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dictators_rule
Joined: 08 Jul 2003
Posts: 6309
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Posted: Mon Oct 12, 2009 5:48 pm Post subject: Financial Meltdown: 'counterfeit' stock/naked short selling
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In a Rollingstone article from October 15,2009 -Wallstreet's Naked Swindle by Matt Taibbi the financial meltdown starting with Bearstearns and Lehman Brothers is explained through the use of naked short selling or 'counterfeit' stock.
http://taibbi.rssoundingboard.com/short-selling-vs-naked-short-selling-an-explanation
http://www.deepcapture.com/rolling-stone-reports-that-naked-short-selling-killed-bear-stearns-and-lehman-brothers/
Actually Taibbi makes the best attempt at actually explaining and detailing many of the dealings on Wallstreet including naked short selling.
It's a long article and still have to reread just for the amount of information included but long story short the tumble started with unfeathered naked short selling of Bearstearns stock after some coincidences including a meeting with the Fed including Timothy Geithner and Ben Barnke and most other major financial corporations except Bearstearns-before their crash.
Naked short selling is borrowing stock without actually borrowing the stock. Taibbi describes as counterfeit stock. Bearstearns had an UNusual amount of naked short selling just prior to their demise. The ' borrower/s 'or persons who actually shorted Bearstearns stock HAVE YET to be identified and yet it is noted that the SEC has investigated for as little as 2,000$ in 'profits'.(shorting began at around 62$ per share and Bear closed it's business at 2$ per share= around a 200 million$ profit AND took Bear OUT)
Quick lesson on short selling - you BORROW a stock under the premise it will go down in price. You sell the borrowed stock at a higher price , buy it back at a lower price to return it to the lender. Naked short selling occurs when no stock was actually lent out or borrowed - the users word is taken that the stock was borrowed-ppffttt
And the usual suspects are listed including Eddie's former employer Goldmansachs. Many are complaining that naked short selling is killing SHLD stock. And yet Eddie Lampert a hedgefund manager more than likely not only shorted a stock but did some naked shorting as well. That and needs an excuse to explain the drop in price since he figures he should be controlling the price with the majority of the shares.
Excellent article; still looking for a complete link
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jbdet313
Joined: 03 Mar 2005
Posts: 1646
Location: Michigan
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Posted: Wed Oct 14, 2009 12:17 pm Post subject:
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Sounds just like the Fed selling off our country's debt, publicly LYING that they wouldn't be buying it back, then doing just that.
Future politicians in the making. But then again, that line's been practically erased.
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cubicle_n4
Joined: 28 May 2004
Posts: 32
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Posted: Wed Oct 14, 2009 12:57 pm Post subject:
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Its like the line from the movie Field of Dreams, "Build it and they will be there."
Just goes to show that if retail builds a model that meets with consumer demand the customers will be there. Sadly for Kmart/Sears they have been trying to build a model for decades without success.
Below is a link to a chart of the purchasing power of the US dollar from 1920 thru 2009. As purchasing power has gone down Kmart/Sears has been building a "not give away the store" model with higher prices than their discount rival competition. Its a model that can't possibly succeed.
http://www.campaignforliberty.com/blog.php?view=17796
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