The recent move by the Securities and Exchange Commission to temporarily ban short selling has left a lot of people very angry, extremely confused, and demanding a logical explanation for why this fakakta plan went through. We were as shocked as you to hear it actually went down, especially after we’d sent a note to Charles Christopher Cox advising him to dick slap Lloyd Blankfein and John Mack back to the corner with their dunce caps on, when they went crying to the SEC chairman because the market had served them one measly down day. At first we thought it was merely a misreading on C-Cubed’s part, seeing the word “suck” where we’d written “slap.” Now we know it was no mistake at all.
And it’s not that Cox and Co. are pussies easily bent to the will of the almighty Goldman Sachs. It’s that they’re suckers for the those four little words: “but it’s my birthday.” Yes, people, the reason for this Long-Only-Suction is that today is Lloyd Blankfein’s 54th b’day. And knowing that Cox couldn’t say no to a birthday wish, LB laid it on thick. “I never thought I’d be a mid-life crisis guy but I’m just really, super depressed about this one.” “I look at the first years and I’d give anything to trade places with those little shits.” “What’s the point of buying a convertible with no hair to billow in the wind?” He pulled out all the stops. The others were added to give the impression of not playing favorites. We were not fooled. And as a Well-Played, LB, Well-Played, indeed birthday gift, we’ll be sending something over to 85 Broad today. But our usual panty-gram or Geoffrey Raymond original doesn’t seem right for the occasion. If you can think of anything better, let us know.
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
Bess!!!! You are busting out Yiddish now! Fakakta!!!! Oh shit, you are a fucking sniper this week!
in before the lock
Fuck this whole shit. I cant believe that there was not one person who could stand up to Hank fucking Paulson and his mission to save goldman at all costs. If Bernanke and Paulson had an iota of self respect then they would resign immediately.
I mean seriously, stocks can only go up and never go down? Why dont they just make a law and take a lead on Pakistan on this? Fuck this whole administration.
@3…what will Obama do?
i have lost all respect for the Bald Dude.
For the retail broker who wrote in saying most people just want to buy and hold stock, listen asshole – the market is NOT for someone to make money. It is for efficient allocation of capital. And folks who are good at allocating their capital to the right targets win (while the ones who are not lose).
You want this ban because you care shit about allocation of capital or people making money. You just want to shove some stock down someone’s throat to make your dime. Of course it helps is the shit you shove down increases in price. SO stop getting all fucking ‘small investor defense’ and shit.
Why not send him a copy of A Random Walk with a note that says eventually you’ll still get fucked.
any of the 800 no shorts have converts outstanding? that would make for some tough hedging …
and once again, i must correct bess’ yiddish. it’s “verkakte.” don’t think i forgot the “mench” the other day. i’m beginning to suspect you’re a shiksa.
Why not also fucking ban oil futures or like put a cap on oil future prices ($80 anyone??)
Oh I see, because goldman fucking sachs is long oil and how on earth can they ever be hurt. Fucking scumbags.
Bess, you are truly on a roll!
bess is on top of her game with her wit today.
@9 I’m telling you. Call BS. She is NOT of the tribe. It’s so obvious. She’s in her Yiddish dictionary right now looking up shiksa.
@10– because it’s blankfein’s birthday, that’s why!
For Lloyd’s birthday, send him a dead fish wrapped in a Lehman golf shirt so he knows that Dick Fuld sleeps with the fishes.
No need to remind him that he has the same initials as LEH
Who is the PR firm that suckered poor Suchita into this without knowing history?
Natural resources: the next generation
By Suchita Nayar
Sunday Sep 14 2008 16:10
FourWinds Capital Management, a €1bn (£800m, $1.5bn) boutique based in Boston focusing on commodities and natural resources, has moved into water-relatedinvestments.
Its London-listed Aqua Resources Fund, launched in July, will invest in corporations and projects targeting waste water treatment, water infrastructure and water conversion. It will zero in on small to mid-size companies round the globe and become a “significant” minority owner as well as investing alongside other limited partners in projects.
The fund is expected to attract investment mainly from European and Middle Eastern institutions, pension funds and insurers.
