at a later date.
He joins an account executive from his firm and four close associates of Petters who have pleaded guilty to various criminal charges relating directly to the alleged $3.5 billion scheme.
I was told that much of the naked short selling was being run through Malaysia because they had good trading access to our markets. The dateline of this story of Kuala Lumpur is interesting.
The DTCC doesn’t require foreign depositories to settle, as long as they claim they are short against an offsetting long position on another exchange (to encourage hedging).
This “liar arbitrage” exemption is a big problem for naked shorting.
That would explain the ‘asian’ aspects of the message board verbiage in postings relating to beat-up stocks. MNKD for example.
Everyone who has a problem with NSS needs to submit a public comment to the SEC – http://www.sec.gov/spotlight/shortsales.shtml
A good template/petition can be found at – http://www.petitiononline.com/mrktrfrm/petition.html
They just don’t care, period.
Our Government has also been captured.
no mention of the Rolling Stone article on Wikipedia’s “naked short selling” article yet.
“Naked” short selling is featured in writing on the front cover of Rolling Stone, one of the most widely circulated mags in the states
JohnnyBGaryWeiss&JohnNevard256 would have added it in 3 minutes flat if it was slanted in there favour….but since it’s supportive of Byrne’s 4 year long Shout of Delores, not so much…
oh yeah, here’s the link – have at it with adding in Matt’s material:
Fractional reserve brokerages take their lead from the fraudulent banking system, the first to legalize private counterfeiting within their own cartel.
“Modern economists do not acknowledge that fractional reserve banking is a gigantic system of counterfeiting. They do not apply the same analysis to fractional reserve banking that they would apply to counterfeiting if they discussed counterfeiting. They rarely discuss counterfeiting. This is because they know that bright students can make the analytical connection. The students will be tempted to conclude what is in fact the case, namely, that fractional reserve banking is a form of counterfeiting.”
Attached is an article which complete debunks the theory that “naked short sales” caused the crash of Bear Stearns.
The article proves that the large fails to deliver did not even start until March 20. That means that any large “naked short sales” took place on Monday March 17 and after. Of course Bear Stearns traded below $4 on the opening on March 17 having closed on Friday at $30. Since there was no trading between the close at $30 on Friday and the opening on Monday at below $4, claiming that “naked short sales” caused the Bear Stearns is not only just a mistake.
The idea that “naked short sales” collapsed Bear Stearns can only be held by some one who is deliberately promoting something he has not investigated or he has and is deliberately lying.
In the past, I thought promoters of the view were merely guilty of the logical fallacy of “post hoc ergo prompter hoc” but I now know that the false claim is deliberate.
Res Ipsa loquitur
The DTCC fails data is the tip of the iceberg which misses x-clearing, desking, foreign abitrage naked short selling, etc.
A lot of people weren’t selling. For example, insiders weren’t filing form 4’s. The maximum trading should have been the public float over a three day period. It was a lot more than that.
Duh. Someone had the counterfeit printing presses going full bore.
The failure of Bear Stearns hid a lot of hanky panky, netting problems, while punishing them for not participating in the bail out of Long Term Capital Management. The failure protected the banks from having to write down their asset values.
I have a problem with you using this forum to spam your own website to try and make money.
I took a look at that business-student’s powerpoint slideshow. Quite inadequate analysis, I think.
Consider that _normal_ trading, e.g., prompt delivery of shares in exchange for prompt payment, is supposed to settle or clear on Day T+3, while short-sales are not considered failed-to-deliver until… what, T+5?
As I have commented in the “Rolling Stone report…” thread (10/5), “Assuming a finite number of shares _and_ a strict adherence either to the T+3 rule or to actual-location rules for short-sales, then you could never have trading volume in a _single day_ greater than 100% of outstanding shares. Agreed? But that’s exactly what happened with Bear Stearns in March 2008 (161% on Friday 3/14, 144% on Monday 3/17, and again 144% on Tuesday 3/18).”
