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All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 6/23/2006 4:04 AM

UPDATE: The WSJ just broke the story that the SEC's limp-wristed registration requirement couldn't stand. Big deal, I say, as no crook with three working brain cells would register anyway...too many loopholes...but this is a nice indicator of the SEC's overall competence in crafting a rule that would stand up to challenge. Wanna bet the Grandfathering would be ruled unconstitutional in a heart beat? Ladies and gentlemen at the SEC, you gotta know that will be coming at you soon, so don't act shocked when the whole house of cards comes tumbling down...

----------------

This came out in the NY Times today. Speaks to the integrity of the fine folks over at the SEC, and all the hard work they have done to protect investors from predatory, powerful special interests operating in the markets with impunity:

http://www.nytimes.com/2006/06/23/business/23fund.html

So, let me see if I have this right. You work at the SEC. Your job is to stop miscreants from stealing the retirement wealth of the nation, and to bring them to justice. You have the temerity to demand to speak to a rich, powerful, politically connected guy key in all of it, and you find yourself out of a job.

Nice.

Wow. So, yesterday we have the revelation that OSTK's fails mushroomed to 25% of the float while Reg SHO was "working", and now we see that the SEC's top brass can't fire guys who are asking embarrassing questions of Wall Street royalty quickly enough.

Is it just me, or is this whole thing not only coming apart, but seeming to stink to high heavens the more we hear?

I really, really can't wait to see the Senate hearing next week, and further can't wait to see discovery in the NFI case.

Oh, and here is a snippet from the Financial Times, about prime brokers trying to dump their liability to large hedge funds, now that it is becoming obvious that the debt is a cancer ready to metastasize.

"Another data-point on tightening hedge fund credit

In recent weeks, an investment bank has reportedly been trying to sell several billion dollars worth of the loans it has extended to hedge funds. The idea behind this putative sale, which seems to be the first of its kind, is that the risk in this lending would move from the prime broker to a wider investor pool. And the members of that pool would include more, er, hedge funds.

Not to mention investment banks, bank banks, insurance companies and various other insatiable consumers of potentially excitable but largely inscrutable securities.

You sort of read it here first. And in somewhat more detail in my column in the Jun. 5 edition of MAR/Hedge. And NakedShorts just can’t wait to hear how Timothy Geithner, president of the Federal Reserve Bank of New York and chief evangelist of the Church of Keeping Up With Exotic Paperwork, feels about having tunnzmore of the stuff floating about the hedgefundosphere and its immediate environs."

For the full article, click the link below - sorry, but you have to be a subscriber to read the full article...

Prime brokers selling hedge fund exposure marks watershed
by Gillian Tett
The Financial Times Jun. 23 2006
Copyright © 2006 Bob O'Brien
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Comments (13)
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... By rtway1 on 6/23/2006 7:38 AM
When ever one of these multi-multi millionaire scum bags gets accused of theft, the press first points out that this pillar of the community is a philanthopist. No, if he is guilty of what they say he is a theif and the money he gives away is not his, period. There is no lower form of life than a theif that compounds his crime by leveraging stolen money into campaign contributions, charity that yeilds him good P.R. and giving jobs to the people that are supposed to polcing your dirty ass ways. And in the end when the dust settles it is the public that pays for all this good will and illicit contributions. Philanthropist my ass, call it as it is, a morally corrupt theif that is a misery peddler to the public.
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By browntrout on 6/23/2006 7:52 AM
Reading the article on the SEC investigation of Pequot one should take note of what precipitated the commencement of an investigation: "But a lawyer who once led the agency's investigation has told Congress that the fund's trading had repeatedly aroused suspicion among stock exchange officials, prompting them on 18 occasions to refer cases to the S.E.C. for further investigation, records show.

That's right. The same people who refuse to do anything to protect investors. They probably "were suspicious" bcause the specialist or market maker started crying that they lost some money being on the other side of the trade. Happens all of the time. It is OK for them to steal your money but they don't like when someone returns the favor and steals theirs. Heads I win, tails you lose! Wall Street at it's finest!
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By anon on 6/23/2006 7:54 AM
http://www.nytimes.com/2006/06/23/business/23fed.html
see full article

Atlanta Fed President to Retire After 42 Years With the Bank

By REUTERS
Published: June 23, 2006

"WASHINGTON, June 22 (Reuters) — The president of the Federal Reserve Bank of Atlanta, Jack Guynn, said Thursday that he would retire on Oct. 1 after 42 years at the bank and 10 years at its helm."
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By anon on 6/23/2006 7:57 AM
http://news.bbc.co.uk/1/hi/business/5101620.stm

Financial watchdog to face review
The FSA has been accused of being heavy-handed with its regulation
The effectiveness of the UK's financial watchdog, the Financial Services Authority (FSA), is to be reviewed by the National Audit Office (NAO).

