Month: August 2008

Posted on

Article: Searching for the naked truth

Article - Media

Searching for the naked truth

The Economist, 17 August 2008

For much of this financial crisis, America’s Securities and Exchange Commission (SEC) has cut a pathetic figure, relegated to the sidelines as a hyperactive Federal Reserve tried a variety of creative measures to keep the system afloat. When the market watchdog finally did get in on the act, it was highly controversial: a temporary order restricting short-selling the shares of 19 financial firms deemed systemically important, including Fannie Mae and Freddie Mac, the two troubled mortgage agencies.

Read full article.

Posted on

Article: SEC’s ban on short-selling Fannie, Freddie ends

Article - Media

SEC’s ban on short-selling Fannie, Freddie ends

Marcy Gordon

New York Times, 13 August 2008

A government order expires Tuesday that temporarily banned a certain kind of short-selling of the stocks of mortgage finance companies Fannie Mae (FNM) and Freddie Mac (FRE) and 17 large investment banks.

The companies’ shares have stabilized since the ban took effect July 21. The Securities and Exchange Commission says its order helped prevent stock manipulation, and that regulators will be able to analyze data to gauge its effectiveness. But some experts say that may be difficult to determine.

Read full article.

Posted on

Article: Did It Help to Curb Short Sales?

Article - Media

Did It Help to Curb Short Sales?

Floyd Norris

The New York Times, 12 August 2008

A rule that made it harder to short some financial stocks and that may have helped raise prices and reduce the volume of shorting in those stocks expired Tuesday, as the Securities and Exchange Commission considers whether to tighten the rules on all short selling.

It may be a coincidence, but the announcement of the rule on July 15 coincided with the bottom of the bear market for financial stocks, which leaped that day and are now well above where they were. And the final day proved to be a very bad day for those shares.

Read full article.

Posted on

Article: Bringing Down Bear Began as $1.7 Million of Options

Article - Media

Bringing Down Bear Began as $1.7 Million of Options

Gary Matsumoto

Bloomberg cited by RGM Communications via Wayback, 11 August 2008

On March 11, the day the Federal Reserve attempted to shore up confidence in the credit markets with a $200 billion lending program that for the first time monetized Wall Street’s devalued collateral, somebody else decided Bear Stearns Cos. was going to collapse.

In a gambit with such low odds of success that traders question its legitimacy, someone wagered $1.7 million that Bear Stearns shares would suffer an unprecedented decline within days. Options specialists are convinced that the buyer, or buyers, made a concerted effort to drive the fifth-biggest U.S. securities firm out of business and, in the process, reap a profit of more than $270 million.

Access archived page.

Posted on

Web: How Big is the Failure to Deliver/Naked Shorting Problem? Yet More Information

Web

How Big is the Failure to Deliver/Naked Shorting Problem? Yet More Information

Bob O’Brien

Sanity Check via Wayback, 8 August 2008

How big is the problem? I mean, we hear the now famous $6 billion delivery failure number tossed around from the DTCC, but how accurate is that, really? Is it a complete answer? Is there more information that is knowable?

The answer is, yes, more is knowable.

Access archived page.

Posted on

Web: Why The DTCC Is A Prime Mover In Securities Fraud and Naked Shorting

Web

Why The DTCC Is A Prime Mover In Securities Fraud and Naked Shorting

Bob O’Brien

Sanity Check via Wayback, 5 August 2008

To hear them tell it, they are powerless to deal with NSS, acting more as a vessel through which stock flows. They ignore that they are an SRO, chartered with regulating the business conduct of their owner/members. They pretend that they don’t become the intermediary, and thus the contra-party to the trade to both buyer and seller, and thus in full control of buying in failed trades (if they wanted). They pass self-serving rules that declare they can’t force a failing member to buy in the fail, even though they are chartered with ensuring timely clearance and settlement. And for years they have been claiming that NSS is basically a non-issue, while their press geeks and counsel employ mind-numbing doubletalk.

Access archived page.

THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?