• Steve H. Hanke
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    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Goldman's "Naked Short Selling" Strawman

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Tue, 09/29/2009 - 15:14 | 82692 chumbawamba
chumbawamba's picture

The Uprising

http://vimeo.com/6475921

Find your conscience. Find your strength. Find your enemy.

And strike.

I am Chumbawamba.

 

Tue, 09/29/2009 - 15:34 | 82719 Anonymous
Anonymous's picture

that is a suh-weet video.

Tue, 09/29/2009 - 16:26 | 82790 Anonymous
Anonymous's picture

good video... passing it along now.

Tue, 09/29/2009 - 17:08 | 82852 Tripps
Tripps's picture

does anyone know the band/song in this? love it

Tue, 09/29/2009 - 17:54 | 82908 Anonymous
Anonymous's picture

Muse,
from The Resistance

Wed, 09/30/2009 - 02:34 | 83447 handsfree
handsfree's picture

Congress has long ago given up all moral authority on this issue. But, go figure. When you lay down with whores, expect to wake up with STD's.

Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.

good articles; good articles 4 slow news day ..http://www.. hat tip: finance news & opinion updated daily

Tue, 09/29/2009 - 16:29 | 82793 arnoldsimage
arnoldsimage's picture

good video... sharing it now with others.

Tue, 09/29/2009 - 18:53 | 82984 gmrpeabody
gmrpeabody's picture

Maybe it's just me (OK..I'm sure it's me), but.....

I get the feeling that video could have been paid for and edited by the same people that surround and advise the current governing group. Sure seems to have their stamp on it, and yet..

Tue, 09/29/2009 - 20:39 | 83121 Anonymous
Anonymous's picture

we understand your skepticism. we share it too (question everything before acceptance, especially when it comes to emotionally charged media).

the guy speaking at the end was adam kokesh:
http://en.wikipedia.org/wiki/Adam_Kokesh

...meet one of your new congressmen...

Tue, 09/29/2009 - 22:18 | 83277 Anonymous
Anonymous's picture

Just donated. Support RJ Harris, Rand Paul, and Peter Schiff as well. We need to vote these criminals out before it comes to blood.

Tue, 09/29/2009 - 20:46 | 83134 Anonymous
Anonymous's picture

very obscure MLK quote...but very relevant.

we were walking down the street today and saw a t-shirt that had both MLK's and the Wiz of O's pictures on it, exclaiming "Now Is The Time".

nice to see that someone is starting to make the rightful separation once again.

one of the many many differences between the two was that MLK was a registered Republican.

Tue, 09/29/2009 - 15:26 | 82708 mrhonkytonk1948
mrhonkytonk1948's picture

I have never understood why any short sale without a verifiably delivered share (not a time-share, either!) was not reversed T+3 or similar.   Well, actually I do understand, and it is fraud, pure and simple.  Bah.  Humbug.

Tue, 09/29/2009 - 17:17 | 82863 Billy Bob
Billy Bob's picture

I may be too old, or I may be uninformed, or maybe some combination of the proceeding, but I recall some rules issued in 1934 that forced "short sellers" to enter a trade on an "uptick".  Of course, the seller had to have arranged to deliver those shares on settlement date.  The "up-tick" rule was designed to eliminate the operations of the great short sellers of the '20, like old Joe Kennedy, from "driving down" the price of the shares of a targeted company.

 

I understand the current debate on "naked short selling" to focus on the non-delivery of shares.  But I don't hear any talk re: the "up-tick" rule.

Any thoughts?

Tue, 09/29/2009 - 17:19 | 82865 deadhead
deadhead's picture

the uptick rule went out under Chris Cox at the SEC under the Bush admin. is this what you were looking for?

Tue, 09/29/2009 - 18:07 | 82925 Billy Bob
Billy Bob's picture

I knew there had to be a reason.. I should have guessed the great free market advocates of the last 8 years changed the rules.  What the devil did those nasty regulators of the '30's know about how to operate a free market!

Oh, well, I guess I will never have to pass the series 7 exam again.

Tue, 09/29/2009 - 19:13 | 82996 trader1
trader1's picture

is it coincidence that the uptick rule was rescinded during the summer of 2007?