Suchita Nayar
Contributor at Hedge Fund Alert/Private Equity Insider
Greater New York City
Current
Contributor at Hedge Fund Alert/Private Equity Insider
Education
Columbia University – Graduate School of Journalism
Columbia University in the City of New York
Writing and Editing –Suchita Nayar’s Experience
Contributor Hedge Fund Alert/Private Equity Insider
(Writing and Editing industry)
Currently holds this position
leave a flaming bag of dog shit at his front door and ring the bell. how much is it going to take to get it past the doorment at 15cpw??? two grand? i’m taking donations starting now…
@9 http://answers.yahoo.com/question/index?qid=20070816211548AAksJkd
PIMCO to MANAGE RFC????
#6: It’s me, the asshole.
Please show me where I said I supported the ban. I am trying to figure out why high finance types think it’s a bad idea. So go fuck yourself, you fucking dick.
And if you think that brokers working for a percentage under management don’t care about clients making money, you are even more of a damn moron than you’ve already revealed.
@9,13…she spelled it phonetically. No one pronounces it with the V.
Go to the diamond district and ask a Hassid.
Bess is from Livingstein, she should know just as well about these things as anyone on 47th Street.
leave a flaming bag of dog shit at his front door and ring the bell. how much is it going to take to get it past the doorment at 15cpw??? two grand? i’m taking donations starting now…
GASBAG JR. JUST SAID “I HATE A GUY WHO BRINGS FACTS”
Suchita Nayar must douche with Triton Water and Fourwinds Vinegar in order to psych her up to write that shit. The FT should sack her just for the smell
@22…please go remove the pubic hair from your mouth and try pronouncing it then. It should make sense.
Bess is an obvious hedge fund bootlick. I hope this helps.
@25…spit.coffee.over.keyboard
#20, if you really STILL dont understand why it is a bad idea then serious, why dont you just open a used car dealership or something.
I quote you again – “The investing public, for the most part, buys stocks and holds on”
That is NOT the fucking idea of being involved in the market – to buy and hold on hoping everything keeps going up. Were you one of those brokers who was feeding FNM/FRE to his clients even though they ran a terribly leveraged opaque business model just waiting to crash? Why should ‘buying and holding’ those stocks be an admirable objective, whereas selling them short KNOWING that they were shitty business models be criminal? Just because more people do the former?
Quit the phony outrage against ‘hedge fund millionaires.’ You want sheep for investors – the ones who will buy whatever shit you dish out to them. It helps your business if the shit keeps going up in value coz then theh sheep dont ask any questions about YOUR ability to actually pick stocks. Everyone’s uncle makes money in a bull market when all stocks are going up. The short sellers are the ones who call out the folks who are making money with NO skill whatsoever.
So there. THAT is the vital function that short sellers serve. When all idiots are piling onto stocks to make money, they are the ones who call out the true losed. And hence, they are the object of hatred.
And just to be clear, I am one of those who has been supposedly hurt by the short sellers. I lost my job at LEH. and lookng back, it is people like Einhorn and Ackman (short sellers mind you) who were telling the truth and exposing the true value of the business whereas the management – at best – had not clue about what the fuck was going on.
SO I dont see your point. Why should these short sellers who exposed the flaws be villified? Just because you want sheep to always be long stock? And why dont you see their role in the marker? Because you only like good news and no bad news?
@29…wow, TGIF for you my friend.
Who is the PR firm that suckered poor Suchita into this without knowing history?
Natural resources: the next generation
By Suchita Nayar
Sunday Sep 14 2008 16:10
FourWinds Capital Management, a €1bn (£800m, $1.5bn) boutique based in Boston focusing on commodities and natural resources, has moved into water-relatedinvestments.
Its London-listed Aqua Resources Fund, launched in July, will invest in corporations and projects targeting waste water treatment, water infrastructure and water conversion. It will zero in on small to mid-size companies round the globe and become a “significant” minority owner as well as investing alongside other limited partners in projects.
The fund is expected to attract investment mainly from European and Middle Eastern institutions, pension funds and insurers.
