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Article: JP Morgan Chase’s alleged manipulation of electricity markets detailed

Article - Media

JP Morgan Chase’s alleged manipulation of electricity markets detailed

Kevin G. Hall

McClatchyDC, 29 July 2013

The federal regulator of electricity markets on Monday accused Wall Street powerhouse JP Morgan Chase & Co. of using multiple trading strategies to manipulate electricity markets in California and the Midwest for profit.

The Federal Energy Regulatory Commission already had alleged in March that JP Morgan Chase was guilty of manipulating energy markets in California and the Midwest. But late Monday, after the close of financial markets, the agency made public the details in a Staff Notice of Alleged Violations.

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Article: Naked Short Selling and the Market Impact of Fails-to-Deliver Evidence from the Trading of Real Estate Investment Trusts

Article - Academic

Naked Short Selling and the Market Impact of Fails-to-Deliver: Evidence from the Trading of Real Estate Investment Trusts

Erik Devos, Thomas McInish, Michael McKenzie, James Upson

The Journal of Real Estate Finance and Economics, 27 July 2013

Naked short selling and purposeful fails-to-deliver have been identified in the popular press and by the SEC as contributing factors to the stock market decline in 2008. We investigate the market impact of the announcement that fails-to-deliver have occurred for a sample of real estate investment trusts (REITs). We find little evidence that this announcement affects returns or has any market manipulation ability. We find that fails-to-deliver are most consistent with a 1 to 3 days delivery difference between the short sale and offsetting covering trades. These results hold independent of the type of REIT (equity or mortgage REITs). Overall, our findings suggest that naked short selling and purposeful fails-to-deliver may not have contributed much to REIT losses during the financial crisis.

Paywall access to article.

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Paper: Naked Short Selling: Is it Information-Based Trading?

Paper

Naked Short Selling: Is it Information-Based Trading?

Harrison Liu, Sean T. McGuire, Edward P. Swanson

SSRN Electronic Journal, 21 June 2013

Citing a widely held belief that naked short selling is not based on company fundamentals, the SEC (2008) has substantially tightened Reg. SHO close-out regulations in an effort to eliminate naked short selling. Contrary to accepted belief, we find that accounting fundamentals are highly significant in explaining naked short sales. Further, naked short sales contain incremental information about future stock prices: Abnormal returns from a long/short trading strategy that buys (sells short) shares with low (high) short interest are more than seven times larger using naked and covered short interest, compared to returns using only covered short interest (15.2 percent vs. 2.1 percent annualized). Our findings show that recent actions by regulators to eliminate naked short sales are likely to impede informed arbitrage and reduce market efficiency.

PDF ( 41 pages): Naked Short Selling: Is it Information-Based Trading?

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Article: Gangster State America. “Naked Short” in the Gold Market

Article - Media

Gangster State America. “Naked Short” in the Gold Market

Dr. Paul Craig Roberts

Global Research, 13 May 2013

There are many signs of gangster state America. One is the collusion between federal authorities and banksters in a criminal conspiracy to rig the markets for gold and silver.

My explanation that the sudden appearance of an unprecedented 400 ton short sale of gold on the COMEX in April was a manipulation designed to protect the dollar from the Federal Reserve’s quantitative easing policy has found acceptance among gold investors and hedge fund managers.

The sale was a naked short. The seller had no gold to sell. COMEX reported having gold only equal to about half of the short sale in its vaults, and not all of that was available for delivery. No one but the Federal Reserve could have placed such an order, and the order came from one of the Fed’s bullion banks, one of the entities “too big to fail.”

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Web: The Lessons From Overstock.com CEO Patrick Byrne’s Gun Caper

Web

The Lessons From Overstock.com CEO Patrick Byrne’s Gun Caper

Gary Weiss

gary-weiss.com, 4 February 2013

I was appalled (but not surprised) to learn about Overstock.com CEO Patrick Byrne’s latest escapade: a couple of weeks ago, he was arrested at Salt Lake Airport trying to carry a loaded Glock handgun onto an airplane.

I was even less surprised by the revelation, buried in a police report, that he sleeps with the gun every night, ready to drill any intruding “miscreants” with .40-caliber, bone-shattering hollow-point bullets.

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Article: UBS Risk Management Fiasco Illustrates Hidden Big Bank IT Time Bombs

Article - Media

UBS Risk Management Fiasco Illustrates Hidden Big Bank IT Time Bombs

Yves Smith

Naked Capitalism, 11 January 2013

One of the sources of risk in big and even moderately big banks that does not get the attention it deserves is information systems. Having mission critical systems function smoothly, or at least adequately, is crucial to a major trading operation. Huge volumes of transactions flow through these firms, and the various levels of reporting (customer exposures, funds flows, risk levels, transaction and reconciliation failures) need to be highly reliable or things get ugly fast. Witness MF Global, where the firm was unable to cope with the transaction volume of its final days and literally did not know where money was at various points in time during the day.