 

 

Tue, 09/29/2009 - 15:39 | 82722 lizzy36
lizzy36's picture

hertz, thou doth protest too much methinks.....

Tue, 09/29/2009 - 17:21 | 82869 deadhead
deadhead's picture

I will burn those shorts...

ummm, never mind.

Tue, 09/29/2009 - 19:12 | 82994 lizzy36
lizzy36's picture

where there is smoke, generally there is fire......

Tue, 09/29/2009 - 15:40 | 82725 Rari Nantes In ...
Rari Nantes In Gurgite Vasto's picture

every transaction is made of 2 sides when someone does a NSS or for this matter any sale it does it because there is a willing buyer on the other side, which most likely is not interested to know if the seller is "naked or not". If the were no willing buyers the sellers would not be able to find a bid and the market would be 0-offer levels.
The other side of the coin is that if you don't allow short selling you should not allow leveraged buying either...

Mon, 10/05/2009 - 15:41 | 89099 _Biggs_
_Biggs_'s picture

On the contrary, with a naked short transaction, the shares are created out of thin air and are therefore counterfeit.  At least with leverage, one could make an argument there is accountability if the trade goes bad.  Plus market participants cannot see whether the shares are phantom or not.  It certainly seems relavent to me whether the shares I am buying are naked or not and frequently observe the Reg. SHO list at the SEC to see whether there were failure to delivers in stocks I trade.  On any given day, for example ETFC can have millions.  To me, regardless of the MBS risks, this tells me there is significantly more risk there, as the trading is not above board.  There is a law that states that shares need to be delivered within a certain amount of time, and this law is broken constantly.  Again, this places trades unfairly in the favor of institutions and hedge funds...because they can and they own the government. 

 

The fact that Goldman is able to show up at a hearing like they did and blatently lie to the government saddens me.  I know a statement at this point in the game is certainly more than a little trite, but I will never get used to this blatent criminal activity.  It really does sicken' me.  

 

NSS is bullshit and it illegal.  End of story.

 

I don't generally post here that often, but I would highly recommend you educate yourself on what the implications of NSS have had on multiple companies traded on stock exchanges in the U.S before you consider opening up your keyboard to post about it.

 

Thanks.

Tue, 09/29/2009 - 15:41 | 82727 vreporter
vreporter's picture

Many of these themes will come under addressing "liquidity risk," a theme on which London regulators have jumped ahead of us.

Tue, 09/29/2009 - 15:43 | 82730 Comrade de Chaos
Comrade de Chaos's picture

aren't bear raids representation of capitalism, where markets are efficient and participants are free to invest at their will and according to their views? Since bear raids represent capitalism and GS is against those therefore GS is anti-capitalist entity.

It's founders must be turning in their graves... SHAME!!!!

Tue, 09/29/2009 - 15:46 | 82734 Comrade de Chaos
Comrade de Chaos's picture

GS should rename thyself into GSSRP, GS & Social Republic of Pussycats. 

Tue, 09/29/2009 - 15:58 | 82748 ratava
ratava's picture

My dad does politics, not economics, but when I asked him what happened in the US, he got it right immediately: "Bankers robbed them."

Tue, 09/29/2009 - 16:01 | 82756 Anonymous
Anonymous's picture

Hello Bank of America,

I already closed the personal accounts I had with you.

This week I finally convinced my business partners to move our commercial accounts (aprox. 220K) to a credit union.

Bank of America: F**K YOU

Tue, 09/29/2009 - 16:01 | 82758 Pizza Delivery Man
Pizza Delivery Man's picture

Market down. Victory for the bulls.

Tue, 09/29/2009 - 16:02 | 82759 Anonymous
Anonymous's picture

Hello Bank of America,

I already closed the personal accounts I had with you.

This week I finally convinced my business partners to move our commercial accounts (aprox. 220K) to a credit union.

Bank of America: F**K YOU

Tue, 09/29/2009 - 16:46 | 82816 Mazarin
Mazarin's picture

A.P Giannini would be rolling in his grave at what the crazed banksters have turned his baby into. Giannini founded Bank of Italy in San Francisco. It was renamed Bank of America as it grew. But only recently was it acquired by the east-coast bankster establishment and turned into the plebe (little people)-robbing tentacle of the fed-morgan-rockefeller squid...