The NAO will look at the FSA's cost effectiveness, management and its role in fighting financial crime.

Some politicians and consumer groups have said the FSA is too bureaucratic and slow to protect consumers.

But a Treasury spokesman said the review had been "long planned", rather than a response to criticism."
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By Patchie on 6/23/2006 8:40 AM
You know, after reading the Times article this morning it finally dawned on me...it is not that the SEC is corrupt or that Hedge Funds get special privaledge it is that we are misreading the SEC's mission statement.

According to the SEC website:

The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

The problem is we are not investors, we are the test animals used to evaluate the markets abuse schemes similar to the test animals used to validate new medicines.

I have written teh staff at the SEC and requested that they update this mission statement to include a clear definition of the pre-requisite net worth required to qualify as an investor. If they do that for us they could save themselves a lot of hate mail from test animals that do not qualify and therefore have no standing to complain.

Anybody want to place bets on the net worth pre-requisite?
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By bobo on 6/23/2006 8:49 AM
The SEC's charter was to "restore faith in the markets" following the crashes of 1929 and 1932. It was never to ensure that investors don't get screwed. It has always been about creating a patina of respectability so that the investors would continue to pour money into the markets - and you have to have faith to do so. They are a PR firm for Wall Street, best as I can tell - the perfect government "we're doing something" agency that actually fails to do anything. It isn't their fault, really, we are just misunderstanding their role. They can't even draft a simple registration and reporting requirement for hedge funds that will withstand a legal challenge - and these are the guys that are supposed to go up against the best Harvard and Wharton and Yale ever cranked out? Puhleese.
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By clearthinker on 6/23/2006 9:07 AM
Hey all you have to do is listen to Jim Cramer's Mad Money show.....you should have heard the piece about Allstate....

"I love them because they are going to sell insurance to people who never file claims"
They have cancelled earthquake and flood insurance recently...

yes...."you're in good hands"..........
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By Patchie on 6/23/2006 9:13 AM
I heard former Chairman Harvey Pitt was on CNBC and stated that the termination is a concern but that he doubts political pressure interfered with the case or that the commission staff were involved.

Pitt said, “I would be shocked if there were anything of that nature.” He added: “It’s very hard to have political influence on an SEC enforcement investigation.”

I guess the former Chairmans memory is as elusive as his ability to manage the markets. It was only recently that the SEC's investigation into financial journalists was squashed over political pressures. Those subpoenas were also mothballed with teh only difference being - the SEC didn't fire that lawyer.
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By ginger on 6/23/2006 10:09 AM
Is the UPDATE posted anywhere other than the site given by Bobo?

I'm not a subscriber to the online WSJ and don't plan to become one.

I get this.... " The Page You Requested Is Available Only to Subscribers ..."
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By jcline on 6/23/2006 10:25 AM
OK.. so they sent it back for review... maybe now they can actually make it right! Ohhh wait........ dumb dumb dumb... that cannot be possible can it.
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By ckza on 6/23/2006 11:58 AM


> 100mm.

You know that 5-10mm is chump change in today's world, while they are trying to "legislate" estate tax exemptions at those thresholds in 2011.

That's their version of, "let them eat depreciated dollars which we haven't usurped from them yet."

Where has the middle class gone? What has happened to the virtues of working hard and saving for the future?

They stole it from us through their minting and printing machines.

What's 5 or 10mm today? Unfortunately, without a deflationary spiral, it will not be considered much.

The Global Elitists are in charge. imo
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By daven on 6/23/2006 12:32 PM
Repeat post as this is a must read:

http://www.bloomberg.com/apps/news?pid=10000102&sid=aRLcewmcKg6s&refer=uk

Bawag also jeopardized the deposits of 1.3 million school teachers, mechanics and other workers across Austria by funneling undisclosed loans to Refco and becoming entangled in Yasser Arafat's casino.

Since Refco's collapse, the disclosure of Bawag's dealings with the brokerage has triggered a wave of withdrawals from the bank. Austrian Chancellor Wolfgang Schuessel opened a savings account at Bawag in May in a show of support aimed at preventing a run on the bank.
Re: All Pigs Are Created Equal...But Some Are More Equal Than Others.... UPDATE RE: Hedge Fund Registration By kazm on 6/23/2006 12:56 PM
"Many people on the Internet refer to the mainstream media as "The Powers That Be", but they are not powerful. They should be described as Criminals On The Loose ."

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