If trading volume on Friday 3/14 was 161% of outstanding shares, legitimate delivery-for-payment trades had to settle on T+3, which was Wednesday 3/18. Illegitimate naked-short-sales wouldn’t be reported as having failed until T+5, which was Friday 3/20. And if appearing on a SHO list required five consecutive trading days of above-threshold FTDs, well… there you have it. At least three trading consecutive days that I describe on which impossibly high volumes were “transacted.”
There is only one way a single day’s trading volume could _ever_ exceed 100% of outstanding shares – and that is if the market-making machinery has become fundamentally corrupted. In particular, that market machinery is not, in fact, “freezing” shares for which transactions are pending. Nor is it, in fact, requiring a one-for-one correspondence between real shares and those “borrowed” by short-sellers.
It seems to me that, instead of accusing the NSS detractors of logical fallacies (in misspelled Latin legal jargon, to boot), one might prefer to do some simple arithmetic on the calendar dates of our too-slow trade-settlement system.
That b-school student should be glad he’s not in one of my classes; even the “Gentleman’s C” is out of his reach.
To Dr mark 2006 and anonymous etc . The person who created the analysis of the Bear Stearns and “Naked Short Selling” is Associate Professor at Dartmouth with a PhD. from the University of Chicago See the link below.
So you don’t like the SEC totals because they interfere with your game and so you just make up something like T-5 because it fits your argument. And you criticize my spelling of promter.
Let me ask you a question. Have you ever done a “naked short sale” or seen someone do a “naked short sale”. Have you ever spoken with a Options market maker who traded a lot of stock long and short.
I can tell you with 100% certainty that “naked short selling” did not crash Bear Stearns. And the ones who promote the idea are either deliberately misdirecting the genuine researches or they are useful idiots.
The amount of put buying, call selling and regular way shorts overwhelmed the number of “Naked Short Sales” perhaps 10 to 1.
Below is an article I wrote 10 days after the Bear Stearns crash and modified as new information came in.
20080303 073902108 BSC 352710 BEAR STEARNS COMPANIES INC 79.86
20080304 073902108 BSC 159568 BEAR STEARNS COMPANIES INC 77.32
20080305 073902108 BSC 149868 BEAR STEARNS COMPANIES INC 77.17
20080306 073902108 BSC 136992 BEAR STEARNS COMPANIES INC 75.80
20080307 073902108 BSC 16405 BEAR STEARNS COMPANIES INC 69.90
20080310 073902108 BSC 36297 BEAR STEARNS COMPANIES INC 70.08
20080311 073902108 BSC 149700 BEAR STEARNS COMPANIES INC 62.30
20080312 073902108 BSC 135647 BEAR STEARNS COMPANIES INC 62.97
20080313 073902108 BSC 19424 BEAR STEARNS COMPANIES INC 61.58
20080314 073902108 BSC 201768 BEAR STEARNS COMPANIES INC 57.00
20080317 073902108 BSC 1247876 BEAR STEARNS COMPANIES INC 30.85
20080318 073902108 BSC 749837 BEAR STEARNS COMPANIES INC 2.00
20080319 073902108 BSC 2120638 BEAR STEARNS COMPANIES INC 5.91
20080320 073902108 BSC 13789126 BEAR STEARNS COMPANIES INC 5.26
20080324 073902108 BSC 12588395 BEAR STEARNS COMPANIES INC 6.39
20080325 073902108 BSC 11736910 BEAR STEARNS COMPANIES INC 11.25
20080326 073902108 BSC 7673413 BEAR STEARNS COMPANIES INC 10.94
20080327 073902108 BSC 9340963 BEAR STEARNS COMPANIES INC 11.21
20080328 073902108 BSC 12396655 BEAR STEARNS COMPANIES INC 11.23
20080331 073902108 BSC 4677810 BEAR STEARNS COMPANIES INC 10.78
Dr. Decosta, did you see this?
p.s. look who gets honorable(dis) mention on page 51. Can you spell massive coverup??