Tue, 09/29/2009 - 21:57 | 83252 Gilgamesh
Gilgamesh's picture

Oh, no.  I strongly disagree with your assumption.  He was a key figure in this from the very beginning...


Giannini, Amadeo Peter.  Born in 1870. Giannini, who in 1904 founded Bank of America in San Francisco, originally called Bank of Italy (until 1930), virtually invented branch banking.  Giannini's bank was "for the little fellows" at a time when banks generally lent only to the wealthy.  Giannini's first foray east was to reach across the continent to form the East River National Bank in New York City in 1919.  He then bought the Bowery National Bank in 1925 and New York's small Bank of America in 1928.  In 1928, banker Giannini formed Transamerica Corporation as a holding company for all his Californian interests.  Transamerica Corp. held 99% of the stock of Bank of America and it continued buying up banks in Oregon, Nevada, Washington and Arizona.  Right after Transamerica was created, Giannini retired to Italy.  He put New York banker Elisha Walker, who headed Blair & Co. until it was taken over by Transamerica in March 1929, in charge as CEO.  Elisha Walker was a director of American International Corp., once set up by the Morgans and Rockefellers, together with Percy Rockefeller, Pierre du Pont, Otto Kahn, William Woodward (director NY Fed), and George Herbert Walker (father of Prescott).  Elisha became a senior partner in Kuhn Loeb & Co. in 1933, which was managed by Felix Warburg and Otto Kahn, successors to Jacob Schiff.  Elisha held 13% of the bank's stock in 1933, the same amount as John Schiff, son of Jacob Schiff.  In the 1960s, after Giannini's death, Bank of America even became larger than First National City Bank and Chase Manhattan of Wall Street.  Giannini was a great admirer of FDR's New Deal.  Lawrence Mario Giannini, son of founder Amadeo Peter Giannini, was elected president of Bank of America in 1936.  In 1945, Bank of America became America's largest bank, with assets of $5 billion.  A.P. Giannini died in 1947.  In 1953, regulators succeeded in forcing the separation of Transamerica and Bank of America.

 

Any need to mention his involvement in the Globalist Societies?

Wed, 09/30/2009 - 23:01 | 84702 McGriffen
McGriffen's picture

interesting, thanks for that bit o' history.  quite the panopoly (sp?) of power elites

Tue, 09/29/2009 - 17:47 | 82898 pigpen
pigpen's picture

Even poor little naive Pigpen took his money out of Capital One Bank.  It is the only way for the hoi polloi the only way to hit the monied elite oligarchs is to take your money out of the system.

Be like pigpen and take your ball and go home.

Cheers,

Pigpen

Tue, 09/29/2009 - 18:58 | 82986 gmrpeabody
gmrpeabody's picture

+1

Local credit union only and zero balance on any credit card.

I shop the merchants and restaurants that accept Am Ex.

Tue, 09/29/2009 - 16:43 | 82813 Careless Whisper
Careless Whisper's picture

Isn't Hertz controlled by the Carlyle Group? Maybe afraid of a domino effect?

http://onlinejournal.com/artman/publish/article_4307.shtml

 

Tue, 09/29/2009 - 18:46 | 82975 unemployed
unemployed's picture

Eventually deepcapture.com got down to how the naked short selling/failure to deliver is done.  My probably inaccurate understanding is that there is an SEC? rule that allows market makers to fail to deliver if they have a hedge, such as a put (far out of money, exchange or private).   They go on to show how a hedge fund would borrow the electronically created non delivered  shares from a co conspirator market maker so that either hedge fund or market maker could sell at will.  Bottom line,  as with stock proxies, they say the clearance corporations allow an infinite number of shares to "exist". 

But why limit this to stocks,  what about the amount of Treasuries and bonds that fail to deliver.  Not to say anyone is taking advantage of this. But if two different entities could lay claim to the same asset on their balance sheet at the same time that would enable quite a Ponzi scheme. 

