California readies to prevent blackouts, but threats remain
ADAM BEAM, 19 May 2021
California’s top energy regulators on Tuesday said the state is better prepared to avoid last summer’s rotating blackouts, but they cautioned the power grid of the nation’s most populous state is still vulnerable to extreme heat waves that could force more outages later this year.
State officials say they have acquired an additional 3,500 megawatts of capacity ahead of a likely scorching summer that threatens to increase demand beyond what the grid can handle. That includes an additional 2,000 megawatts of batteries designed to store energy generated from renewable sources — like solar — that stop working when it gets dark.
In general, one megawatt of energy is enough to power hundreds of homes, depending on how it is generated. Continue reading “Article: California readies to prevent blackouts, but threats remain”
Lessons from the Texas big freeze
Carl Pope, 24 March 2021
The Texas power market caps wholesale prices at an astonishingly high $9,000 per/mwh. When the crisis hit, the computers managing the market price crashed. Regulators then arbitrarily set prices at the peak rate, and left them there for four days, knowing that generators could not provide more power because their facilities were frozen. During the freeze, household daily utility bills of $2,500 and more were incurred by homeowners who had signed up for variable plans, even when for most of the four days they had no power. The City of Denton incurred $300 million in power bills in a week, $2,000 for each of its 15,000 residents.
The power companies maximised their profit from those units that were up and running. By the third week in February, it appeared all the energy companies serving the Texas market had made as much money in 2021 as they had in the previous three years.
“We were able to get super premium prices, that’s going to pay off handsomely like hitting the jackpot,” said Chief Financial Officer Roland Burns of Comstock Resources, a leading Texan energy producer. He later apologised when his remarks hit the headlines. Continue reading “Article: Lessons from the Texas big freeze”
James S. Chanos (born December 24, 1957) is an American investment manager. He is president and founder of Kynikos Associates, a New York City registered investment advisor focused on short selling. A noted art collector, he appeared on the BBC Four documentary The Banker’s Guide to Art.
Article: Save The Billionaire Short-Sellers!
Article: House Hearing On Gamestop Fiasco Will Focus On “Short Selling And Stock Manipulation”
Remember How Naked Short Selling Wasn’t a Big Deal?
How were more than 100% of GameStop’s shares shorted?
John McCrank, Reuters, 18 February 2021
But Vlad Tenev, broker Robinhood’s chief executive officer, recently pointed out that some of the stocks involved in the “meme stock” rally were more than 100% shorted, implying that more shares were shorted than were available to trade.
“I just think that’s pathological,” he said on the All-In Podcast late last Friday. “You end up with this situation that could destabilize the financial markets.”
Read full article.
Texas power consumers to pay the price of winter storm
Scott DiSavino, Stephanie Kelly, 18 February 2021
(Reuters) – Texas residents suffering a winter storm that has left millions without power are set to face a future challenge in higher utility bills, after the days-long cold snap put an unprecedented strain on the state’s power network.
Some 2.7 million households in Texas, the largest electricity consuming state in the United States, were without heat on Wednesday as freezing temperatures in a normally temperate part of the country overwhelmed demand, causing blackouts and widespread anger.
Wholesale power prices soared more than 300-fold, stirring memories of the price spikes that accompanied California’s energy crisis of 2000-2001, when Enron and others artificially increased prices. Continue reading “Article: Texas power consumers to pay the price of winter storm”
Explainer: How were more than 100% of GameStop’s shares shorted?
John McCrank, 18 February 2021
NEW YORK (Reuters) – One area of focus from a U.S. House of Representatives panel on Thursday will likely be on the role short selling played in the GameStop market mayhem.
Executives from trading platform Robinhood and hedge funds Melvin Capital and Citadel will be grilled following the retail-driven trading frenzy that sparked wild gyrations in GameStop and other heavily shorted stocks. Continue reading “Article: Explainer: How were more than 100% of GameStop’s shares shorted?”
Part 9 of Illegal Naked Shorting Series: The Risk/ Reward of Shorting Versus Buying Stocks is Extremely Unfavorable
Smith On Stocks, 11 July 2019
In this report, I contrast the risk and reward of shorting versus buying stocks. When you unravel the economics and risk/ reward of shorting, it is clear to me that this is a highly risky, low return strategy. As argued in this report, I see shorting as a losers game if employed consistently over time as opposed to buying stocks which is a winners game. I see shorting as a niche strategy that is applicable on a short term trading basis for a very limited number of stock trades. I think you will agree with me as I go through the major risk and reward elements of shorting.
Read full article.
See All Larry Smith Posts @ SNSS
Why Famed Short-Seller Jim Chanos Is Betting Against Burger King And Dunkin’ But Praising Chipotle
Maggie McGrath, 26 April 2018
The tale of two restaurant ownership models — wholly-owned and franchised — is translating into similarly divergent market performances for certain restaurant stocks Thursday. And much of the movement has to do with the comments of one short-seller.
Shares of Dunkin’ Brands and Restaurant Brands International (QSR), which is Burger King’s parent company, are in negative territory after Jim Chanos, the investor who famously shorted Enron, told CNBC Thursday morning that he’s taken short positions in both names. His reason: he is not optimistic about the future of asset-light, franchise-focused businesses. “[E]verybody wants to sell the restaurants and not own them but basically clip the coupon of collecting royalties,” he said. “And we’ve had this dichotomy now of restaurant stock multiples going higher and higher and higher as restaurants themselves have struggled. I think at some point that has to come to an end.”
Continue reading “Article: Why Famed Short-Seller Jim Chanos Is Betting Against Burger King And Dunkin’ But Praising Chipotle”
The Creation of Counterfeit Shares — There are a variety of names that the securities industry has dreamed up that are euphemisms for counterfeit shares. Don’t be fooled : Unless the short seller has actually borrowed a real share from the account of a long investor, the short sale is counterfeit. It doesn’t matter what you call it and it may become non–counterfeit if a share is later borrowed, but until then, there are more shares in the system than the company has sold.
The magnitude of the counterfeiting is hundreds of millions of shares every day, and it may be in the billions. The real answer is locked within the prime brokers and the DTC. Incidentally, counterfeiting of securities is as
It is estimated that 1000 small companies have been put out of business by the shorts.
PDF (12 Pages): Paper Counterfeiting Stock
Looting the Pension Funds
All across America, Wall Street is grabbing money meant for public workers
Rolling Stone, 10 October 2013
Raimondo’s strategy for saving money involved handing more than $1 billion – 14 percent of the state fund – to hedge funds, including a trio of well-known New York-based funds: Dan Loeb’s Third Point Capital was given $66 million, Ken Garschina’s Mason Capital got $64 million and $70 million went to Paul Singer’s Elliott Management.
The state’s workers, in other words, were being forced to subsidize their own political disenfranchisement, coughing up at least $200 million to members of a group that had supported anti-labor laws.
This is the third act in an improbable triple-fucking of ordinary people that Wall Street is seeking to pull off as a shocker epilogue to the crisis era.
Baker reported that, had public pension funds not been invested in the stock market and exposed to mortgage-backed securities, there would be no shortfall at all.
It’s a scam of almost unmatchable balls and cruelty, accomplished with the aid of some singularly spineless politicians. And it hasn’t happened overnight. This has been in the works for decades, and the fighting has been dirty all the way.
Union leaders all over the country have started to figure out the perils of hiring a bunch of overpriced Wall Street wizards to manage the public’s money.
Read full article.
In Pursuit of the Naked Short
Alexis Stokes, Texas State University
Journal of Law and Business 5/1 (Spring 2009)
This article explores the origins of naked short-selling litigation; considers
the failures of significant naked short-selling lawsuits in federal court;
surveys the obstacles erected collectively by constitutional standing requirements, the Federal Rules of Civil Procedure, the Private Securities Litigation Reform Act, brokerage firms, death spiral financiers, and the Depository Trust and Clearing Corporation; examines the efficacy of Regulation SHO, SEC rule 10b-21, and new FINRA rules; discusses recent state legislation and state court litigation; and identifies non-litigation options to curb naked short-selling. Ultimately, this article seeks to answer the question: If manipulative naked short-selling is more than a mythological scapegoat for
small cap failure, what remedies are, or should be, available?
PDF (62 Pages): Article In Pursuit of the Naked Short
Merrill Pays $15 Billion in Compensation After Taking $10 Billion in TARP Funds
Sanity Check via Wayback, 23 January 2009
After all, the logic, or rather the gun to the head of the taxpayer by Hank Paulson, was that the economy would vaporize if we didn’t take taxpayer money and give it to Wall Street banks and insurance companies, to, er, lend, or to relieve them of the burden of having to carry the toxic paper they created on their books any longer.
At the time, I said that was clearly a lie, and all this would be is a redistribution from the Treasury, to the Wall Street buddies of Paulson’s who got us into the mess in the first place.
Access archived page.
Bringing Down Bear Began as $1.7 Million of Options
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.
Offshore shell games threaten global financial system
The Komisar Scoop, 17 September 2007
There’s an astonishing article in the Washington Post’s Business Section (“Risk. Now They See It. Now You Don’t.“ Sept 16, 2007)
The Post, which has never, ever, railed against tax havens, is now suggesting that their use to cheat tax authorities and investors threatens the entire global financial system. Of course, it doesn’t put it so starkly, but that’s the gist.
Read full article.
The Story of Deep Capture
By Mark Mitchell, with reporting by the Deep Capture Team
The Columbia School of Journalism is our nation’s finest. They grant the Pulitzer Prize, and their journal, The Columbia Journalism Review, is the profession’s gold standard. CJR reporters are high priests of a decaying temple, tending a flame in a land going dark. In 2006 a CJR editor (a seasoned journalist formerly with Time magazine in Asia, The Wall Street Journal Europe, and The Far Eastern Economic Review) called me to discuss suspicions he was forming about the US financial media. I gave him leads but warned, “Chasing this will take you down a rabbit hole with no bottom.” For months he pursued his story against pressure and threats he once described as, “something out of a Hollywood B movie, but unlike the movies, the evil corporations fighting the journalist are not thugs burying toxic waste, they are Wall Street and the financial media itself.” His exposé reveals a circle of corruption enclosing venerable Wall Street banks, shady offshore financiers, and suspiciously compliant reporters at The Wall Street Journal, Fortune, CNBC, and The New York Times. If you ever wonder how reporters react when a journalist investigates them (answer: like white-collar crooks they dodge interviews, lie, and hide behind lawyers), or if financial corruption interests you, then this is for you. It makes Grisham read like a book of bedtime stories, and exposes a scandal that may make Enron look like an afternoon tea.
Introduction By Patrick M. Byrne, Deep Capture Reporter
PDF (69 Pages): Deep Capture Story