A couple of months ago I wrote about the temporary short selling ban. In summary, I think they are completely illegal and a big part of the reason the average investor needs to avoid day trading.
At the time of the post, the temporary ban was set to expire August 12, 2008. Part of the reason the ban was enacted was naked short selling was considered a big factor in the demise of Bear Stearns. Sure, they cooked their books and got burned, but those things normally wouldn’t cause the total collapse of the stock. It should have, under normal circumstances, adjusted to the lower value. However, for some mysterious reason, it didn’t. It totally collapsed. That collapse was fueled by massive short selling, naked and covered. The problem with that is no one really knows what the outstanding float of naked shorts is.
So, the SEC didn’t follow my advice and allowed the ban to expire.
Within two weeks, Lehman Brothers and AIG collapsed as well. Coincedence? Look at this:
That’s the short positions over the last year. Now remember, that 80 million short positions at the end of August does not even include whatever naked short selling was occuring. Those just don’t show up.
The price of AIG corresponds exactly opposite of the short positions for the same twelve months.
Now, sure, the value of that company was expected to go down. It was even expected to go down drastically. The news was awful and has been for about three years. So, that leads to my point. Why would anyone buy their stock over the last year in the first place? I mean, give me one headline since August 2007 that would encourage anyone to buy it. Hell, they were doing an average of 15 to 20 MILLION shares a day during that period. Some days hit 100 MILLION shares. Who was buying all those shares as the price plummeted pretty much every single day for a year?
That folks, makes no financial sense whatsoever in the normal world.
I would guess a huge percentage of those “buys” were naked shorts covering their positions.
Now, this is where things get screwy. I’m sure a fortune was made by those people naked short selling at the expense of AIG. And, eventually, the average taxpayor. However, there’s no guarantee at all that those profiting from the naked short selling of AIG were even citizens of the US. So, it can easily be argued that the Bin Laden family, living in Saudi Arabia, investing the profits they make from raping the US at the gas pump, made a million bucks destroying AIG. Sure, it can’t be proven since brokers dealing in naked shorts don’t have to report those positions to anyone.
Well lo and behold, with the public screaming for more regulation over the financial markets, the SEC has permanently banned naked short selling. Well, they are sort of. They are invoking the T+3 rule in a harsh way. That means you can’t buy a naked short and sit on it until you see fit. You better pile on when the going’s really bad for a stock to make any money.
Now, the hard T+3 rule is a good start. However, I’d prefer they just make short selling cash only. For that matter, I still don’t understand the logic that even allows short selling in the first place. I think I’d like to see how the market would work if they made it so that you bought a stock, and then sold it. Pretty Republican concept dontcha think? ( Otherwise known as “Keep It Simple, Stupid”. )
In a fair competitive market environment, I think you’d see a LOT more people get back into the market. As it stands now, the average person is a lot smarter to avoid it.
Get the new SEC rules here in PDF format.
I’m now reading that this might be another temporary ban that expires October 2. However, the article is not distinguishing between normal short selling and naked short selling. Hopefully the temporary ban only applies to short selling only. There is no justification at all for naked shorts.
I got to read this in the New York Sun:
Time wrote an article on Greenberg’s demise with AIG in 2005. It basically attributed his demise to arrogance. Which, if one considers the personna of Spitzer, would make it a pissing contest between two massive egos. However, with only the slightest of efforts, Googling AIG Spitzer and clicking past today’s headlines, one finds that Spitzer had a ton of dirt to work with. This wasn’t just a case of clashing egos. Things were bad at AIG and the symptoms were evident. Shareholders were suing AIG for basically fraudulantly cooking the books. That’s not an ego thing, that’s a legal thing usually used to bilk shareholders when things aren’t as rosy as the CEO is reporting. In this case, that was Greenberg. So, what the New York Sun is saying is it is better to break the law than it is to face the music.
Here’s the reality for the New York Sun, with or without Greenberg, it was only a matter of time before all the books cooking fell apart. It started falling apart in 2005. That’s when the New York Sun should have been pointing fingers. If they had, then they would know now that Eliot Spitzer did exactly what any AG would have been expected to do and investigate the criminal charges AIG’s own shareholders were claiming. They would know now why so many people were wary of AIG. And, they would know now why claims that Eliot Spitzer has any blame in this fiasco are completely laughable and makes the New York Sun look like complete blithering idiots.