When you click on the above link and then click on the “MD’s website” it goes to Deepcapture –
CVM is getting raided
Yes I have noticed it. The 2 highlights of Audit no. 450 are that of over 5,000 complaints received by the SEC in regards to abusive naked short selling crimes ZERO led to enforcement actions and of the over 900 calls for enforcement actions by FINRA ZERO had to do with abusive naked short selling crimes. As usual statistical aberrations have a story behind them once you peel away a few more layers of the onion.
Another noteworthy statistical aberration in the abusive naked short selling field was containedin the 2003 study by Evans, Geczy, Musto and Reed that revealed that less than one-eighth of 1% of even “MANDATED” buy-ins on Wall Street are ever done. This is important because the fear of being bought in by far and away serves as the primary deterrent to NSS crimes and once a party refuses to deliver that which it sold the buy-in is the ONLY remedy available to allow the purchaser of (nonexistent) securities to get what he paid for.
Over the years the management of the NSCC subdivision of the DTCC has secured a monopoly on 15 of the 16 sources of empowerment to execute buy-ins when their abusive “participants” absolutely refuse to deliver that which they sold. Yet to this very day they have the audacity to pretend to be “powerless” to execute a buy-in when their bosses that co-own the DTCC refuse to deliver that which they sold. Don’t we all wish we had employees empowered to forgive perhaps trillions of dollars worth of our debts. The meticulous design of this particular “fraud on the market” is beyond comprehension.
Noteworthy is that the “members” of FINRA the SRO that refuses to act like an SRO are the “participants”/co-owners of the DTCC which is also an SRO. These 2 SROs that refuse to act are still referred to by the SEC as “the first line of defense against market abuses” like abusive NSS. So the abusive “members” and “participants” of the “first line of defense against market abuses” like NSS as well as their hedge fund guests double as the beneficiaries of these thefts and the sheriff in charge of preventing these thefts. Fox guarding the hen house?
So where do the hedge funds fit in? The hedge funds direct $11 billion per year in the form of fees, commissions and “rental income” to the FINRA “members” and DTCC “participants” willing to break the most amount of laws on behalf of the financial interests of the hedge fund managers. The hedge funds are also the largest political donors to the coffers of the 2 congressional committees in charge of overseeing the SEC. It’s one gigantic circular system of “back scratches” driven by the fact that hedge funds account for over half of today’s trades.
Is the “fox guarding the hen house” cited above totally associated with corruption at the SEC and the SROs? Not totally.
1) Wall Street is extremely complex and there is a constant inflow of new platforms, strategies, algorithms, technological innovations, etc.
2)In an environment of extreme complexity the brightest and the most experienced will have an opportunity to leverage their brilliance and experience over the not so brilliant. Human beings like money and Wall Street has plenty to entice brilliant people willing to leverage their brilliance over us not so brilliant investors. I hate to admit it but Goldman Sacks might indeed attract the brightest of the brightest and they can afford to pay them accordingly due to this complexity and the amount of money out there to be fleeced from us not so brilliant ones.
3)The best and the brightest are not going to take a relatively low paying job at the SEC and put up with all of the governmental bureaucracy. Some at the SEC are indeed very smart and dedicated employees others use it as a launching pad to a better paying job on Wall Street.
4)The SEC is FORCED to work closely with these super brilliant guys on Wall Street bringing in all of these new trading innovations and platforms. Madoff was brilliant and the SEC was FORCED to trust him.
5)In a perfect world none of these new innovations like credit default swaps, etc. should have been approved for trading UNTIL the SEC got up to speed on how to monitor for abuses. Technological innovations have a way of not waiting for anybody especially if the U.S. wants to be perceived as the financial capital of the universe.