Suchita Nayar
Contributor at Hedge Fund Alert/Private Equity Insider
Greater New York City
Current
Contributor at Hedge Fund Alert/Private Equity Insider
Education
Columbia University – Graduate School of Journalism
Columbia University in the City of New York
Writing and Editing –Suchita Nayar’s Experience
Contributor Hedge Fund Alert/Private Equity Insider
(Writing and Editing industry)
Currently holds this position
so it was ok when GS was shorting the ABX, while at the same time structuring synthetic CDOs where it (GS) bought protection on single name CDS on ABS from the actual SPV?
Happy B’day Blankfein! You sure know how to have your cake & eat it too!
-clueless
FT lets anyone in now . Triton, Agua , ??????????????
Hurry let’s get the UK stocks & the 799 in the US listed on choiceodds.com, betonmarkets.com, and betsson.com. Who would have thought online gambling sites would make a better market. Let’s get some bubbas to take the long bet.
Let’s just shut the whole fucking thing down and turn it over to our glorious leaders.
@ 29:
You really are a hostile jerk. I’m not trying to vilify shorts, I’m trying to understand what all the hubbub is about.
To answer your assumption, I didn’t own any FRE or FNM. The only bank stocks I won are WFC and JPM. I’ve taken hits in my portfolio, namely from ACAS and MIC, but I’m holding on.
I realize that I am less than slime to you fancy New York types, and I’m sorry to make you retch so with my putrescent presence. I guess you can bitch about my type while standing in the unemployment line with your colleagues in your shittily run bank.
@36…and the hits just keep on coming!
@29…will you be in the unemployment line and/or soup lines? Please advise.
#29: What are your thoughts on naked shortting (i.e. having the ability to “issue” and sell a limitless amount of a target’s stock)?
#29: What are your thoughts on naked shortting (i.e. having the ability to “issue” and sell a limitless amount of a target’s stock)?
sorry for double post
@36
Where did you win those bank stocks?
Do you honestly think the International Domestic Value Growth Micro Cap Large Cap Full Moon mutual fund that buys 500,000 shares of IBM just sits there waiting for it to grow like a second grade bean plant in the windowsill of Mrs. Blossey’s class?
NO! They reduce their risk. Diversification is not the only answer.
SPODE
Fuck retail brokers. you know who you are.
Spode. Nice fund name.
Just to enter a little levity for a Friday afternoon:
Watching a rerun of last night’s Colbert Report (I fell asleep early last night), he announced his guest would be Mario Bartiromo. He then said they wanted to have Jim Cramer, but, and I quote, “his head exploded”. According to Colbert, authorities are “still searching for his goatee”.
I think we should have a counter rule. In overheated markets, say ones characterized by “irrational exuberance”, establishing or increasing long positions should be prohibited.
But only in regards to certain companies deemed, perhaps by a monkey named “Ookie”, to be getting a tad bit ahead of themselves.
Just to enter a little levity for a Friday afternoon:
Watching a rerun of last night’s Colbert Report (I fell asleep early last night), he announced his guest would be Mario Bartiromo. He then said they wanted to have Jim Cramer, but, and I quote, “his head exploded”. According to Colbert, authorities are “still searching for his goatee”.
#36, if you STILL havent understood what the ‘hubbub’ about short selling is all about, then stay retail – shoving shit down poor blokes’ throats. Expressing short view is no different from expressing a long view. It is an important price discovery mechanism, actually for the better of the longs. You somehow seem to believe that only long trading should be allowed as most folks want to stay long (subtext: you sell long so that helps you.)
It is not your presence which is disgusting as much as the fact that you claim to be ‘broker’ and fail to understand why an fundamental part of the market important. I have been hurt by the market reactions yet realize that this is an important part of risk taking – you get hit sometimes. I am not crying for market manipulation just to save myself.
As far as unemployment dole is concerned – it was set up for retails like you and is funded with taxes I paid all this while. Dont worry, I am not unemployed and am still contributing so that retails like you can claim insurance later down the line.
I always thought you spelled פֿאַרקאַקט with an h
@36,
I’ve got a little sympathy for the Wall St. vs retial broker snobbery going on… but really, if you don’t know why shorting is so essential to price discovery and why price discovery is the ultimate purpose of the markets, then you have to ask yourself if you’re in the right line of work.