The fact that it took forty years to accumulate the debt load AIG carried should have been an even simpler clue to the New York Sun.
How much do editors at the New York Sun make again?
18
Sep
A lot is being written about John McCain’s sudden lurch to regulating the financial markets. This does contradict his earlier history of fighting over-regulation. And, quite frankly, I think it’s a tactical error. While appealing to the masses initially in a knee-jerk manner, it creates contradictions he’ll have to answer to. And, it’s not necessary. His gut instinct, in my opinion, is the correct response. It’s too much government interference that has us in this mess in the first place. That’s not a popular view right now. But, it was, in my opinion, the incentives of the last two Presidents, urging equality for all borrowers, that neutered Fannie Mae, Freddie Mac, and the large institutions into dumbing down loaning practices that had worked and made sense for the previous fifty years. If AIG, or whoever, turned down a black person living in the slums of Detroit, they ran the very real risk of getting hammered and possibly prosecuted for discrimination. The underlying principal to sound lending practices IS discrimination. You remove that element, you have no logical foundation to loan money. Sure, they could discriminate on credit score, which has turned out to be about the only mechanism left, but that is very easily manipulated as about fifty commercials an hour on XM radio will tell you.
So, McCain got it half right. The fundamentals of our economy are strong. There’s just too much of it to take a serious hit. However, his answer should have been a little more thought out and played to his strong suit. It was the over-regulation and interference that led to this mess and if left alone, legally, the markets would have been able to manage themselves or collapse before they got too big to do so. This is a market adjustment that has been long expected for a variety of reasons. I’m not shocked. Not even a lot surprised. The expoding values in certain markets were not supported by the economy. Reverse-mortgages and sub-prime lending in those areas were supported by neither the true value of the construction or the economy of the locality. The Dow Jones and NASDAQ were trumped up by a bogus rally in the late 90′s and never really settled back down to a pre-bubble level. In other words, a lot of things were inflated for no logical reason.
This is that adjustment. We are still paying for the Clinton faux-bubble.
That is the answer I would have given that I think fits a little more closely with the Republican agenda. And, I think it fits a lot more closely with what I expect from McCain than the answer McCain is giving now. Sure, it wouldn’t have been too popular of an answer right now, but it wouldn’t have given Obama fodder as well as giving people something to actually chew on.
The whole point of the Libertarian Party has always been about smaller and less intrusive government. However, when it behooves them, they’re more than willing and ready to use the weight of the government to impel their personal beliefs. Sure, Barr has a fine-print issue to press. However, the reality of the situation is most people have committed to their candidate. Even if he wins his lawsuit, which he won’t, then it would only create the hugest mess you could dream of on election day as they would have to count millions of write-in votes. And, given the anymosity created by stripping people of their right to choose, would guarantee Barr wouldn’t get nearly what he would have gotten before this ill-thought and mean-spirited lawsuit will create.
17
Sep
I’m getting tired of Hollywood peeps tainting their onscreen personnas by getting too political. The point of a Hollywood actor is to make us assume they are what it is they are portraying. When they become overtly political, and in a personal way, it just makes it very difficult for me to see them in a movie in a completely naive way that would allow me to allow them to completely become the character they are portraying. This list of course, will start as things pretty much are now. I’ll add names as events occur and memory serves me:
- Michael Moore – His movies were fun. His politicals incredibly mean-spirited and biased.
- Chevy Chase – There never is a need to “decimate” a candidate. It’s not his first comment to offend me, just the worst.
- Rosie O’Donnell – Her politics are so overt and so harsh I will never be able to see any humor in her.
- Roaseanne Barr – Her shows were kinda fun with some political views expressed. That was OK. Lately she’s gotten just plum weird.
- Matt Damon – Playing various characters to perfection, he was becoming an A-list actor. Now, I just see him as the actor-moron that he is. And, unfortunately for me, always will.
- Whoopi Goldberg – She’s always seemed kinda out there. Her stint on “The View” has just hammered home how far out there she is. Whereas she used to seem like a voice of moderation in the racial issues, she now seems quite racist to me.
- Jane Fonda – That’s a given.
- Charlie Sheen – It’s not so much his liberal politics as his just bizarre left-wing opinions that border on schizophrenic.