6) The trouble is that Wall Streetis a “zero sum” game and most of these technological innovations have been designed to leverage the financial interests of the brilliant ones that invented them over the rest of us. We relative dummies have been forced to trust the the SEC to provide “investor protection” despite the SEC’s clear history of having to REACT to already well-established frauds. By the time we figure out that things like credit default swaps are indeed analogous to “weapons of mass financial destruction” like Warren Buffet tried to warn us it’s too late and the financial losses of us dummies are incorporated into a gold plated bath tub on a yacht in the Hamptons.
7) The good news on the abusive naked short selling front is that we dummies are getting pretty well educated as to the modus operandi of these frauds and we have been blessed with the efforts of the Patrick Byrne’s of the world and the deepcapture.com investigative journalists. Their efforts are the only reason why there was an SEC “roundtable” a couple of weeks ago.
8) I highly recommend going to the SEC.gov website and watching the webcast of the first panel on Day #2. You’ll witness the complexity of Wall Street, the brilliance of some of its participants and the plight of the corporations like IBC that were forced to trust the SEC and the SROs to provide “investor protection” despite the fact that they were naturally a few steps behind on the learning curve for these frauds.
Here’s the link, wed. Sept. 30 panel 1
Diabetes drugmaker MNKD under short attack – complete with lying ‘journalists’. Watch it unfold in realtime:
This video look familiar to you guys?
The DTCC is the keeper of the worlds largest Ponzi scheme.
SEC Begging For Real Time CDS Pricing Terminal
Submitted by Tyler Durden on 10/07/2009 15:40 -0500
Bankruptcy Cash CDS Congress Credit Credit Default Swap Crisis Derivatives DTCC Enforcement Equities Financial Crisis Fraud House Financial Services Committee Insider Trading Lehman Brothers Manipulation Market Manipulation Markets Markit OTC REAL Risk SEC securities Strategy Swaps Testimony Trade Trading Trust
Securities Industries News discloses that the SEC has requested it be granted authority to have “direct access to real-time data” on CDS and other derivatives. One wonders how the SEC was operating up until this point without this information. Yet of course, this is merely just another pretext for the SEC to deflect allegations about its utter uselessness, with claims that “lack of such information hampered its efforts to investigate potential fraud and market manipulation in the over-the-counter (OTC) derivatives markets during last fall’s financial crisis.” Well, duh. The SEC is finally realizing that the credit market is, oh, about 10 times bigger than equities, and that virtually everyone trades CDS now over cash products. CDS is, incidentally, also where all the insider trading occurs these days, a fact abused all too well by CDS traders, who have known about the SEC’s inability to closely track the action in the credit market. This is also why if the SEC were to look at CDS buying action of LBOs names in 2006/2007 it may actually find some amusing results. In the meantime, the SEC should spend $10,000 a year and get a MarkIt subscription.
From Securities Industry
The SEC’s enforcement actions in investigating market manipulation in OTC derivatives “were seriously complicated by the lack of a mechanism for promptly obtaining critical information – who traded, how much, and when – that is complete and accurate,” said Henry Hu, the director of the SEC’s new division of risk, strategy and financial innovation, in written testimony to the House Financial Services Committee.
The SEC’s enforcement actions in investigating market manipulation in OTC derivatives “were seriously complicated by the lack of a mechanism for promptly obtaining critical information – who traded, how much, and when – that is complete and accurate,” said Henry Hu, the director of the SEC’s new division of risk, strategy and financial innovation, in written testimony to the House Financial Services Committee.
Hu testified that “data on securities-related OTC derivative transactions were not readily available, and needed to be reconstructed manually.” He asked Congress to expand the SEC’s inspection authority over trade data repositories and clearinghouses for derivatives.
The comments represented a rebuke to industry efforts aimed thus far at making more information on CDS and other OTC derivatives data more readily available.
Yet it is a little odd that the SEC and the DTCC, which is the core CDS trade repository, are so unable to exchange phone numbers. After all, the DTCC is an organization for the benefit of everyone, or so the tag line goes.
The main collector of information on CDS contracts has been the Depository Trust and Clearing Corporation (DTCC), which could be required to supply it in real-time to the SEC.
