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New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 4/24/2006 4:00 AM

The newest Alan Newman's Crosscurrents is out, and it contains a great summary of the current situation in the market, where the system has run amuck.

You can read it here.

What makes this noteworthy is that Alan is one of the more skeptical and level-headed commentators out there.

And yet he gets it. Actually, anyone with a brain would get it. It isn't that hard.

That the NY financial press have been silent on the NFI revelation, and the hard data that the NFI 2004 and 2005-2006 FOIA data represents, is stunning, in the sense that nobody could argue that having 40+% of a stock's daily trading fail is good, or right, or a system working fairly, and yet we now have proof of exactly that.

What do you say to that sort of blanket cover-up? What can you?

The refusal to admit the obvious is perhaps the single most disturbing aspect of this whole episode.

Cover-up time. Move along. Forget about the numbers and what they mean. All is well. Keep putting your money in the market...
Copyright ©2006 Bob O'Brien
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Comments (17)
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By yoda on 4/24/2006 9:15 AM
Great article, thanks for finding it. I hope that justice will be swift for the crooks.
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By edwardb_3 on 4/24/2006 9:46 AM
The crooks are doing no more than the SEC is allowing them to. It's the SEC Commissioners who allow it and bought-and-paid-for Legislators permitting that who should go to jail.
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By robelita on 4/24/2006 9:52 AM
You're right edward-the SEC and our congress-monsters have aided and abetted in the swindling of America. We need to clean "house"!
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By EnronBlamesShortsellers on 4/24/2006 10:07 AM
Lay Blames Fastow, Short Sellers, for Enron Collapse (Update2)


April 24 (Bloomberg) -- Former Enron Corp. Chairman Kenneth Lay denied committing the fraud that destroyed his company, blaming a thieving subordinate, short sellers and journalists.

Lay took the witness stand today in his own defense as his federal fraud trial entered its 13th week in Houston. The 64-year- old Enron founder testified his biggest mistake was hiring former Chief Financial Officer Andrew Fastow, who pleaded guilty to fraud charges and faces 10 years in prison.

``It was what Andy did and hid and what the Wall Street Journal with the help of short sellers wrote that kicked off a run on the bank that we just couldn't stop,'' Lay said. ``I accept full responsibility for everything that happened at Enron. Having said that, I can't take responsibility for illegal acts that I had no knowledge of.''

Lay and former Chief Executive Officer Jeffrey Skilling, 52, are accused of conspiring to defraud investors in Enron, once the seventh-largest U.S. company by sales. Skilling also is accused of insider trading and faces 25 years in prison.

``This is the performance of his life,'' said Brian Wice, a Houston criminal appeals lawyer, referring to Lay. ``If he does not hit his mark on the first take and get the jury to look past what they saw in the first half of the trial, he is going to spend the rest of his life as a ward of the federal government.''

Liar and Thief

Lay called Fastow, 44, accused of stealing $25 million from Enron through off-the-books entities, a liar and a thief.

``I think it all begins with the deceit of Andy Fastow and probably not more than one or two other people,'' Lay testified. ``A person at the very heart of our organization, the chief financial officer, was basically stealing from the company. And stealing before there ever became something called LJM or Raptors.''

Lay also said stock traders who bet on the decline of a security, known as short sellers, conspired to bring down Enron.

In January 2001 short sellers got together in a ``bears in hibernation meeting'' to decide what company they would target for the year, Lay said. ``And Enron was the target.''

Finally, he said Enron was targeted by two Wall Street Journal reporters who were being fed documents about Fastow's activities and decided to go after Enron. He didn't name the reporters. Two Journal reporters covering Enron at the time were Rebecca Smith and John Emshwiller. Spokeswoman Jennifer Dauble of Dow Jones & Co., owner of the Wall Street Journal, didn't have an immediate comment.

These three elements combined with a declining economy, the terrorist attacks of Sept. 11, 2001, and the bursting of the technology-stock bubble, caused Enron's collapse, Lay said. He said he achieved the American dream in reaching the top of Enron.

Nightmare

``I also experienced the American nightmare,'' he said.

Defense attorney Mac Secrest's first question to Lay was how he felt sitting in the defendant's chair for 13 weeks.

``It's been very interesting,'' Lay said. ``We've seen a lot of interesting testimony, a lot of interesting people, a lot of allegations, a lot of lies, a lot of misinformation and some truth.''

Enron's market value reached $68 billion before its bankruptcy wiped out thousands of jobs and at least $1 billion in retirement funds. Investors suing over the company's collapse claim accounting fraud led to at least $25 billion in losses.

Lay is testifying without the guidance of his lead lawyer, Michael Ramsey, a noted Houston criminal defense attorney. Ramsey, 66, had heart surgery on March 24 to clear a blocked artery and has not been available to represent Lay. Secrest, a Houston criminal appellate specialist, is conducting Lay's direct examination.

Image Transformed

Wice, the Houston attorney, observed Lay as a public figure for more than a decade and said his image has transformed.

``Among his peers, he is central casting's grandfather figure,'' Wice said. ``But to the everyday man on the street, he's a freaking weasel who essentially used Enron as an ATM.''

Skilling testified for eight days ending April 20. His cross-examination by U.S. prosecutor Sean Berkowitz was often combative. He asserted that Berkowitz didn't grasp how Enron worked and that a market panic, not fraud or business failures, doomed Enron.

Berkowitz leads the Justice Department's Enron Task Force, which has secured guilty pleas from 16 company executives. The government alleges that Lay and Skilling used off-the-books entitles created by Fastow and known under such names as Raptors or LJM to hide Enron losses from auditors and investors.