- Barbara Streisand – Never have liked her. Ever.
- Pamela Anderson ( Lee-Rock-Lee-Rock-Rock ) – Never thought she was entertaining. Unless you consider her constantly-changing boobs. She makes good home movies tho. Kinda odd that she thinks Sarah Palin should “suck it”. Now, the problem with Pamela is people aren’t terribly sure if she was insulting Sarah Palin or giving her advice on how to quit cranking out so many kids. She’s definitely better at the latter than the former. Either way, that and her efforts for PETA just turn me off.
- Arnold Schwarzeneggar – His naive appeal that just screamed in his movie characters is gone. Not so much in anything bad he’s done, it just is.
- Fred Thompson – Never really concerned myself with him too much anyway. Now I’ll just see a bored political candidate.
- Barbara Walters – I used to view her as a straight-up reporter. Now, I realize I was obviously wrong.
- Sean Penn – He made his fortune playing a stupid stoner. He should have stuck with that. His political rants just reinforced a lot of people’s ideas of what happens to those stupid stoners in high school when they grow up. It pretty much slam dunked the medical opinion that pot makes you crazy.
First, look at these two graphs:
That’s what the Dow Jones Industrial Averages did under Bush, before Pelosi took over Congress.
That’s what the Dow Jones Industrial Average has done SINCE Pelosi took over Congress.
Now, read this:
OK, let’s follow this logic then. The failed economic policies of Bush according to Pelosi get the blame for the recent downturn. Of course, using that logic, the the failed policies of Bush get the credit for the preceeding six years of economic growth. So, SOMETHING must have changed about a year and a half ago.
Gee, wonder that it was?
It wasn’t John McCain, he was there during the six year growth. And, for that matter, the boom of the late 90′s as well.
So, can you believe Nancy Pelosi telling us that John McCain is lying, or the very obvious numbers her tenure has produced.
You won’t see those charts on MSNBC, CNN, or anyone else for that matter.
Charlie Rangel, who everyone has to love, is in a little trouble with the IRS, and possibly the FBI I would imagine. The FBI just usually sort of comes along with the IRS. Here’s the abbreviated list of what he’s in some doo-doo over:
- Rangel’s papers over the past 10 years show no reference to the sale of a home he once owned on Colorado Avenue in Washington.
- The details of a property bought in Sunny Isles, Fla., are bewildering at best. The stated value changes significantly from year to year, and even page to page, from $50,000 to $100,000 all the way up to $500,000.
- Some of the entries for investment funds fluctuate strangely, suggesting that the person either didn’t have accurate information or didn’t fill out the paperwork correctly.
In addition, an ethics committee is investigating other unrelated issues that deal with:
- rental of three rent-stabilized apartments in his home district of Harlem,
- his use of official congressional stationery to try to find private donors for a college center named after the lawmaker.
Rangel has supposedly paid back everything he owed to the IRS. He’s now blaming the Republicans for having to do so.
My friend over at L’Ombre de l’Olivier wrote a very insightful post that merits MSM recognition. But it won’t happen. Here’s the meat. Look at the salaries the three major candidates pay their staff:
| Senator | Male Employees | Female Employees | Average Male Salary | Avg Female Salary | Salary Difference (F/M %) |
|---|---|---|---|---|---|
| Biden | 15 | 25 | $85,144.80 | $55,922.33 | 65.68% |
| McCain | 17 | 25 | $53,259.36 | $55,958.67 | 105.07% |
| Obama | 27 | 30 | $56,298.75 | $45,070.09 | 80.06% |
Only one number really merits looking at. John McCain is the only candidate that pays women more than men. The most egregious sexist is Joe Biden, where women make 2/3 what the men do. A fairly distant second is Obama. Obama’s 25% behind McCain. Palin’s staff is not readily available. However, she’s the only one of the four that does not have total control over who the staff are or what they are paid. In the case of the Senators, it’s 100% the decision of the Senator. I also found it a bit odd that the freshman senator had substantially more staff than either of the very experienced senators. But, I digress. It’s obvious the Democrat candidates, especially Biden, represent that glass ceiling that feminists have been fighting for fifty years. Women obviously are obtaining lesser positions, less able to move to higher positions, and therefore make less money. If they want to get ahead, they would work for McCain.
