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Muddy Waters' Carson Block Discusses Sino-Forest, Says Will Keep Short In "Ponzi" Until Stock Hits Zero
While the dead cat bounce following some short covering in the massive short interest in TRE.TO has taken the stock up by over 50% this morning, the attack against Sino (pronounced See No)-Forest by Muddy Waters continues.
Block on whether he is short Sino-Forest shares:
"Yes. As we stated on the front page of our research report, we were short and we continue to be short Sino-Forest shares. This is basically just another day at the office for us."
On how long he'll keep the short position open:
"We can close it but the stock is close to zero. We will keep it on until it is zero."
On whether he believes Sino-Forest is a Ponzi scheme:
"It's a Ponzi scheme in that the company perpetually issues securities in order to fund itself. Even by its own fraudulent numbers, the company does not generate any free cash and has not done so in sixteen years. Were the company be unable to issue additional securities to fund itself, it would collapse. That to me is the definition or epitomizes the definition of a Ponzi.
"In this situation, the company appears to be investing for the 23rd century. It's sixteen straight years burning cash, no guidance as to what the rationale is to acquire so many trees so far ahead of customer orders. This is taking a capex fraud--we have found several of these in China--it's taking it to the next level where you're not constrained by the walls of a factory and no one is able to really see the movement of physical goods. It could grow to be infinite provided that the capital markets continue to fund it."
On whether he's had contact with John Paulson and Chris Davis:
"Because I don't have either parties' position to comment, I won't comment on whether I've been speaking with them."
On his total potential profit if Sino-Forest goes to zero or less than a dollar:
"Obviously if the stock continues to go lower, we will make more money."
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Good job Carson Block! At least theres someone out there throwing monkey wrenches into the gears of the fraud markets.
And just as we anticipated in ZH in the previous days, the evidence is in: the E. coli strain (European coli???) currently making the news is a bioengineered pathogen:
http://www.prisonplanet.com/forensic-evidence-emerges-that-european-e-co...
"It could grow to be infinite provided that the capital markets continue to fund it."
that's a GOOD thing....isn't it?"
SINO Forest mgmt and the Federal Reserve are no different it seems.
That's like saying G2 is joined at the hips.
Hummmm.
WOW if true thats some heavy shit!!!! BUT BUT BUT the E in E coli stands for ESCHERICHIA not EUROPE and it has been around for thousands of years... the fact that is can be GMed is there.... you know it all makes sense now!!!
The economies are collapsing and they know there is nothing they can do about it so they create these catastrophies....
Yes, E. coli has been around since the dawn of living time.
But the all too common association of a geographical place with the biohazard supposedly emerging from such place (i.e. asian bird flu, spanish flu, mexican pig flu, etc.) makes us wonder how long until the MSM baptizes this new lab strain with the "european" adjective, and travel bans/import bans start en masse.
Carson Block states, "Were the company be unable to issue additional securities to fund itself, it would collapse. That to me is the definition or epitomizes the definition of a Ponzi. Because "if the US Federal Reserve were not able to issue additional debt then the US dollar would collapse", then Carson Block should easily understand that the entire global banking system is also a Ponzi scheme and that is a far bigger problem then Sino-Forest being a Ponzi scheme.
The Fed doesn't issue debt.
The treaury issues debt that the fed buys with money conjured on a computer so it the fed could not feed the treasury ponzi then the dollar collapses.
For a second there, I thought he was talking about the FED.
This just in....Carson Block arrested on charges filed by a hotel maid in Hong Kong that Mr. Block grabbed.... Oh wait..., that story doesn't break until Wednesday.
Carson "Free Markets" Block is a hero in my view. Save those trees you Goddamn capitalist!
btw there is no chance his real name is "Carson Block", that's a Hollywood name...
A 16 year ponzi. I'm sure the regulators must be mighty pleased that they managed to turn a blind eye for so long. So many of these, all over the place.
The Indian market is an even bigger fraud than the US. Ponder that. When I was running a software company, I was told how, if I did x,y,z steps, these 2 men (well known, TV stock picking geniuses) would take me public, get me a shell.... so many options.
All a scam.
ORI
http://aadivaahan.wordpress.com/2011/05/26/the-video-trailer/
This sino forest story reminded me of my teenage in India. There was a company called Golden Forest India, which offered 20% ROI guarenteed to retail investors in early 90s. Most of our neighbourhood in small town India fell for it and most lost their money. The company properties are still being liquidated and claims are not yet settled. Its heartening to see esteemed managers like John Paulson being done in in a similar fashion. World never changes LOL
Golden FOrest ...now i remember...i was very young then.....My assCracker neighbour kept on insisting my Mom to invest in that .....good thing she didnt .....the neighbour managed to get some other people in my area to invest in that company ...they were not in talking terms for a long time after the Fraud was discovered.
Chinese copy everything - even scams.
