--------------------------
Sign the Market Reform Petition now. Click here to view it.
-----------------------
If you can, go to the upcoming "Naked, Short, and Greedy" forum in Los Angeles, hosted by Dr. Susanne Trimbath. Dr. Patrick Byrne, and Arne Alsin will join Dr. Trimbath in a discussion of naked short selling and the mounting crisis in the U.S. equities markets. Here's the info I got:
Naked, Short & Greedy: IS WALL STREET ABUSING THE PRACTICE OF SHORT-SELLING STOCKS?
Presented by: STP Advisory Services, LLC
October 19, 2006
Registration and buffet breakfast begin at 7:30; speakers start at 8:15; event concludes at 11:00
$45 in advance, $60 at the door
Park Hyatt Los Angeles
2151 Avenue of the Stars
Los Angeles, CA 90067
Do you know that you may be holding electronic-entry “entitlements” in your brokerage account that are not backed by any real shares of stock? This problem affects your ability to cast votes in corporate decisions. Did your last 1099 show “non-qualified” dividends, which were taxed as ordinary income? The IRS now requires brokers to separate the reports when you get paid “cash in lieu” on entitlements instead of dividends on real shares.
Votes cast in excess of outstanding shares on corporate ballot issues are becoming commonplace. Public companies and investors complain of share prices depressed and diluted by heavy selling of phantom shares created by DTCC settlement procedures.
On October 19, STP Advisory Services, LLC, will present a rare look into the damage done to investors and companies by short selling and settlement failures. The event will include remarks by three speakers with special insights.
Dr. Patrick Byrne, CEO of NASDAQ-traded Overstock.com, will discuss the trading of “phantom shares” that appear to far outnumber those officially issued and outstanding in OSTK. Portfolio manager and financial writer Arne Alsin will reveal insights gained as an investor in large-lot trades in markets systemically flawed by FTDs. Dr. Susanne Trimbath, an economist with operations management experience at DTCC and the Pacific Clearing Corporation, will illuminate how trading practices take advantage of loopholes in the settlement system to the detriment of both public companies and investors.
Registration fee includes buffet breakfast, event materials and post-discussion coffee. (Valet parking not include.) Click here for more details and to go to secure, on-line registration; or visit us at www.stpadvisors.com/events.html
----------------------
So, I’m minding my business today, cruising the Investor Village message boards, and I come across yet another NY Post spam from a poster there who believes that every financial article written in that publication needs to be broadcast in the IV forum and on Yahoo, lest anyone miss what passes for wisdom in that tabloid-style pub.
It’s not particularly news-or-noteworthy, other than that it focuses on Dr. Patrick Byrne, with a nod at naked short selling.
Here’s the article.
Note the even, fair, balanced, non-agenda driven prose:
“October 15, 2006 -- THE (sic) Value Investing Congress is the type of place where conspiracy theories are ordinarily rejected out of hand, reports Roddy Boyd.
But for one afternoon next month, the annual meeting of the acolytes of Graham and Dodd will be exposed to corporate America's most consistent peddler of sizzling allegations and unfounded conjecture - Patrick Byrne, the founder and CEO of e-tailer Overstock.”
“Conspiracy theories.” “Peddler.”” Unfounded Conjecture.” “Exposed.”
All in two sentences. That is a “Wow” even from me. My drivel reacto-meter spiked into the red - I sat up, now aware that this was no ordinary drivel. This was something special. A sort of super-drivel, the equivalent of drivel gelato, rich and creamy and possessed of super-synthesized drivel goodness.
I suppose it could have been more slanted and biased – maybe throw in a “wild-eyed” or “loony” to be consistent with other “Byrne’s crazy” articles – but maybe they had a space issue. Who knows? I can’t find who actually wrote this masterpiece, but I presume it isn’t Roddy Boyd, as the part about Byrne is actually a report on what Roddy says, by another Post reporter – now apparently the comments/observations of reporters to their colleagues is enough with which to build an article. Who knew? Maybe I’m just dense, but I can’t find who did write this. Is that odd? An article, quoting another reporter, who is quoting hedge fund sources, but with no author….?
”Putting Byrne on the dais to speak alongside some of the most legendary portfolio managers in America was certainly controversial, admits value-investing guru and hedge fund manager Whitney Tilson.
"I saw it as an opportunity to clarify what the naked-shorting argument he has been making is all about, within limits. I'm not interested in his conspiracy crap - and that's what it is: crap. We don't want to hear about Sith Lord conspiracies," he said, alluding to an infamous conference call in which Byrne attributed the actions of company adversaries to the guidance of a shadowy leader.”
Now, we have from a gentleman that runs a hedge fund, that Byrne’s description of how a group of hedge funds, working together, target companies in the time-honored way that the stock pools of yesteryear did, is, "Crap."
Huh.
How does he know what he claims to know? Dunno. No clarification is given. It’s, “Crap”, well, you know, because he says it is. That’s it.