The DTCC collects data on swaps contracts and places in its Trade Information Warehouse (TIW). Last Nov. 4, DTCC began publishing weekly aggregate data for some of the contracts placed by dealers in the database.
The TIW is a service offering of DerivServ, DTCC’s confirmation and affirmation subsidiary, which is not regulated.
DTCC says its CDS data proved critical in calming the markets last year when Lehman Brothers declared bankruptcy. While market analysts estimated potential net liabilities on CDS on outstanding Lehman obligations could top $400 billion, DTCC released data from the warehouse showing the amount would be less than $6 billion. Ultimately, $5.2 billion was transferred among affected Lehman counterparties, DTCC said.
The good thing to come out of all this will be a public means to price CDS intraday, which, ironically, may have a rather adverse impact on firms like the above mentioned MarkIt, whose primary business is providing just that.
Madoff in fight.
Does anyone know what happened to the people that invested in the Refco IPO, just before it went bankrupt? Did they ever sue? If so, what showed up in the discovery?
SEC continues ass-kissing of hedgefunds:
Little reality check: am I perhaps barred from posting on DC?
I can’t post any more of my writings under the Oct 1, Mark M. Rolling Stone article. Did you guys perhaps close that topic? If so, let me know;-)
SEC fighting tooth and nail to assist those who either got more than they put in, or got out when the ‘gettin’ was good’ in the Stanford case:
Most peculiar way for them to spend their time, no?
More kudos for the SEC:
Hip Hip Hooray!
I can take you back with your story to the 1993 – 1995 period with the group first hand. Add in a little Bear Stearns / A. R. Baron theme and it makes even more sense.
What I can also tell you is that we took this information first hand to the SEC in 1994 and again in 1996. They finally contacted us in 1998 after the proverbial wolf had ransacked and fled the hen house.
Some things just never change. My best to you and all as always.
To all you advocates of the idea that “naked short selling” caused the collapse of Bear Stearns and Lehman Bros, I will say this. The explanation is simple although complex to the outsider.
I will defer to the future the explanation as I enjoy watching you guys make yourself look silly trying to explain something that has no basis in reality.
The truth is that illegal inside traders dominate the securities markets. They make billions on major moves in stocks up or down, because that is how they make their money. They need those major moves and create them. They go short before the collapse and long before the tender offer. The game is rigged by a collusion of many company executives, their investment banker pals and even officials of the Federal Reserve.
But they try to disguise their game, and create distractions like the “naked Short sellers”.
Sorry, just doesn’t ring true.
Read some Taibbi and come back when the NUMBER OF NAKED SHORTS on those entities sink in.
Who are you defending/representing?
Dear Mr. Hall:
Taibbi’s article is nothing more than a paraphrase of my article on Bear Stearns and my interview with him. He also includes ideas from Gary Matsumoto’s article who collaborated with me and my friend Ray Wollney. The 1.7 million purchase of puts was given to Matsumoto by Ray Wollney.
Tabbi incorporates ideas promoted by Patrick Byrne of Overstock who is the charming promoter of “naked short selling” as causing the demise of BS and LEH.
How was Patrick able to get the Attorney General of California to submit an amicus curiae brief in his California litigation?
Taibbi offers nothing new and is able to bullshit a lot of followers. But he and Byrne can not bullshit a few people who know the score.
Ray Wollney and I have just decided to write a book on the real cause of the collapse of Bear Stearns and Lehman. I will keep you posted on our progress.
There’s no reason to doubt Mr. Olagues’ sincerity or intentions. I’ve heard from a number of people that he’s a consumate professional and among the most knowledgeable when it comes to options. That he’s in disagreement with on a few points is fine. I’m certain we all have much more in common with him than not.
Sounds like much more than ‘a few points’ worth of differences, Judd, but that’s fine.
