I've gotten reliable confirmation that the 60 Minutes segment airing on Sunday night is a showstopper - unless it gets sabotaged between today and Sunday.
The topic is, of course, uber-powerful hedge funds and the lengths they will go to in order to create windfall profits.
You can see the snippet discussing the segment here.
It could well be the blow that knocks down the door on the abuses by certain hedge funds believed to be part of a large, Drexel-like web of stock manipulators, who use naked short selling, bogus research, class action litigation, internet smears, captive press hatchet jobs, and a host of other illegal and underhanded tactics to transfer wealth from Main Street investors, to the hedge funds' bloated pockets.
My stated suspicion is that these parasites work in conjunction with their prime brokers, who are in on it and facilitate the illegalities, believing that the crimes are so sophisticated that the rubes at the SEC and DOJ will never be able to appreciate, nor prosecute them. So far that has been a good bet.
But 60 Minutes is the stuff of Congressional hearings, and widespread coverage, and follow-on investigations. So it would appear that the cat is definitely out of the bag here. We shall see when the program runs.
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Bawag, the Austrian bank intertwined with Refco's shenanigans, told the world that they had been using Caribbean accounts to hide massive bogus bonds issued to mask the reality of a bank on the brink of crisis.
It is hard to know if this is the extent of the larceny, as they have been so connected with the misbehavior at Refco, whose name was synonymous with naked short selling in many circles. Remember my speculations that this problem is large enough to crater major financial institutions and the like? Consider this revelation from Bloomberg:
“March 24 (Bloomberg) -- Austria's Bawag PSK Bank used offshore companies and accounts at Refco Inc. to mask almost 1 billion euros ($1.2 billion) of losses from bond and currency investments that put the bank at risk of insolvency in 2000, bank officials said.
Bawag shifted the losses to companies including six firms on the Caribbean island of Anguilla, and wrote them down over time, Chief Executive Officer Ewald Nowotny said at a press conference in Vienna today. The bank may sue Wolfgang Flottl, a hedge fund manager, in connection with the failed investments, he said.
``We had considerable losses of close to 1 billion euros,'' said Nowotny, who took over as CEO of Vienna-based Bawag in January after his predecessor Johann Zwettler resigned. The majority of the losses occurred in 2000, Nowotny said.
The revelation of Bawag's hidden losses may have ripple effects across the Atlantic in the bankruptcy case of U.S. futures broker Refco Inc. U.S. prosecutors investigating Refco's collapse have found evidence that Refco maintained accounts for Bawag that held its offshore investments, people with direct knowledge of the probe said March 15.
Nowotny confirmed that these accounts existed. He said he didn't know whether former Refco CEO Phillip Bennett had a role in the offshore companies.“
Yeah, I’ll just bet they don’t know what role Bennett played, nor what role naked short selling played. Maybe if everyone just keeps pretending that this is not an isolated case of larceny, but rather the true lay of the land for quite a few players, then the system can hang together, and everyone can continue to make deci-billion dollar bonuses in a flat market with declining commission revenues and a lackluster investment banking business. Quite a perpetual motion machine, huh? Wonder where all the money is coming from?
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Jim Cramer is pissy over a study showing that if you buy the stocks he touts on his show, when he touts them, that you will lose money. Apparently when he says “I want you to own this” or “Buy this now” what he really is trying to say is “Don’t do what I am telling you to do.”
That is always amusing. Read his rambling argument for turning to Animal Planet whenever you see his face on the screen. I would link his rambling argument for why you will lose your ass if you buy his picks when he announces them on his show, but the link requires that you sigh up for a trial period, which I can't encourage anyone to do.
So apparently Koko has better stock picking skills than Cramer - but it isn't his fault, rather it is everyone else's. As usual. I would write Bull across his latest column, but ran out of red pen.
Still, the Koko angle is compelling...
Koko love apples, and Koko love Kitty.
Koko think stock market fun.
Koko like hitting buttons with funny sound effects. Boom. Pow.
Koko like fun. And Koko love Kitty.
Koko think everyone should sell OSTK due to contrived cash-flow concerns, and buy Rocker long Powerwave.
Boom. Pow. Boooyah.
Koko sorry you lose retirement doing that. So sorry.
Boom. Pow.
Koko entertainer. Not stock analyst. Not financial journalist. Until subpoenas show up, the Koko definitely financial journalist or something it is bad to subpoena.
See Koko dissemble and prevaricate. Boom. Pow.
But Koko still love Kitty.
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I’ve been noticing that the comments on the blog are becoming increasingly off-point to whatever the topic du jour is. I will ask again that comments be restricted to on-point relevant commentary. Saying “XYZ has been naked shorted” when we are discussing Bawag or 60 minutes does no good, and is a distraction. Publishing a host of links to something completely tangential also does no good for anyone. Let’s try to keep the discourse to the topic, and limit the dross. If you want to discuss how you believe your company has been naked shorted, or why the banking system is the root of all evil, please do so in the forums section, where there is ample bandwidth to start a thread and rail to one’s heart’s content. But the contiguous stream of blog commentary is the wrong place for it. Appreciate the observation of the blog etiquette…