Matt Taibbi - Wall Street's Naked Swindle

[Rajiv]

Wall Street's Naked Swindle

Watch Matt Taibbi break down short-selling vs. naked short-selling on his blog, Taibblog.

On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — "like buying 1.7 million lottery tickets," according to one financial analyst.

But what's even crazier is that the bet paid.

At the close of business that afternoon, Bear Stearns was trading at $62.97. At that point, whoever made the gamble owned the right to sell huge bundles of Bear stock, at $30 and $25, on or before March 20th. In order for the bet to pay, Bear would have to fall harder and faster than any Wall Street brokerage in history.

The very next day, March 12th, Bear went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of state aid; by the weekend, it was being knocked to its knees by the Fed and the Treasury, and forced at the barrel of a shotgun to sell itself to JPMorgan Chase (which had been given $29 billion in public money to marry its hunchbacked new bride) at the humiliating price of … $2 a share. Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million. This trader was either the luckiest guy in the world, the smartest son of a bitch ever or…

Or what? ...
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[cobben]

Re: Matt Taibbi - Wall Street's Naked Swindle

Taibbi has picked up on this, which has been known for many years without anything being done about it. More power to him if he can help force reform.


Deep Capture: Strange Occurrences, and a Story about Naked Short Selling
http://www.itulip.com/forums/showthr...72888#poststop

[goadam1]

Re: Matt Taibbi - Wall Street's Naked Swindle

Wall Street's Naked Swindle

Taibbi may favorite writer since the passing of dear Dr. Thompson.

[don]

Re: Matt Taibbi - Wall Street's Naked Swindle

Taibbi is doing some great work. Let's hope RS's investigative budget holds out.

from across the pond:

Public must learn to 'tolerate the inequality' of bonuses, says Goldman Sachs vice-chairman

Bankers' soaring pay is an investment in the economy, Lord Griffiths tells public meeting on City morality


One of the City's leading figures has suggested that inequality created by bankers' huge salaries is a price worth paying for greater prosperity.

In remarks that will fuel the row around excessive pay, Lord Griffiths, vice-chairman of Goldman Sachs International and a former adviser to Margaret Thatcher, said banks should not be ashamed of rewarding their staff.

Speaking to an audience at St Paul's Cathedral in London about morality in the marketplace last night, Griffiths said the British public should "tolerate the inequality as a way to achieve greater prosperity for all".

He added that he knew what inequality felt like after spending his childhood in a mining town in Wales. Both his grandfathers were miners who had to retire from work through injury.

With public anger mounting at the forecast of bumper bonuses for bankers only a year after the industry was rescued by the taxpayer, he said bankers' bonuses should be seen as part of a longer-term investment in Britain's economy. "I believe that we should be thinking about the medium-term common good, not the short-term common good ... We should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people," he said.

Griffiths said that many banks would relocate abroad if the government cracked down on bonus culture. "If we said we're not going to have as big bonuses or the same bonuses as last year, I think then you'd find that lots of City firms could easily hive off their operations to Switzerland or the far east," he said.

Goldman Sachs is currently on track to pay the biggest ever bonuses to its 31,700 employees after raking in profits at a rate of $35m (£21m) a day.

The Centre for Economics and Business Research (CEBR) said today that City bonuses could soar to £6bn this year.

The chairman of the Financial Services Authority (FSA), Lord Turner, who was also present at the meeting, called once again for a global tax on financial transactions. He said that such a so-called "Tobin tax" could redistribute bank profits to help fight world poverty and climate change.

"The role of regulation is to bring a concordance between private actions and beneficial results," he said.

http://www.guardian.co.uk/business/2...s-goldmansachs

[lsa420]

Re: Matt Taibbi - Wall Street's Naked Swindle

Taibbi is doing some great work. Let's hope RS's investigative budget holds out.

from across the pond:

Public must learn to 'tolerate the inequality' of bonuses, says Goldman Sachs vice-chairman

Bankers' soaring pay is an investment in the economy, Lord Griffiths tells public meeting on City morality


One of the City's leading figures has suggested that inequality created by bankers' huge salaries is a price worth paying for greater prosperity.

In remarks that will fuel the row around excessive pay, Lord Griffiths, vice-chairman of Goldman Sachs International and a former adviser to Margaret Thatcher, said banks should not be ashamed of rewarding their staff.

Speaking to an audience at St Paul's Cathedral in London about morality in the marketplace last night, Griffiths said the British public should "tolerate the inequality as a way to achieve greater prosperity for all".

He added that he knew what inequality felt like after spending his childhood in a mining town in Wales. Both his grandfathers were miners who had to retire from work through injury.

With public anger mounting at the forecast of bumper bonuses for bankers only a year after the industry was rescued by the taxpayer, he said bankers' bonuses should be seen as part of a longer-term investment in Britain's economy. "I believe that we should be thinking about the medium-term common good, not the short-term common good ... We should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people," he said.

Griffiths said that many banks would relocate abroad if the government cracked down on bonus culture. "If we said we're not going to have as big bonuses or the same bonuses as last year, I think then you'd find that lots of City firms could easily hive off their operations to Switzerland or the far east," he said.

