I've taken the position that Wall Street, and the banks that run the US economy, have been taking radically dangerous risks with no expectation of having to ultimately be accountable for their foolhardiness - they intend to stick the taxpayer with the fallout, long after the mega bonuses and stolen savings of America have been spent on coke, yachts and mansions.
That the prime brokers act as a de facto cartel, engaging in illegal racketeering and stock manipulation, is the crux of the OSTK suit. I sense that we will see, from discovery, that my description of the anatomy of a manipulation, from years ago, will turn out to be 100% accurate. Hedge funds use their cronies in the press to smear targets, which the prime brokers and options MMs then assist them in destroying, all the while as the SEC pretends concern (while actually rolling its eyes and shopping for jets, for when its top staffers go into private practice).
The other Easter Bunny refrain readers should be familiar with is that hedge funds, with their enormous leverage, pose a systemic risk, and that their complete lack of regulation (bought by their influence with their wholly captured politician buddies) could vapor lock the system and cause a global depression under the right circumstances.
A few articles came out in unlikely places - the NY press - that underscore that what has been obvious to me, and my readers, for years, is actually the tame version of the looting of America.
First, we have Bear Stearns already circling with regulators and the treasury to keep them appraised of the fallout from F-ing up their risk management on CDOs. Two observations: 1) They are doing so because they will need to frame the argument that they are too big to fail due to their importance to the economy - translation is that when they bet right, they get to keep the stolen cash, and when they bet wrong, taxpayers should pay their liabilities. 2) Just a couple hedge funds can destroy a Wall Street powerhouse and cause a systemic crisis - so why has the popular refrain of everyone from the Fed to the government been, "they will police themselves" when that has NEVER IN RECORDED HISTORY EVER WORKED?
The NY Post, ironically, has the article that should serve as the canary in the coal mine on this one. I'm sure the NY press is still busy convincing the rest of the country that I am some wild-eyed loon or penny stock scammer, however for a loon, an astounding number of my predictions relating to this situation now seem prescient.
Including the conclusion, now several years old, that the SEC is as bent as a silly straw, and is nothing more than a thinly veiled PR entity for Wall Street, to convince the rubes in the hinterland that there is a sheriff on duty. Newsflash. There isn't, and hasn't been, for decades. It is a lie. Even the always sucking-up DTCC sock puppet 'lil GW has to admit it - the SEC is gamed, and should be dismantled. Everything from its foot dragging on SHO, to eliminating the 70+ year old uptick rule designed to prevent massive bear raids, to its obvious obstruction of justice in the Pequot matter, points to that. It's refusal to implement timely short reporting by those massively short, the stance that market data that would serve to inform investors is secret, the clear indication that those with juice get hall passes on the rule of law, the wrist slaps to criminals intent upon wholesale fraud....
From the NY Times comes this report on the findings of the Judiciary Committee - which I predict nobody will act on. Why would they? Wall Street owns them. Every politician needs money from Wall Street to win. Who is going to piss off the money cartel by spelling it out and then taking action? Nobody. That's who. My prediction is we will be slammed with a massive financial crisis wholly built by Wall Street and its larcenous ways, we will be told by the wholly owned government that it is necessary to further mortgage our children's' futures and our own retirements in order to pay the tab for Wall Street's theft of trillions, and the Fed will continue to dilute any value of the dollar in secret - just like most banana republics, we have stopped publishing M3 (the money supply) stats so nobody knows precisely how hard the printing presses are running.
Meanwhile the crooks continue to game the markets, which are basically a joke now. Bear raids are a daily occurrence by anonymous pools of money with no accountability or regulation. The cops are crooked. The economy is faltering due to Fed manipulation of interest rates, following Greenspan's encouragement that everyone get into rate-sensitive mortgages. The next thing will be a radical tightening of margin, just like in 1929, which will kill some of the over-leveraged hedge funds, which in turn will cause more catastrophic failures, which will in turn create a domino effect.
Everything I, and Patrick, and Dave, and Mark, and Bud, have been complaining about, and warning about, for years now, is unfolding before your eyes. In slow motion. The tin foil hat crowd turns out to have been 100% correct about NSS, about the SEC's crookery, about the astounding larceny and menace posed by hedge funds....
Which will be forgotten by the mainstream media, as they understand that writing history allows one to ignore uncomfortable truths exposed by the "amateurs" on the web.
The NY media ignored this for years. It called us names, pretended that we were all loco, persecuted us, and basically lied to the country in favor of advancing the agenda of its Wall Street masters. It continues to do so. The idea that the press will serve as a watchdog is as much of an anochronism as the notion that the SEC will protect you from Wall Street. It won't. It cannot be trusted. It had its chance, and it failed miserably, because a few scumbags could be bought for a few pieces of silver, and preferred to betray the public trust than to do the job they aspired to.
Just as it has been for all of history.
Welcome to the end game.