Was there a simultaneous ban on insider sales at the 799 financials in question? Seems like an opportune time for management and directors to dump shares.
Stockholders and managers of firms, whose interests lie in higher prices for what they own or manage, miss few opportunities to deride short sellers. As Holman Jenkins of the Wall Street Journal put it, “short selling is a business widely unpopular with everyone who has a stake in seeing stock prices go up.
Regulators, whose blunders short sellers frequently reveal by discovering fraud that escaped their attention, respond similarly. That combination of interests helps explain why, at various times, short selling has been banned in many countries, including England, France and Japan.
Such views are reinforced by accusations that short sellers hope for bad things to happen. Others misplace the blame for the association between short selling and falling stock prices, especially in a “crisis.” False comparisons, such as holding short sellers to a standard of perfect foresight, are also used to attack them. However, all of these attacks are misguided.
Short selling is part of the information-revealing process that Mises, Hayek, and others emphasized as the central aspect and advantage of the market process. In a world of uncertainty and change, information is the scarcest good, and short selling is an important source of additional information that would otherwise be lost.
Allowing short selling increases the number of people with an incentive to discover valuable information about firms’ prospects, by providing an added mechanism to benefit from information that turns out to be negative. When someone’s research or information leads them to negative conclusions about a firm, short selling allows them to communicate their less optimistic expectations to others and make a profit if they anticipate the direction the market will later come to agree with. That is, they profit only if they come to “correct” conclusions before others. In the process, they benefit others by revealing accurate information sooner than would otherwise be the case, reducing the mistakes people would have made from relying on the less accurate prices that would otherwise exist.
Negative information may not be as valuable as positive information for purposes of cheerleading, but it is just as valuable when people wish to make the best use of scarce resources. That is sometimes reflected in the observation that much of economics involves negative information — knowing some things not to do, rather than knowing what to do — especially in combating the trouble that arises from “knowing so much that ain’t so.”
There is no reason why information that might have negative implications for firms would only be revealed to or discovered by those who are already owners of a particular stock. To attack or restrict short selling is then to restrict the market’s ability to elicit and integrate all available information.
Restrictions on short selling are analogous to a voting process where there are only the possibilities of voting yes (owning shares) or abstaining from voting (current non-owners), but “no” votes (selling what you do not own) are impossible. People can vote yes, buying shares and pushing up stock prices, or those who previously voted yes can decide to go back to abstaining by selling their shares, lowering stock prices. But short sellers allow current abstainers to vote “no,” giving themselves the ability to benefit from their different views while benefiting others via market prices, without having to first own shares in a company.
Short selling, which allows profits to be made from negative information, is akin to another aspect of a competitive financial market — hostile corporate takeovers. Management groups who fail to make the best use of their company’s assets object to the prospect out of their own self-interest. But hostile takeovers provide a mechanism for even those investors who own no current shares in a firm to benefit from negative information. If a firm is poorly run, even someone with no initial position in a company can purchase shares at a price capitalizing its prospects under current management. By then accumulating enough shares, and taking over management, “takeover artists” can gain from eliminating inefficiencies and improving results. This expands the number of potential investors who have incentives to discover such negatives and “fix” underperforming companies.
Short sellers have been portrayed as heartless opportunists, benefiting from bad outcomes. But they are no different from doctors who profit from our illnesses, or teachers who benefit from our ignorance, or locksmiths who benefit from criminal acts. Further, one’s belief that future reality is more negative than others believe it to be does not change that reality. It simply conforms market beliefs more accurately to it, when short sellers are right — the only situation in which they can profit from their forecasts. Revealing mistakes is socially beneficial, and a far cry from just hoping for bad outcomes (just as parenting sometimes involves deflating children’s false hopes, not to harm them, but to help them make better choices).