So, who do you suppose feminists such as Gloria Steinem are attacking?
Why, Sarah Palin of course. They aren’t even bashful about it. They are calling her everything from a dominitrix to sexually repressed. If you want to go to Salon and check it out, have some fun. I’m not linking that garbage.
Now, what’s really amazing to me is apparently these “feminists” have become the glass ceiling they claim they’re fighting against.
What’s doubly amazing to me is Obama is having problems convincing some blacks he’s black enough, and now Palin can’t convince some women she’s woman enough. Of course, being the exact opposite of Hillary Clinton, who wasn’t woman enough either, I’d sure like to know what their definition of “woman” is. Then of course, John McCain has had the real challenge of proving he’s conservative enough. Joe Biden has the easiest way to go. He just has to prove he’s not Joe Biden.
It just strikes me that national elections are not so much about what we desire in a candidate as it is how much we dislike “the other side”.
Sarah Palin has done it all in regards to being a woman. She shattered the male establishment in Alaska. She shattered the expected all-male club that are presidential elections. This election has not been the same since she showed up. In the meantime, she’s born four kids and convinced her rugged outdoorsman to be a stay-at-home dad. And, she has done that by being a woman, not considering it a hindrance in any way. Now, to put that in perspective of what the Gloria Steinems want is impossible. Gloria Steinem couldn’t get elected dog catcher in Wasilla because her extremist views and sexual discrimination practices would alienate 50% of any election. And, her rigid liberal principals would alienate probably another 25% of what’s left. This election is outing them in the most obvious light possible. You’ve got two candidates that represent what Gloria Steinem and her legions have fought against for her entire adult life. She would rather they succede than support a fellow woman with different political values.
Just drop the feminist charade and admit what they truly are. Liberal lesbians.
It’s really pathetic that in order for a woman to reach the second most powerful position in the United States, she has to fight a bunch of women who claim they represent women’s rights and for some unfathomable reason, get paid to represent values that most women don’t respect. Party affiliation knows no sexual preferences. It is an arena that should, and is quickly becoming, asexual. It won’t acheive that until “feminists” decide that they are truly fighting for. If party affiliation trumps gender, the “feminist” movement will succeed in spite of the “feminists”. It would just happen a whole lot faster if “feminists” didn’t discriminate so much.
That goes for race, religion, age, and ethnicity as well.
Where have I heard that before?
12
Sep
For the second time in a week, Obama’s got another loonie on his side:
That’s right, Boy George is behind Obama 100%. He even put together a video for his “Yes We Can” music tribute to Obama:
Now, I have to like this video since it features David Bowie from the get-go. You know, the rocker that ch-ch-ch-changes. But I don’t. From that point on, it features a lot of characters I’m not so sure really helps Obama much. Like Amy Winehouse for example. And, it makes absolutely no sense at all.
Once again, I think this probably doesn’t get him any votes that he wouldn’t have gotten already. And, it hurts with the celebrity status problem as well as the, shall we say, “liberal” stereotype that conservatives don’t think too much of.
And, once again, he is endorsed by someone who can’t even vote. Boy lives in England. He can’t even come here because his visa has been revoked.
Matt Damon had this to say about this year’s election:
“It’s like a really bad Disney movie, “The Hockey Mom.’ Oh, I’m just a hockey mom from Alaska, and she’s president,” said Damon. “She’s facing down Vladimir Putin and using the folksy stuff she learned at the hockey rink. It’s absurd.”
Of course, Damon’s referring to the fact that both Putin and Palin are avid large game hunters and both can handle a rifle. Peeps who can handle large rifles and are not intimidated by killing large animals share a kind of bond. They also usually don’t think much of people who want to take their guns away. Needless to say, I just don’t see Obama or Biden “facing down” Putin. Palin will just take Putin to Alaska with her, which looks a lot like Russia, and after they’ve taken out a few moose, I’m sure they’ll be tighter than Obama taking him to Chicago to do some community organizing would ever accomplish.
Matt goes on to say:
Damon said the public needs to know more about such things as her views on creationism and censorship
They most certainly do. The misperception out there seems to be that she pushes creationalism and censorship. The reality doesn’t support either. Sure, everyone’s entitled to their abusrd opinions, but acting on them is a totally different ballgame.
He then wraps it all up by worrying about putting his foot in his mouth.