Tue, 09/29/2009 - 21:12 | 83184 Gilgamesh
Gilgamesh's picture

I would assume Deepcapture is involved in what it to come here.  Or hope, at least.

Mon, 10/05/2009 - 16:40 | 89187 _Biggs_
_Biggs_'s picture

unemployed-indeed...Ponzi scheme.  I think the argument has been made here that our entire financial system is a check-kiting scam right now.  Let's see which Peter I can rob to pay Paul. 

 On NSS, the rules were actually changed during "community service" hours performed by none other than Bernie Madoff in the bowels of the SEC.  My guess is he was just a pawn, in the end, that was one of many.  His lucky number came up as scapegoat 31276 within whatever organization he was working for.  Now this story has got to be one of the SEC's biggest black eyes, in my opinion, going right now.  A guy never hears a word about it, either.  And, as I think was reported here, Madoff articulated that he was next in line to takeover the Chairman spot at the SEC.  Unreal.

link:  http://www.deepcapture.com/tag/the-madoff-exception/

(Side note) My links to deepcapture on comment boards such as the New York Times have been deleted.  One day I posted links six times only to have the messages vaporized.  Pretty weird.

I haven't seen the Rolling Stone article, or whether it is oversimplified (TD-please consider the audience), but here is the video of the deepcapture version of Bear and Lehman.  They provide many instances of NSS hurting or destroying companies that are not financial institutions.

video:  http://www.deepcapture.com/the-short-heard-round-the-world/

I'm happy to see this addressed here.

 

Biggs

 

 

 

Tue, 09/29/2009 - 18:48 | 82979 Anonymous
Anonymous's picture

DNDN bear raid a few months ago, brought the stock from 20 down to about 8. NASDAQ refused to reverse the trades.

Tue, 09/29/2009 - 21:24 | 83205 bonddude
bonddude's picture

I read a compelling and seemingly credible story 2 or 3 years ago about the massive fees these illegal transactions create for all of the exchanges and DSCC. If true they will NEVER care. Talkin' about billions in the trough.

Frankfurt and other lesser exchanges were reported to allow registering companies shares to trade there and then voila. I really don't know much about it. Does anyone else?

Tue, 09/29/2009 - 21:15 | 83189 Anonymous
Anonymous's picture

obviously the Golden Sacks boys still think they're smarter than everyone else.

in the end, that might be an error that may prove to be fatal.

Tue, 09/29/2009 - 22:39 | 83297 Gordon_Gekko
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Hubris will be their undoing.

Tue, 09/29/2009 - 21:15 | 83192 Anonymous
Anonymous's picture

Direct Execution Sales Trader - Electronic Equity Trading
50790BR
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Series 7 & 63 registration

Fluent in industry regulatory issues and electronic execution concepts

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To Apply to this role: Please go to the UBS career portal at www.ubs.com/careers and use the requisition number in the Keyword field: 50790BR

Wed, 09/30/2009 - 02:34 | 83439 handsfree
handsfree's picture

Intelligent service provision to customers to ensure and improve quality of service around algorithm-selection, execution quality, market structure, technical advice etc.

Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.

good articles; good articles 4 slow news day ..http://www.. hat tip: finance news & opinion updated daily

Mon, 10/05/2009 - 05:05 | 88634 ToNYC
ToNYC's picture

what up? no Series 55 for Equity Trader?

Tue, 09/29/2009 - 22:35 | 83291 Gordon_Gekko
Gordon_Gekko's picture

"The US equities market is increasingly efficient and is broadly regarded as the best in the world."

Goldman's cocaine consumption must be at all time high these days. What a load of utter HORSESHIT. People I know - both family and friends - will prefer DEATH to "investing" in the US equities "market".

Wed, 09/30/2009 - 02:32 | 83420 handsfree
handsfree's picture

Good point here

Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.

good articles; good articles 4 slow news day ..http://www.. hat tip: finance news & opinion updated daily

Mon, 10/05/2009 - 05:10 | 88636 ToNYC
ToNYC's picture

didn't bother with the articles, but not putting jpmChase with their huge SPY prints as numero uno or photo-finish with GS is off the mark.

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