You guys refer to the very large fails to deliver as evidence of naked short sales three days earlier. Then you conclude that therefore the naked short sales caused the collapses of Bear and Lehman.
However in BS we see that the largest fails were on March 20, making the very large naked short sales on March 17, 2008 The increase was about 11 million. So if the 11 million short sales were done on March 17 when the stock was trading between 3 and 4, apparent those naked short sellers did not fare too well because two weeks later the stock was 10.
And no one can claim that the naked short sales on Friday March 17, 2008 caused the stock to drop on March 14 or earlier.
In Lehman the largest naked short sales were done when the stock was below 1. and as low as 10 cents. certainly those sales did not cause the collapse from 60.00.
The question becomes what was those enormous fails related to. The answer is that they were related to naked short sale indeed.
But those naked short sales were done by options market makers using a strategy that I first created in 1983 when I was an options market maker on the CBOE, who held the largest positions and did the most volume.
That strategy was in use last year by the largest options market making firms creating “naked short sales” in BS and LEH legally through their exemption.
Tune in for more of the story.
This link was posted at thesanitycheck on the blog. This guy explains everything.. http://www.aunetwork.tv/files/audio/114_Collective_Consciousness_8_13_09.m3u
Your old buddy Gary Weiss is quoted in this PR campaign saying that Taibbi is a victim of a hoax and a Penson letter to the SEC claiming that the Taibbi video false, that there was “no locate at the time of the video”
Advanced Trading has a story by Kerry Masaro dated Oct 7.
covering a Business Insider story by Matt Carney.
To the distant reader that seems to be a very fast retort, is it possible that some enemy of exposing naked short selling set up Taibbi to discredit the exposure of same?
The impression I have from Deepcapture is that massive amounts of naked short shares fail even to reach failure to deliver but are dealt with by DTCC.
Energy Source Inc. Announces New Action for Investors
Tue Oct 6, 2009 7:16pm EDT
LONDON, Oct. 6, 2009 (GLOBE NEWSWIRE) — Over the last four years the company
(Other OTC:BCIT) has made every effort for the resumption of trading of its
stock by complying with all requests made to it by all pertinent agencies. It
has done this at great expense and effort but as it has complied; it has found
its efforts to be unfairly obstructed. Even with the findings of various
government agencies showing Energy Source to be innocent of any wrong doing one
private organization continues to block the rights of the company, the
Depository Trust & Clearing Corporation (DTCC).
The DTCC its officials and lawyers lead the company to understand that on the
completion of all the normal regulatory requirements it would clear its stock
for normal trading. This position was reached by mid 2007 after an exhaustive
and costly process. The DTCC despite the company being fully filed, having
possession of an 15c211 as required by FINRA, consent from NASDAQ to trade the
DTCC refused to clear the company’s shares unless the company supplied
sufficient shares to the DTCC to cover the counterfeit shares it had allowed to
enter the market by its gross negligence as well as supporting a tide of naked
short selling by its client owners and brokers. The company out of disgust and
frustration, had stopped their corporate filings and contemplated what else they
could possibly do after spending over $800,000 to that point. The company had
complied with all requests, was accused of no wrong doings, yet was not
permitted the rights it deserves, to do business.
Energy Source would like to announce that it is, once again, becoming fully
compliant in all corporate matters. Empire Stock Transfer Inc. continues to act
as the company’s stock transfer agent, and the company will update its filings
shortly. Any and all other corporate matters found to be delinquent will be
addressed and remedied as well.
The company is resolved on behalf of its shareholders and those others who have
fallen victim to the ongoing fraud perpetrated in the marketplace to continue in
business despite the failure of regulatory agencies to protect the most basic
rights of the capital of the company, and the rights of its investors, which has
now created a climate of distrust and frustration that needs to be addressed.