Goldman Sachs is currently on track to pay the biggest ever bonuses to its 31,700 employees after raking in profits at a rate of $35m (£21m) a day.

The Centre for Economics and Business Research (CEBR) said today that City bonuses could soar to £6bn this year.

The chairman of the Financial Services Authority (FSA), Lord Turner, who was also present at the meeting, called once again for a global tax on financial transactions. He said that such a so-called "Tobin tax" could redistribute bank profits to help fight world poverty and climate change.

"The role of regulation is to bring a concordance between private actions and beneficial results," he said.

http://www.guardian.co.uk/business/2...s-goldmansachs

Wow, thanks for sharing that one don.

If you will please excuse me, I need to go throw up.

[don]

Re: Matt Taibbi - Wall Street's Naked Swindle

It shows what Taibbi and Rolling Stone are up against.

[zilbo79]

Re: Matt Taibbi - Wall Street's Naked Swindle

Rajiv,

Good post. Expect NSS deniers posting flame posts soon!

Paul

[aaron]

Re: Matt Taibbi - Wall Street's Naked Swindle

Did that quote make anybody else want to @#$U@#()*$) ring his neck? It is like he is mocking us. mother fucker

[don]

Re: Matt Taibbi - Wall Street's Naked Swindle

Did that quote make anybody else want to @#$U@#()*$) ring his neck? It is like he is mocking us. mother fucker

Hubris...Arrogance...Let Them Eat Cake. It's all there. When you own Washington you must feel you can act that way....

PS: FIRE is dead. HAhahahahahaha.......

[sadsack]

Re: Matt Taibbi - Wall Street's Naked Swindle

I think it's just another manifestation of the phenomenon:

From Twilight of the psychopaths

Have you read "Political Ponerology?"

Political Ponerology is a study of the founders and supporters of oppressive political regimes. Lobaczewski’s approach analyzes the common factors that lead to the propagation of man’s inhumanity to man. Morality and humanism cannot long withstand the predations of this evil. Knowledge of its nature – and its insidious effect on both individuals and groups - is the only antidote.

One of these days I'll figure out how to correctly cite relevant links, etc.

C/N: Ponerology = the study of evil. Nearly all positions of power in the modern world have been captured by psychopaths. In order to achieve a position of power, one must, if not congenitally afflicted, learn how to think and behave like a psychopath.

[thriftyandboringinohio]

Re: Matt Taibbi - Wall Street's Naked Swindle

Griffiths said that many banks would relocate abroad if the government cracked down on bonus culture. "If we said we're not going to have as big bonuses or the same bonuses as last year, I think then you'd find that lots of City firms could easily hive off their operations to Switzerland or the far east," he said.

One often hears this argument or it's variations:


- if we dare impede the robber barons they'll move away taking their vast wealth with them, and we'll be helpless without them (the turncoat admission)

-if we try to impose higher taxes on the robber barons it won't work because they'll just evade taxes with their expensive talented lawyers and accountants (the tax felon admission)



-They deserve to be wealthy robber barons because they're better than us, and you can prove it by examining the only objective measure of excellence, a person's wealth (the snake oil hard-sell)


All three gambits apparantly still working well.

[Serge_Tomiko]

Re: Matt Taibbi - Wall Street's Naked Swindle

I think it's just another manifestation of the phenomenon:



One of these days I'll figure out how to correctly cite relevant links, etc.

C/N: Ponerology = the study of evil. Nearly all positions of power in the modern world have been captured by psychopaths. In order to achieve a position of power, one must, if not congenitally afflicted, learn how to think and behave like a psychopath.

This is because the modern world is characterized by democracy. Democracy encourages antisocial behavior because it rewards such psychopaths for pandering to what the people think they want (as indoctrinated through the media-educational apparatus supported by plutocrats) rather than what is best or true. As most truths are uncomfortable to the masses reared on egalitarian fiction, democratic leaders must almost always lie. That, at its heart, is the essence of antisocial behavior.

[don]

Re: Matt Taibbi - Wall Street's Naked Swindle



Goldman and JP- at last, transparency :rolleyes: :mad: :p

[zilbo79]

Re: Matt Taibbi - Wall Street's Naked Swindle

Rajiv,

The counterfeiting of stocks is bad enough, have you read this article on the counterfeiting of Treasuries?

The inaction has led to the build-up of $2 trillion in undelivered bonds. Moreover, the number of fails is almost certainly higher than is being reported, claim insiders, possibly substantially so. The $2 trillion in fails fell to $1.3 trillion at the week ending November 5, according to the New York Fed. However, Trimbath points out this is only data volunteered by about 17 primary dealers. The fail rate by those dealers in US treasuries hit 30% one week in October. By November 11 it was still at 22%. "And what about the 200 to 300 bond dealers who settle through the DTCC? The DTCC does not reveal publicly the fails to deliver there. Imagine the magnitude of the true amount of fails to deliver," she says.

http://www.euromoney.com/Article/206...point.html?p=2

The idea that Wall Street is one giant counterfeiting machine is not so implausible.

Paul

[reallife]

Re: Matt Taibbi - Wall Street's Naked Swindle

How do you spell?.....guillotine?

Don't think it can't happen again.:eek: