Sorkin is on Team Jamie. In his weekly column in the Times business section, Andrew Ross Sorkin sounds the alarm against the rumor-mongers attacked by JP Morgan Chase chief executive Jamie Dimon last night. But it’s not just spreading rumors that’s bothering Dimon, Sorkin and Lehman Brother’s chief Dick Fuld. They believe that there are speculators–short sellers at hedge funds–who have knowingly been spreading false rumors to create self-fulfilling prophecies that damage Wall Street firms.
As Felix Salmon points out over in Portfolio, the amazing thing is how vague and unsubstantiated these accusations against the shorts really are. In fact, they bear all the marks of baseless, fear-mongering rumors that they intend to indict.
“Where there’s smoke, there’s fire,” Dimon said. It’s hard to think of a better motto for a rumor monger.
Psst! Hear the Rumor of the Day? [New York Times]
Market Rumors: Inevitable [Portfolio]
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Are those executives suggesting that hedge fund traders might do something to advance the value of their speculative positions?!?!?!?
~The Forehead Slapper
The only thing you don’t short is Mayo.
Artie Help is a fag-hat.
Whether it happened to Bear or not, its no different than boiler room-penny stock-pump and dumpers creating false demand…and I’m sure it happens all the time.
Whether it happened to Bear or not, its no different than boiler room-penny stock-pump and dumpers creating false demand…only its on a much larger scale…and I’m sure it goes on all the time.
Whether it happened to Bear or not, its no different than boiler room-penny stock-pump and dumpers creating false demand,only on a much larger scale…I’m sure it happens all the time.
*click*click*click* WHY THE F won’t MY COMMENT POST — PEOPLE NEEEEEEEED to KNOW WHAT I AM THINKING *CLICK*CLICK*CLICK*
Google will make $3 trillion in profits next year. I have proof, trust me. Just buy it.
Now cart me off to jail. I clearly have only my own interests at heart.
http://jsmineset.com/cwsimages/inventory/58485_FR.htm1.jpg
Are we depressed yet?
Is it that bad out there?
How much liquidity is left these days?
Grinding your balance sheets into hamburger, and flagrantly violating the BIS charter using SIVs and other off-balance sheet devices to hide massive overleverage didn’t render banks insolvent.
Rumormongers did.
Jamie D is talking about smoke and fire today. Bess talks about fire too; I think she likes it.
Bess, I’ve changed my suggestion. Forget about Schwartzman’s house for now. How about if you set fire to Jamie D’s house instead?
Given the fact that SEC prosecutions had ground to a halt before the Bear Stearns’ meltdown, it’s hardly surprising that there hasn’t been a lot of enthusiasm at the SEC for pursuing a market manipulation theory of the destruction of Bear Stearns.
Why should the SEC suddenly show signs of regulatory life four months after Bear Stearns’ collapse? If anything, the current Administration is even closer to fleeing, leaving many federal agencies in disarray as they go.
The current situation is sad evidence of the break-down of the transparent operation of capitalism in a democracy. There’s no private civil action that can be pursued to uncover the secrets of the transactions prior to March 16. Suspicions will be harbored indefinitely. The SEC should act to pursue wrongdoers, if there are any, and to clear the air, if there aren’t.
IB’s and others who hold the toxic stuff off the books in secret places need to expose all the shitty details so everyone will know the extent of the mess. Until that happens, fear of the unknown will continue to drive the financial markets. I don’t care how bad it is; everyone should know so we can move forward.
Can somebody remind me how the rules go again? I must have missed the part where “if the stock price goes up it’s okay, but if the stock price goes down it’s criminal.”
I remember a classic line from a boxing commentator — one of the guys trashed talked and tried to intimidate most of the rounds to mess with the other guy….
commentator:
‘where there’s smoke, there’s more smoke’
trash talker lost. no fire.
I remember a classic line from a boxing commentator — one of the guys trashed talked and tried to intimidate most of the rounds to mess with the other guy….
commentator:
‘where there’s smoke, there’s more smoke’
trash talker lost. no fire.
bank_teller@5:13,
Conspiracies are done in secret, and they’re very difficult to prove. That’s why they’re called conspiracies.
I think that Dimon, Sorkin and Fuld should be commended and not condemned by DB posters for their ‘telling it like it is’ approach.
Disgruntled Long
I would just like to say “thank-you” to those on the DB board who miss the commentary by me and The Guy from Delaware. As someone pointed out the other day, I’ve been lurking in stealth mode. I still enjoy this site, regardless of the poor treatment at the hands of some of you frat-boy ass-wipes. I’m not sure where TGFD is. I’m presuming the beach. It was really, really dead here in Newark last weekend, a clear sign of beach-migration as we call it here in the First State. It’s been a little hot today. I hope you yuppy douchbags have a “hot time in the city!” Bite me!
The Other Guy From Delware (Full bore, in your face mode. Bring it, bitches!!!)
Who invited Suzie Orman into the posting.
Timmmaaay….Is that you?