The company, after talking with the main investigator of Senator Grassley’s
office, who has intervened as a moderator for all concerned, feels that it is
time to make this effort. Without the effort put forth by Senator Grassley’s
office and the determination of certain shareholders, who only ever wanted what
they paid for – their shares, the company would have had to consider other
It is unfortunate that a private monopoly like the Depository Trust & Clearing
Corporation and its financial institutional owners, exercises decisive influence
over such government agencies such as the SEC and can dictate policy with
impunity to the market place to the extent that the owners of a public company
are no longer in control of their own capital structure and there is no redress
for outright fraud perpetrated by brokers on the company’s shareholders. Energy
Source is most thankful for Senator Grassley’s office demonstrating integrity
and concern by stepping in and attempting to moderate in this situation where
investors have been fleeced by their brokers and the DTCC.
Additionally the company announces retaining the services of Kellogg, Huber,
Hansen, Todd, Evans & Figel, P.L.L.C. to assist it with future legal
proceedings. An independent effort by our shareholders to help with these
expenses has been initiated and the company supports and welcomes their efforts.
Thomas Megas CEO Energy Source Inc.
CONTACT: Energy Source, Inc.
I wish you luck and the teeth of a pit bull.
Surely debasing a currency as per Matts Island story would not send prices down __ it would cause currency debasement…meaning the Bread would not really go down from $1 to 1cents.
I believe that Matt was trying to demonstrate is how 99% of value in the (asset) could be lost on paper through debasement.
Matts example will draw critisism because its fundamentally incorrect.
Currency debasement and Equity debasement are certainly both ‘watering down’ processes through counterfeit.
Except that currency debasement has an intial wonderful wealth euphoria while the streets are awash with easy credit and cash
__ its only when the fulcrum is met that hyperinflation of the debased currency is actually experienced.
Equity debasement is different insomuch as there is no initial surge of wealth felt by the participants.
The counterfeit fail to deliver /FTR, requires constant moving, maintaining, parking, re parking, re re parking, etc etc …..
An intimate look at some blotters might reveal lots of on and off balance sheet parking games
Imagine you travel to a small foreign island on vacation. Instead of going to an exchange office in your hotel to turn your dollars into Island Rubles, the country instead gives you a small printing press and makes you a deal: Print as many Island Rubles as you like, then on the way out of the country you can settle your account. So you take your printing press, print out gigantic quantities of Rubles and start buying goods and services. Before long, the cash you’ve churned out floods the market, and the currency’s value plummets. Do this long enough and you’ll crack the currency entirely; the loaf of bread that cost the equivalent of one American dollar the day you arrived now costs less than a cent.
What’s truly sad is that the man that predicted everything in detail and who uncovered these bankings scams, Mike Stathis, remains banned by the media. Instead, you have reporters like Matt Taibbi and others who try to play superhero only for their own fame. Taibbi has no real expertise in investments and is only deflating any allegations that have been previously made by experts like Stathis.
If Taibbi really wants to expose things, why has he not consulted with Stathis or any other expert who has been exposing the fraud (although I think Stathis is the only one I have seen). Think about that and then you will understand Taibbi’s motives.
Why hasn’t anyone from the media even discussed Stathis’ SEC complaint about Washington Mutual???
Stathis reported just days after the Bank of America Merrill Lynch deal that it was set up by the Federal Reserve and Treasury, while no one else had a clue.
To this day, no one from the media has come to him to ask him anything even though he clear has the leading insights on this economic meltdown.
What is even more amusing to me is the fact that the SEC sits on their ass’s while companies, shareholders and investors are scalped by unscrupulous so called Wall Street firms/Money Managers. These firms and the players that manage them are to big to be busted, they wield so much influence over our government that it is only the little guy that gets wiped out. I am a CEO of a formerly public company and I have seen first hand that shareholders get the shaft. I have reported several incidents of shorting of my own company stock to the SEC, I have encouraged my Shareholders to the same…They don’t listen and they don’t care!!
What’s truly sad is this Mike Starboard character keeps posting in multiple threads under different names begging for attention and claiming he has this great track record when he is a no name who is jealous of Peter Schiff and others who own this pathetic man.
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