One wonders if the S&L conspiracies, where groups of criminally motivated operators controlled literally hundreds of thrifts, and methodically robbed them, while regulators did nothing, and politicians ran interference, is also, “Crap.” Or whether the insider trading that Boesky and Milken were engaged in, wherein Milken had set up sham entities to hide his ownership of companies, and where he had networks of insider traders feeding info and gaming the markets, is also, “Crap.” Perhaps the Mutual Fund front-running scandal, wherein hedge funds were market timing, stealing billions in a coordinated manner, with the assistance of their brokers, and the operators of the funds, is also, “Crap.” Refco’s recent implosion, after the principals were caught in a sophisticated naked short selling scam, and went on to pull one of the largest IPO scams in history, would have to qualify as, “Crap” – I mean, who would believe international banks and Russian hedge funds and such would be scheming with one of the more prominent groups on Wall Street, even as they are approved to do a public offering by the SEC! That’s crazy talk – “Crap”…right?
I could go on, but you probably get the point. Wall Street history is filled with scumbags gaming the system and cheating – and it’s always about money. And the scams are remarkably sophisticated – these are the best and brightest our universities turn out, and the stakes are billions and billions. Whether it is Steinhardt cheating the Treasuries markets, attempting to manipulate, or Elgindy cheating the penny stock markets, manipulating with a sophisticated group of like-minded felons (including FBI agents), one thing we do know – Byzantine scams are rather common on Wall Street, and trying to dismiss their existence as, “Crap”, with a casual wave of one’s hand, and an earnest declarative style, doesn’t actually change any of that.
As to the desire to clarify the naked short selling thing, perhaps Mr. Tilson should sit down and read the remarkable 22 page document drafted and issued by NASAA, which details in crystal clear detail how the markets are gamed by every strata of larcenous participants. I mean, presuming that the expert opinion of the foremost state-sanctioned authorities on securities regulation in existence isn’t also something that falls under the heading of, “Crap.” This document absolutely describes the problem in ways that even a hedge fund manager can comprehend and appreciate, absent the benefit of a forum. All that is required is remedial reading capability, and a functioning brain stem.
“Tilson added that since some of the smartest people he knew were either long or short the stock, he wanted to hear whether Byrne could make a plausible argument as to whether money-losing Overstock would ever make money.”
So, he’s uninterested in understanding how, as many times in the past, groups of operators (now called hedge fund managers) target victimized companies for destruction. He apparently missed the FFH and Biovail suits, that describe, in detail, how those manipulations work. In short, data be damned, he knows what he knows – and one thing he knows is that if a company is on the SHO list for years, and is on the receiving end of a massive illegal manipulation, it has to be the company’s fault. You know, because they don’t turn a profit. Of course, in NFI’s case, they turn a huge profit, but it’s not the “right kind” of profit…earnings “quality” is in question. Ditto for Taser. As always, though, move the goalposts and blame the company is the name of the game. At least the gamebook is consistent – so far no surprises in this article.
But wait. There is a surprise:
“One person who will not be around to hear Byrne speak is legendary short-seller Jim Chanos, whose fund, Kynikos Associates, has what is said to be the largest Overstock short position in the market.
Originally slated to talk, Chanos is said to have backed out when Byrne was extended an invitation.
Chanos was said to be disgusted with Byrne's theatrics and wild-eyed charges, which include labeling Sen. Richard Shelby (R-Ala.) a "gangster" for failing to enact legislation aimed at curbing naked short-selling more effectively.”
There’s the “wild-eyed!” And we got some “theatrics” thrown in just for fun. As I said, world-class drivel! But we also discovered who one of the big shorts in this is. Chanos. I didn’t know that. That's the surprise...
Chanos’ “disgust” apparently is paradoxical to his short position. I mean, if I was massively short a company, I would be dancing in the streets if the CEO was engaging in “theatrics” and the ever-popular “wild-eyed” charge hurling – I’d be a rich man. Disgust wouldn’t be my sentiment, more like gratitude to the cosmos…unless he was right, and all those easily dismissed theatrics turned out to be 100% correct and accurate descriptions of a massive fraud I was the beneficiary of. Then, I’d likely want to see puff articles discrediting the man, and calling him names.
I did enjoy the last sentence here, wherein his disgust at Byrne’s labeling Shelby a gangster includes the reason – “failing to enact legislation aimed at curbing naked short selling more effectively.”
Huh? I thought he called Shelby a gangster because he is allowing the SEC to assist Wall Street in ripping off the American public on a monumental level. Who knew it was because of failure to enact legislation. Of course, I would have reworded the last part of the sentence, replacing “more effectively” with, “at all.”
We all learned something from the NY Post today. I learned that even confronted with hard evidence like the NASAA document, and the document from the UT Securities Regulator, and from NCANS, and from Robert Shapiro, and Dr. Suzanne Trimbath, and numerous Congressmen, and brokers, and the mountain of FOIA data, that hedge fund managers and their pet tabloids can pretend that black is white, up is down, and can do so with complete sincerity.
At least the fine art of drivel is lovingly alive and protected in NY. It would be a shame if good drivel went the way of the eight-track. While there are some that say that the Post is to serious journalism what Carrottop is to great comedy, I am truly appreciative of the hard work they put in. As one who sometimes feels he's in a desert, where the drivel oasis is always an elusive mirage shimmering on the horizon, it's always rejuvinating to see that the drivel supply is bountifully supplied by a new generation of drivel-meisters.
Hats off to the Post.