The Wall Street Journal ran a piece today that reports on the SEC and Naked Shorts.
You can view the article here.
Of note is that they seem to get much of it right, for once. No snarky apologist pap, no "it's all in their heads" or 'lilGW absurdities a la "there is no problem."
It carefully describes that an increasing number of folks are suing Wall Street's royalty over the practice, and highlights the SEC's renewed interest in apparently clamping down on it.
I suppose that this is progress, of a sort.
One thing they goofed on is the NFI suit - that action targets ALL the prime brokers, not just Lehman. And it also targets the specialist.
Meanwhile, Merrill Lynch posted record revenue of $8.16 billion in the second quarter, and profit rose 44%, despite the shaky performance of the markets during that period. Now, I'm just guessing here, but could it be that the margin on non-existent shares is pretty high? No cost of goods sold. No inventory. Just pure profit from the trading desk, the loan desk, and the hedge funds who are paying for this specious borrow.
Nah. They'd never do that. I mean, if we can see it, why can't the SEC?
Doh. Over the weekend, a blurb came out indicating that ex-SEC attorney Gary Aguirre is suing the SEC for access to the documents he claims proves his contentions of cover-up and collusion at that august body. Now, ya gotta wonder why a guy would sue the SEC for the docs they claim show nothing other than that he is a disgruntled malcontent they had to let go for...er...well, being malcontented and whatnot.
Does that seem like the action of a guy making it all up?
Here's my take: I think the SEC got caught red-handed in a whitewash on behalf of powerful Wall Street players. I think that Gary has the knowledge and the goods to demonstrate conclusively that they did. I think that the lawsuits against the prime brokers justifiably scare the crap out of the CEOs of those firms, as they know full well how the money is being generated. I think the SEC is belatedly trying to appear to be doing something, thus is humoring Cox, who too late has discovered that his agency is riddled with cancer.
And then, we have the Chris Byrons of the world insisting that NSS is a non-issue. I will be here to remind Chris, and 'lilGW, and Eisinger, and Carol, and Alpert, and all the rest, of their complete, laughable participation in the Wall Street cover-up when this blows wide open and proves to be the scandal of our lifetime - presuming that any of them have careers left at that point.
If you are going to take the professional position that there is no Watergate scandal, methinks you better be correct, or start looking for a job editing STD pamphlets.
Speaking of which, the NY Times is cutting a huge number of jobs.
Apparently an increasing percentage of the population gets their news from the internet, and doesn't read the papers anymore.
Could that be because the mainstream press is widely viewed as a bunch of lying, co-opted henchmen for special interests and the administration? Huh. Who knew that you couldn't misrepresent and spin and misstate for years, and retain your customer base?
What happens when the STD brochures go virtual?
"Would you like fries with that?"