What is called short selling in the stock market is common in all sorts of businesses. A farmer who sells on a futures market when he plants, before he has produced his output, does the same thing. So does a homebuilder or custom tool maker producing to order. And that knowledge is hardly new. As the 1909 New York State Commission on Speculation noted, “Contracts and agreements to sell, and deliver in the future, property which one does not possess at the time of the contract, are common in all kinds of business.” There is no reason why a practice commonly accepted in business, which participants must therefore view as beneficial, is somehow harmful to those participating in the stock market.
Regulatory opposition also indicates the positive consequences of allowing short selling. Regulatory agencies are supposed to prevent fraud, questionable accounting, and other management misbehavior. However, they often fail not only to prevent, but even to detect them. Short sellers who are betting their own money on being correct often uncover what regulators miss, as they did at Worldcom, Enron, Tyco, etc., showing themselves as more effective market policemen.
Regulators then object precisely because their inadequacy is revealed. In fact, their often ineffective regulatory oversight makes markets less efficient, by giving participants more confidence in stock promoters’ assertions than is warranted. But they try to make short sellers into scapegoats, allowing regulators to leverage their failure into further expansion of their powers, to combat short selling’s supposed evils.
Opposition to short selling also confuses correlation with causation. Selling short only lowers the price sooner than would otherwise occur. It cannot force the price down for long if the fundamental circumstances do not support it. Short sellers simply recognize negative information sooner. Their activity can begin the process of reducing market prices, but it is the negative information that causes stock prices to fall. And even when short sellers are wrong, they provide extra profit opportunities to those who expand their holdings at the temporarily low prices that result, a benefit ignored by those blinded by their exclusive devotion to “what’s in it for me?”
Opposition to short selling is often no more than objecting to its effects on a particular stock the opponent currently owns. The only principle involved is that of preventing any change that might lower the price of what one owns (which is then over-generalized, as the Luddites’ opposition to losing their threatened jobs to printing presses was dressed up as principled opposition to technology in general), ignoring the benefits to society from revealing more accurate information.
Short sellers are also attacked for allegedly spreading negative rumors that sometimes turn out to be false. But false positive rumors are regularly asserted by a far larger group who benefit by pumping up stock prices, from managers to brokers to financial talk show touts. But critics of short selling are only concerned about what they don’t benefit from. In addition, the consequences of all forms of potential misinformation are made more problematic by the belief that regulatory agencies actually protect investors from it, when they really don’t. Without that unwarranted confidence, investors who knew to be wary, or to trust only those who had earned superior reputations that they would put at risk, would be more accurately informed than they are now.
Short sellers are also criticized whenever they are wrong. But holding them to a standard of correct expectations is an impossible standard. No one has perfect foresight. People who buy stock are not always correct that it will go up thereafter. And even if they were, those who sold the stock to them would have to have been wrong in their judgment. Applying such a standard of perfection to short sellers alone is just a mechanism to attack them, not a serious idea.
Firms do not always stop their aversion to short sellers at negative attitudes. They often directly attack them. For instance, The Economist reported, “Not long before Tyco went bankrupt it was still buying full-page advertisements to campaign against short-selling.” Similarly, within a month of Biovail filing suit against short sellers for expressing negative opinions about it, the SEC announced an investigation which led to a settlement involving serious fraud charges.
Perhaps most telling about the assaults on short selling is a 2004 NBER study that discussed the fact that “Firms use a variety of methods to impede short selling, including legal threats, investigations, lawsuits, and various technical actions.” It revealed the high probability that firms attacking short sellers actually have something to hide, indicated by the fact that “firms taking anti-shorting actions have in the subsequent year very low abnormal returns of about -2 percent per month.”
Short sellers receive widespread condemnation. But it is undeserved. They are no more self-interested than others in financial markets. They improve the information incorporated in market prices that we all rely on to improve social coordination, as we seek to make the best of a world of unavoidable scarcity. The attacks against them are poorly thought out, and often come from those whose real abuses or regulatory failings short sellers threaten to uncover. It is time we stop selling short the short sellers.
For all the defenders of short selling (which I agree must be permitted if properly implemented), what about naked short selling? What is the justification for selling shares that do not/may not exist and how can you defend the downward pressure on share price that it can cause if done in a systematic way? I am asking because I really want to know what the arguments are in saupport of naked short selling.