@5:41& 5:44: Sit on it and twist, asswipes!
TOGFD
You are wrong here John- you are WRONG!
You can’t pump and dump
And
You can’t short and distort.
Can I libel you personally?
Can I slander you with impunity?
If I were to take a short position and then proceed to slander and libel the target- would that be ok with you?
That is what this is about:
-Shorting and distorting.-
You can’t yell fire in a crowed theater and you can’t short and distort.
This is a simple concept to grasp- yet you seem to believe that market manipulation on the short side is excusable.
It isn’t, and you should be ashamed of yourself for thinking that it is.
@7:50: That “can’t yell fire in a crowded theater” line always seems to be used in situations where it’s not appropriate, like now… because you CAN yell “Fire!” in a crowded theater IF THE DAMN THEATER IS ACTUALLY ON FIRE.
More generally, if it’s true, it ain’t slander.
“Rumourmongering” is only legally problematical if the rumour isn’t true *and the person mongering it knows or should know it isn’t.* Then, yes, commence with the laying down of the smack.
I agree with bank_teller… at heart everybody slamming shorts seems to believe that stocks just shouldn’t go down and anybody who makes money on it is some kind of Commie fifth-columnist. A long time ago, I asked the guy running the outfit that had my then-employer’s 401(k) plan about any opportunities for making money in a down market (gold funds, hedge funds, anything) and he looked at me like I’d just suggested that we take a flyer on the child-porn industry. I asked him straight out, “So what you’re saying is that you think we should only make money when the market goes up, and when it goes down, we should just smile and take it?” The monkey didn’t have an answer for me.
Needless to say I didn’t keep any money in the plan. Incidentally, this was right before the dotcom crash. Next annual meeting, he had some ‘splaining to do, Lucy. Not that I gave a damn.
M
TOGFD@5:40,
Glad to see you’re back “full bore” as you say. Some of us here on DB miss the Sex and Crazy that you and TGFD bring to the site. I wonder where TGFD is? Maybe he’ll come back too.
I just have to ask – Is he in there with you? If he is, let him out.
A few observations:
1) People long or with a stake in a company (e.g. C-level management) frequently bullshit about how great things are and how, despite ominous signs of problems or obvious overvaluation, their company is a great investment (e.g. dot.com in 1999). If they know better, how is this not the same as short sellers starting unfounded rumors.
2) If someone has good fundamental reasons to see a business as being overvalued I don’t see why expressing them is a crime (e.g. the shorts who brought down Enron). If a value investor found a great buy and touted it far and wide I don’t think anyone would be crying for them to be tossed in jail when it was discovered by the market.
3) Whenever I see management bitching about shorts driving a stock/industry down it makes me suspect that there are serious problems in that stock/industry. Otherwise why wouldn’t they present their case based on transparent fundamentals or better yet buy with their own money.
StMarc,
i was going to say you are wise beyond your years (no sarcasm either) but i realize i am biased. i had a similar 401(k) discussion recently.
Say that you expect a stock or the market to go down and people look at you like you are the lunatic fringe. Know why? It takes conviction and analysis.
Asset management is built on getting the masses to ‘buy and hold’ and eventually get robbed blind. Still amazes me that some people get paid 2/20 to manage 10 – 15 long only positions.
As far as the short selling witch hunt, “Pay no attention to the man behind the curtain!”
9:32: You are too kind.
This “buy and hold” crap is one of the greatest scams in the history of mankind. “Stocks always go up in the long run.” Well, as one of the worst of the bastards also observed, “In the long run, we are all dead.” Between costs and fees, inflation, taxes, and normal down moves/bear markets, a buy-and-hold strategy of sufficient length is 100% guaranteed, sure as water will wet us and sure as fire will burn, to lose your purchasing power. Period.
And don’t talk to me about Warren Buffett. I will grant you that BUYING WHOLE COMPANIES AND THEN MAKING SURE THEIR MANAGEMENTS DON”T FUCK UP BY WATCHING THEM LIKE A HAWK WITH AN IQ OF 200 is, technically, a buy-and-hold strategy. However, it’s not really an approach that Joe Schlub is going to be able to follow with a 401(k) full of mutuals. There are long patches where the market goes down and takes years and years just to get back to breakeven. You can’t tell people that. They won’t listen. And watch their faces glaze over when you try to explain that percentages losses are always worse than equivalent percentage gains.
Hope you didn’t spend the prime of your career earning years in a fifteen-year cycle up to a major down move, bub… hey, look, you’ve got exactly the same as you started with, only minus inflation! Whoopee! Let’s hear it for Dollar Cost Averaging!
Sorry. Ranting. Long day.
M
In summary:
1. This entire investing business is a big scam/casino in which only the house wins.
2. You should shout “fire” in a crowded theater if the theater is on fire.
3. Me thinks the lady doth protest too much to all the managers who complain about rumors.
4. The managers have the information to combat the rumors so simply saying “These are rumors” without disclosing the evidence/numbers to support the position is bullshit. Open up the books and disprove the rumors.