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Article: Secrets and Lies of the Bailout

Article - Media

Secrets and Lies of the Bailout

Matt Taibbi

Rolling Stone, 4 January 2013

It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

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Article: The Federal Reserve Bank is Naked: QE 10T Dollar ‘Loans’ Swaps and Naked Mortgage Bonds of Quantitative Easing 1

Article - Media

The Federal Reserve Bank is Naked: QE 10T Dollar ‘Loans’ Swaps and Naked Mortgage Bonds of Quantitative Easing 1

Lan Pham

Economics Voodoo, 28 December 2012

The banking and financial crisis emerging in September 2008 is often called a global financial crisis, but to be more precise the data point to a crisis of the Western central banks. I referenced euros previously, so this is the euros companion to Quantitative Easing 0-1-2-3∞ & The Federal Reserve’s Love Affair with its Banks and Mortgage Bonds: Levitating The Black Hole. QE 0-1-2-3 is incomplete as concurrently the Federal Reserve Bank also entered into $10.06 Trillion in dollar ‘loans’ liquidity swaps with foreign central banks that we examine in Section I. Why QE $10T as we look at a few of Europe’s largest banks in Section II, which leads us to the $1.25 Trillion naked reasons behind the Federal Reserve Bank’s Quantitative Easing I purchase of phantom agency mortgage bonds that we revisit more closely in Section III.

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Article: The Bare, Naked Truth About The Federal Reserve’s Socialist Agenda

Article - Media

The Bare, Naked Truth About The Federal Reserve’s Socialist Agenda

Shah Gilani

Money Morning, 11 December 2012

The top line story, according to the FDIC’s latest Quarterly Banking Review, is that the majority of U.S. banks are in better shape today than they have been in years.

The untold story is that when the Federal Reserve is done transitioning the United States from capitalism to socialism, the few dozen banks that remain in America will all be profitable until they need bailing out again, but will never die and live on in infamy.

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Article: Is The Federal Reserve Using Money-Laundering Techniques To Cleanse Banks’ Balance Sheets?

Article - Media

Is The Federal Reserve Using Money-Laundering Techniques To Cleanse Banks’ Balance Sheets?

Lawrence Hunter

Forbes, 29 October  2012

Drug lords, terrorists and shadow-government operators (but I repeat myself) use third party intermediaries to cool off and sanitize hot, dirty, and therefore useless money into pristine-clean and productive money that can be used in legitimate commerce. It’s called money laundering.

Characters operating in the shadows also use a form of reverse money laundering to defile clean money or redirect dirty money while masquerading its source so it can be siphoned away, re-channeled and put to use financing illicit activities such as terrorism and off-the-books, shadow-government operations (but I repeat myself, again) that Congress won’t authorize or fund. Think of it as repatriating dirty money and expatriating clean money.

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Article: UBS rogue trader’s $2.3-billion ‘naked gamble’ nearly destroyed bank, court told

Article - Media

UBS rogue trader’s $2.3-billion ‘naked gamble’ nearly destroyed bank, court told

Estelle Shirbon, Michael Holden

Reuters, 14 September 2012

Former UBS trader Kweku Adoboli arrived at Southwark Crown Court in London Sept. 14, 2012. Adoboli, was arrested a year ago when a loss of $2.3-billion came to light, and was charged with fraud and false accounting.

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Fine: Fordham Financial Management Fined by FINRA

Fined

Fordham Financial Management Fined by FINRA

FINRA, August 2012

Fordham Financial Management submitted a Letter of Acceptance, Waiver and Consent in which the firm was censured and fined $10,000. Without admitting or denying the findings, the firm consented to the described sanctions and to the entry of findings that it improperly reported Execution or Combined Order/Execution Reports to OATS with a reporting exception code of “M.” The findings stated that the firm transmitted reports to OATS that contained inaccurate capacity codes.

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Filing: Anschutz Corp. v. Merrill Lynch & Co., Inc., 11-1305

Filing

Anschutz Corp. v. Merrill Lynch & Co., Inc., 11-1305

FindLaw, 14 August 2012

In a suit against Merrill Lynch and others, claiming market manipulation, fraud, control person liability, and negligent misrepresentation, district court’s judgment in favor of the defendants is affirmed where: 1) the market manipulation claims fail for the same reasons identified in Wilson v. Merrill Lynch & Co., which held that the same website disclosure at issue in this case contained sufficient information about Merrill Lynch’s support bidding practices to preclude a market manipulation claim; 2) district court properly dismissed the California Corporations Code claims as plaintiff fails to allege any injury or unlawful conduct in California; and 3) district court properly dismissed the negligent misrepresentation claims against the Rating Agency defendants as plaintiff fails to allege an actionable misrepresentation under New York law.

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Article: Barron’s Gary Weiss Caught Plagiarizing Matt Taibbi, Find-Replaces Style With Spin

Article - Media

Barron’s Gary Weiss Caught Plagiarizing Matt Taibbi, Find-Replaces Style With Spin

Patrick Byrne

DeepCapture, 7 August 2012

Two months ago a schlubby-but-savage Goldman lawyer named Joseph E. Floren made a mistake that caused some previously redacted information about Goldman Sachs to slip into the public’s hands. The event was ably covered by such globally-respected publications as Bloomberg, the Economist, and Rolling Stone.

Since May I have wondered, With the truth emerge at last in publications such as Economist, Bloomberg, and Rolling Stone, surely the Bad Guys must understand they have lost control of the narrative. Surely, I thought, they are working out some new damage control strategy to deflect or usurp the truth as it comes out.

And as always, Gary Weiss doesn’t let us down.

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THE DOLLAR HAS NO INTRINSIC VALUE : DO YOUR ASSETS?