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+--- Thread: Naked short selling exposure (/showthread.php?tid=841)
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- ValueSleuth - 05-17-2012
Here's the link to an article which discusses Goldman Sach's inadvertent disclosure of it's naked short selling activities in the stock of Overstock.com.
http://www.rollingstone.com/politics/blogs/taibblog/accidentally-released-and-incredibly-embarrassing-documents-show-how-goldman-et-al-engaged-in-naked-short-selling-20120515
Remember the naked shorting days of IOC?
Well, where there's smoke there's ........
VS
- admin - 05-17-2012
This is absolutely priceless, thanks for that Value. Matt Taibbi already had terrific article (a must read) about how Wallstreet has completely rendered harmless and ineffective (from their standpoint) the new financial regulations, and now we get stuff like this:
["“Fuck the compliance area – procedures, schmecedures,” chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.
We also find out here how Wall Street professionals manipulated public opinion by buying off and/or intimidating experts in their respective fields. In one email made public in this document, a lobbyist for SIFMA, the Securities Industry and Financial Markets Association, tells a Goldman executive how to engage an expert who otherwise would go work for “our more powerful enemies,” i.e. would work with Overstock on the company’s lawsuit."]
Thanks for the find..
- Petrovale - 05-17-2012
I can see why retailers would want to commit to naked short selling, working through institutions. I can also see why institutions would be tempted to do the same, betting against different client groups, especially retailers. But what I fail to understand, is how the stock exchange cannot have checks and balances to differentiate between a normal short transaction and the naked version. I imagine that, without such differentiation, regulatory authorities can not enforce the law against such plague.
Or am I missing something?
- ebster123 - 05-18-2012
My guess is they are all greedy pigs basking in the same mud hole. The regulators are tied in with the brokers. They all know each other and most likely do not want to hurt their friends. Also, it would be another gigantic tar stain in the financial institutions they don't want right now. They are still trying to lick their wounds from the last financial mess. Sad but little guys like us are not going to change it.
- admin - 05-18-2012
Let me provide the bigger picture.
1) Here is the 2008 article from Simon Johnson about the financial crisis as the result of capture of many government institutions by finance. You might want to keep in mind that Simon Johnson isn't some left-wing conspiracy theorist but former chief economist of the IMF.
2) If you still have doubts, here is Matt Taibbi about how finance has completely nullified any attempt at financial reform.
3) And of course, Matt Taibbi's article about Goldman's and others naked shortselling practices is pretty revealing as well and points to the need for financial regulation.
Together this paints a rather disturbing picture, I would say. That first (Johnson) article really is one of the best I've seen.
- Putncalls - 05-18-2012
You hit the nail on the head stp! The problem with fixing it, is that the banks own the politicians and AND the media and it costs a fortune to run for office.
- admin - 05-18-2012
Yea, it's pretty difficult to fix indeed..
- Palm - 05-18-2012
You mean to tell me that hedge funds (especially those who use GS as their broker) have access to data and trades that they probably shouldn't and this gives them a decided and unethical edge in the markets?!! STP, seems that last week we read an article about something like that. Between that and having lawmakers in their back pockets it's hard for the hedge funds to be wrong very often if they know what they are doing.
Hasn't a certain someone on the Yazoo board argued time and again that naked shorting does not exist today and IOC shareholders are just being paranoid?
- strategyguy536 - 05-18-2012
Let's see, was it in 2010 or 2011 that Goldman's trading desk made a profit EVERY single day? How do they do that:
- inside information?
- market manipulation?
- illegal syndication?
- naked shorting?
- undue or illegal leverage?
- off-the-books accounting?
- pumping or bashing?
How about all of the above?
- Palm - 05-18-2012
Strategy:
All of above, plus:
Very, very very large lobbying budget