The case is U.S. v. Skilling, 04-cr-25, U.S. District Court, Southern District of Texas (Houston).



To contact the reporters on this story:
Thom Weidlich in Houston at tweidlich@bloomberg.net
Laurel Brubaker Calkins in Houston at (1) laurel@calkins.us.com.

Last Updated: April 24, 2006 12:22 EDT
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By mhatmccane on 4/24/2006 10:52 AM
I just realized what the hedge funds lawsuit was all about; they are paying PIL to the brokers for non existent shares that have been Grandfathered by the SEC. The borrowing costs are bad enough but the PIL has really got to hurt. And, NFI's recent DRIP offer just may be starting a "squeeze".
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By hoagx on 4/24/2006 12:26 PM
wish i could do more! i put the word out EVERYDAY! i write the SEC. 3 times a week!
one of these days, maybe will have these crooks by the balls!
KEEP UP THE GREAT WORK AND THANKS!
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By InTheKnow on 4/24/2006 2:28 PM
I think you give the NY financial press too much credit Bobo. We should check their financial credentials to see their qualifications.

All in my opinion...
1. They don't understand short selling
2. They don't understand naked shorting.
3. The don't comprehend the difference.
4. The don't write about it because they don't understand it.
5. The only repeat what they heard from the person they think knows what it's all about.
6. So the one person who knows or thinks he knows is the leader of the pack.
7. It's basically the blind leading the blind.
8. So much for the NY financial press.
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By virakiller on 4/24/2006 3:23 PM
in the know you got it right brother they dont understand AT ALL and just listen to what the hedge funds tell them to write
THE PRESS IS PATHETIC ON THIS ISSUE THAT CRIPPLES AMERICA-TO SAY THE LEAST
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By rtway1 on 4/24/2006 5:46 PM
One person who name has been omitted and should be thrown under the bus is Sen. Shelby. He had the power to do something about all this and took the cowards way out, along with Bennet.Our government is just as guilty as the crooked hedge funds because they took their dollars for their campaigns.
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By Sean on 4/24/2006 7:43 PM
Bobo, so now that we know that you , Patchie, Dr. Byrne, Mark, Dr. DeCosta and Bud Burrell are not "CRAZY" and that other people are being ripped off by the Prime Brokerages or Major financial Institutions would it be safe to say that something will be done about this ISSUE. I mean come on, really rich people are now being affected by not making as much money as they could if they were being treated fairly by these brokers. Since our goverment can care less about us little guys maybe they will listen to the cries of the RICH!!! I cannot believe after all thismedia acknowledgement and these 2 lawsuits that these brazen arrongant thieves won't even try to buy in some of these companies that the have shorted illegally. There is not even a remote attempt. I hope they are all stipped of their riches and then put in jail for a very long time!!! Allan Newmann's article was first rate and thank you for it.
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By rtway1 on 4/24/2006 9:01 PM
Sean, your thinking has a certain amount of logic however some things are missing.When these alledged rich people entered into their agreement with the hedge funds they knew directly or indirectly how these manuevers, such as derivatives , options , short selling and use of commodities or currency from other countries was part of the mix. The question, and it is the BIG one were they aware that they were creating countrfeit shares or electronic book entries instead of playing by the laws written back in the 1930,s. were the game plan to guarantee a huge rate of return at the expense of the populace , who knew no better. If in fact they had knowledge that this was a planned scheme to defraud, then all bets are off as to where this market goes. There certainly are a lot of un unanswered questions or no body to report them, rather odd, RIGHT.











right.
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By robelita on 4/24/2006 10:13 PM
The predatory practice of NSS is being used by greedy bastages without conscience and-I fear-our enemies abroad. What better way to strike the "infidels" than to steal their money then use it to finance terrorist attacks against us. I believe now that the government must be put into the position that this is no longer a just a securities issue but an issue of national defense. It is also an issue of potential economic collapse if this pracitce isn't reigned in ASAP. It's time Washington woke up and realize that there is a crisis in our markets and that continuing with the status quo is NOT an option. It's time the American people and government had their own sanity check.
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By robelita jump a little lighter on 4/25/2006 3:04 AM
robelita, where's the beef, hun? Lots of "hell yeahs!" everyday. Get specific!
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By NY Financial Press is Irrelevant on 4/25/2006 3:06 AM
Folks, stop trying to please and convince the Wall Street financial press. Ain't gonna happen. The victory will take place in court first, the morons and shills on the airwaves and in your morning paper won't change their tune until the judges call the tunes.
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By InTheKnow on 4/25/2006 3:29 AM
Full house today:
http://www.co.marin.ca.us/depts/MC/courtcal/casenoq.cfm?sel_prefix=&sel_caseno=CIV053693
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By bbhindyou on 4/25/2006 5:09 AM
Money is the most powerful drug there is.Politicians on money can't think straight if it means a end to their supply of money the politicians WILL sell you ,me,america,and their firstborn child down the river to keep the money flowing.They are ADDICTED to it and they can't function without it.It's all our fault.When we as a people stop voting for the best P.R. machine [those machines run on big money you know] and start voting for the best person then we will get results.FAT CHANCE of that happening.
Re: New Crosscurrents Yet Another Erudite and Succinct Commentary - On NFI and NSS By robelita on 4/25/2006 10:44 AM
bobo's alias,

I have repeatedly called for a solutions at the polls this November-there's the beef baby.

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