Is it not dangerous to be short a stock all the way to Zero? What if trading is suspended indefinetely - can one close a short position in a stock that is no longer trading (and how do we convince the IRS that the price we bought at is correct when there is no market for the stock)?
If the stock goes to zero, you open the champagne, because you get to keep all the money you received when you sold the stock. No need to close out your position and trigger a capital gain.
ORI, needless to say, you didn't go for it.
GOOD huMAN !
Was that note stuck on the outside (as a prank) or from the inside?
By the way, did anyone else catch that huge joke...
Pronounced See No Forest!
Hah!
ORI
ROTFLMAO ... they had some audacity choosing that name with their business model right in front of everybody.
ROFLMAO...
Only, I didn't think it was a joke. I'm so gullable.
I had it as sin o forest...your's better, NO forest.
Hope no one from ZH played it. So jokes not on us.
HAHA, first belly laugh of the day. This is why I love you ORI! Your aim is dead on.
Too many non-existent trees in the way, hence "see-no" forest. :>D
"In this situation, the company appears to be investing for the 23rd century. It's sixteen straight years burning cash, no guidance as to what the rationale is to acquire so many trees so far ahead of customer orders. See no forest indeed.
I think this is where investors realize that the net present value of a future hardwood forest is a bucket full of acorns.
See-no forest indeed.
Supposedly the company is going to post "proof" of their forestry holdings on it's web site today. http://www.sinoforest.com/
Everyone, do the World a favor and plant a tree today -- no need to wait for Arbor Day.
Is it just me or was he getting way too nosy there at the end? Like Carson Block is going to throw out a specific number...
This is The Free Market working for you! Not some government bureaucrat getting paid by the hour watching porn.
Any1 still having doubts about wheather the free market can police it self or not junk ahead.
Listen. You can't invest in China passively from your armchair.
Unless you are a direct investor with boots on the ground, a 10 year horizon and the capacity to write checks you are fresh meat.
It does not matter if you are Buffet, Paulson or Joe Six-pack; its a badge of honor to take these guys. And next year it will be a different deal by the same people.
Funny thing is, unless I'm mistaken, I don't think Carson had to put his own boots on the ground to figure out the fraud. 16 years of perpetual share offerings to fund the company...if I was in Paulson's fund, I'd be asking some direct questions about the fund's due diligence...like, was there any DD done whatsoever?
Time for Paulson to harvest some nutsacks?
...fraud pays, imagine that.
I have to admit, I'm thinking this is a potential buy for a quick trade.
I sent an email to ZeroHedge to give you guy sthe heads up on this false fraud claim...they decided not to post it...I'm up 52% IN 2 HOURS...Go to http://CalibratedConfidence.blogspot.com
his answers were so BOSS!!!
Till where will you hold your short; Well the stock is close to zero, so we'll hold it to zero.
Sick!!!
He never blinked, got them by the balls!!
Carson Block For Chairman of the S.E.C. Bitchez!
Comes across as a Robin Hood however as suspected, perhaps Block was in contact with significant third parties which, if he was, is another way to make money. Tell the heavily invested they are being duped, they bail out, and your short postion works. Which brings up... Did Paulson buy or position a put handle for protection?
It smells like Carson Block is going to make money on behalf of Sino-Forest by making false accusations against them. Maybe some other parties are involved. Maybe there's some politics in it, chinese are easy to fuck with. It smells like typical Wall Street spin.
Another fraud. Salesforce, (CRM). (Salesfarce). This time at home. Management covering over lack of earnings while making bravado over record revenue.. P/E: 420 Dilluting shareholders and calling it earnings. Cramers favorite. Read all about it:
http://rechtiskrom.wordpress.com/2011/05/30/most-expensive-listed-company-is-a-fraud/#comments
By his definition, the entire market system is a ponzi scheme (not totally untrue).
Muddy Water, Absrorka, etc.......
please don't think these guys are some white knights of truth. More often than not, they're "research" is complete horseshit cobbled together with innuendo and conjecture. I love seeing Paulson take it square in the cheeks, but I won't celebrate these scum bag short manipulators.
It's one thing to bully and manipulate little small caps, now he's f***ed with actual players. My guess is Muddy Waters get's their ass blown up over this one. SEC will direct its attention to these 'hit piece' short sleaze dudes.
C'mon, this is old fashioned money laundering through fraud street.
Get a clue.
I think this is a good time to dedicate a Muddy Waters song to "See No Forest"
http://www.youtube.com/watch?v=1e9m0Xhm1RQ
They need to join with pharma. They have pills when you have problems with your "wood".
The type of questioning coming out of the reporter were pretty one-sided. I would love to hear him ask such skeptical questions to people from the fed or any other institution that's regularly on the air touting assessments born out of conflicts of interests.
They could not see the forest for the trees!
They could not see the forest for the trees!