Month: November 2010

Posted on

Article: Are the Feds Closing in on Billionaire Steven Cohen?

Article - Media, Publications

Are the Feds Closing in on Billionaire Steven Cohen?

As part of a high-profile insider trading probe, the FBI raided three large hedge funds Monday. Two targets of the raid, Diamondback Capital Management and Level Global Investors have ties to billionaire investor Steven Cohen, a renowned art collector and #87 on Forbes’s world’s richest billionaires list.

Cohen, manager of SAC Capital Advisors, is a giant in the hedge fund world and news of the probe is generating a lot of buzz in the finance world:

Read Full Article

Posted on

Fined: Goldman Sachs Fined by FINRA (November 2010)

Article - Media, Fined

Goldman Sachs to Pay $650,000 for Failing to Disclose Wells Notices

Nancy Condon, George Smaragdis

FINRA.org, 9 November 2010

The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Goldman, Sachs & Co. $650,000 for failing to disclose that two of its registered representatives, including Fabrice Tourre, had received formal notices from the Securities and Exchange Commission (SEC) that they were the subjects of investigations. Tourre’s “Wells Notice” was issued in connection with the SEC’s investigation of an offering of a synthetic collateralized debt obligation (CDO) called ABACUS 2007-ACI (Abacus).

Read full report.

Posted on

Paper: Choking the Recovery: Why New Growth Companies Aren’t Going Public and Unrecognized Risks of Future Market Disruptions

Paper

Choking the Recovery: Why New Growth Companies Aren’t Going Public and Unrecognized Risks of Future Market Disruptions

Harold S. Bradley and Robert E. Litan

Kauffman Foundation, 8 November 2010

We show here that ETFs are radically changing the markets, to the point where they, and not the trading of the underlying securities, are effectively setting the prices of stocks of smaller capitalization companies, or the potential new growth companies of the future. In the process, ETFs that once were an important low-cost way for investors to assemble diversified stock holdings are now undermining the traditional price discovery role of exchanges and, in turn, discouraging new companies from wanting to be listed on U.S. exchanges.

Continue reading “Paper: Choking the Recovery: Why New Growth Companies Aren’t Going Public and Unrecognized Risks of Future Market Disruptions”

Posted on

Book: Griftopia–Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi

Book
Amazon Page

Review by Robert David Steele

5.0 out of 5 stars 6 Star Game Changer….Maybe

November 2, 2010

This is an extraordinary book, combining gifted insights and turns of phrase with serious research that has a point worth fighting for: Wall Street led by Goldman Sachs has ripped off the entire US economy, and they still have most people thinking that politics matters.

Continue reading “Book: Griftopia–Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi”

Posted on

Article: The skinny on the 2008 naked short-sale restrictions

Article - Academic

The skinny on the 2008 naked short-sale restrictions

Thomas J. Boulton, Marcus V. Braga-Alves

Journal of Financial Markets, 1 November 2010

On July 15, 2008, the US Securities and Exchange Commission announced temporary restrictions on naked short sales of the stocks of 19 financial firms. The restrictions offer a unique empirical setting to test Miller’s (1977) conjecture that short-sale constraints result in overpriced securities and low subsequent returns. Consistent with Miller’s overpricing hypothesis, we find evidence of a positive (negative) market reaction to the announcement (expiration) of the short-sale restrictions. Announcement returns are higher for firms that appear to be subject to more naked short selling in the days immediately preceding the announcement of the restrictions.

Paywall access to article.

THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?