Short selling is not inherently evil.
However, when you can bang a key on a computer, never have to deliver the shares, and can run quality solvent business such as AIG out of business, something has to be done.
I am a R.R. republican, however this shit has gotten out of control, and I don’t give a fuck how many hedge funds, shorties, and their ilk get run over and bankrupt.
You boiler room fucks, are the primary reason that the message boards on most stocks are filled with tripe.
Get bent.
Short selling is not inherently evil.
However, when you can bang a key on a computer, never have to deliver the shares, and can run quality solvent business such as AIG out of business, something has to be done.
I am a R.R. republican, however this shit has gotten out of control, and I don’t give a fuck how many hedge funds, shorties, and their ilk get run over and bankrupt.
You boiler room fucks, are the primary reason that the message boards on most stocks are filled with tripe.
Get bent.
Great. SO ban naked shorting (and I didnt see much protest on this board when that was done a few months back). But how does banning ALL short selling (as in now) make any sense?
You can also bang a key on a computer and go long! People ‘banged’ a few keys on some computers and pushed gold up by 11% in a day. 11 fucking percent for something which has no use and is just pure speculation (flight to safety, whatever). So why should people be allowed to do that?
And AIG is a fucking ‘quality solvent business’!!!!!!!! Do you even understand what a CDO is and what their exposure to it was? You think they went underwater simply because of short selling? Really? You actually want to comment on matter financial?
“But our usual panty-gram or Geoffrey Raymond original doesn’t seem right for the occasion. If you can think of anything better, let us know.”
How about a gallon of gorilla shit:
http://www.shitsenders.com/
(click the order page…they’ve got plenty of other fine products in stock and available for immediate delivery….
i have no problem with naked or covered selling or buying i agree with the (long winded) justification of 51 (was this from someone who used to write 52 page weekly market summaries?) i would also agree with the view that the spice boy and dementia struck presidential candidates have about as much chance of figuring this out as we have of paulson not being part of a christian scientist plot! we are a hearbeat away of banning all trading unless it is long, this is patently stupid. as far as the complex methods of avoiding tax used by AIG, the now loss of tax revenues from defunct and loss making companies, the 100′s of thousands about to hit the unemployment lines, the fact that us government CDS cost 25 bp..money market funds are now federal banks..well..the answer is simple and long term..come up with a plan that involves downsizing the pentagon to pre-bush levels.. house all those who are or will be homeless in houses that provide basic accomation, pay homeowners to upgrade..shuffle up and reward those people who didnt participate in this collossal fed reserve and GSE sponsored fraud ..and work the good bank bad bank system for all illiquid assets…the big picture is..stop bitching..the tax payer already owns the toxic debt and illiquid assets..the taxpayer owns the corrupt companies..just work on fixing the problem..get the right tax payers who have the big picture (including health, infrastructure, technology) in mind..acknowledge that tech bubbled and burst, the railroads and cars bubbled and burst..finance has bubbled and burst, commodities have bubbles and will burst and for christs sake (oops, buddhas/allahs) remember finance 101..it doesnt matter how assets are financed/bailed out..they will only remain assets while they generate returns..so anyway..get a dog, take the longer view and figure out what will actually raise living standards rather than waht drugs guns and overseas conquests can be used to reduce living standards..wave that flag someone
All the retards questioning the need to have short selling would do will to read this very small article.
http://online.wsj.com/article/SB122186704895358791.html
yes, even if you are fucking retail and only care about stocks going higher, funds buy and short in large volume to provide liquidity.
Just ban all trading!!! If you don’t want the price to go down and you don’t want the evil specter of bubbles hanging over your head, ban trading.
Ban the public markets. Make all investment private. Better yet, make everything state owned, comrades. Institute price controls – no bubbles, only shortages of goods in demand and oversupply of goods not in demand. If we’ve learned anything from the Euroweenie socialism and Soviet communism, it’s that this system leads to a much happier populations.
Ban naked short selling. Can’t wait until the SEC figures out who was buying credit default swaps and then shorting stock in the same companies in a systematic way. Those people my friends will be the real scapegoats here.