Blog on the Run: Reloaded

Wednesday, November 4, 2009 11:16 pm

Interesting

Filed under: I want my money back. — Lex @ 11:16 pm
Tags: , ,

Zero Hedge points out an, ahem, interesting pattern:

  • Goldman Sachs has lost money in its trading on precisely three days in the last two quarters.
  • On an unprecedented 116 of 194 trading days so far this year, Goldman Sachs has made $100 million or more.

ZH adds:

Is this a ponzi scheme? We surely don’t know absent additional information (which will never be forthcoming, despite that GS is a public company). Is this comparable to the returns generated by a ponzi scheme? Absof—–lutely.

Say it with me, kids: Rigged. Game.

Thursday, September 10, 2009 8:13 pm

Cap, not trade

Filed under: I want my money back. — Lex @ 8:13 pm
Tags: , ,

Sorry; this has nothing to do with the environment.

Since the government started shoveling money out the door to the financial industry about this time last year, people have been worried about the effect on deficits and the national debt. That worry, of course, only accelerated with the automaker bailouts and the stimulus package.

But here’s the thing. The national debt is capped by law, currently at about $12.1 trillion. The White House wants that limit raised to $13 trillion. Congress has to do that or the government could go into default, unfortunately, but you can send a message of concern about this long-term problem by signing this e-petition at Zero Hedge opposing raising the national-debt cap.

But, Lex, you might ask, aren’t you being inconsistent by signing such a petition? In the short term, yes, although I would argue that that inconsistency could be eased a great deal by cutting spending. I’ve run just enough of the math to know that this wouldn’t make up $900B, but I’d at least start with what we’re spending to be in Iraq and Afghanistan.

Long-term, this ever-increasing debt spells disaster.

Tuesday, September 1, 2009 8:54 pm

Numbers don’t lie, but sometimes stock tickers do

Filed under: I want my money back. — Lex @ 8:54 pm
Tags: ,

Shorter Zero Hedge to Citi: If no one, not even high-frequency-trading computers, wants to buy your stock, that’s because it’s way overpriced.

Thursday, August 27, 2009 8:16 pm

Not just a fine. Time.

Tyler Durden of Zero Hedge on Bank of America’s legal problems — and, possibly, BofA’s lawyers’ legal problems — regarding what it told (or didn’t tell) its shareholders about the Merrill Lynch takeover:

The bottom line is that either Bank of America’s executive committee, or as the [Securities and Exchange Commission] claims, the lawyers advising it

… whom Durden identifies as the firm of Wachtell Lipton in general and partner Ed Herlihy in particular …

were responsible for one of the most blatant public filing misrepresentations in history. A $33 million slap on the wrist which comes out of BAC’s troubled investors and, by [extension], taxpayers, is a ludicrous way to “punish” those responsible. The Attorney General must see through the smoke and mirrors of this scam and has to seek criminal punishment for whoever ends up being the responsible party in this “hot potato” blame game.

Word. If we’re going to have long-term economic stability, we need to unrig the rigged game that investing has become, particularly when taxpayer dollars are involved. And the best way to do that is by packing the riggers off to prison, rather than looking the other way, as the SEC usually does, when huge crimes are committed.

Karl Denninger identifies another likely case (h/t: baum):

I [ran a search for] the highest-volume stocks with prices over ten cents (to exclude the little penny pumper stocks on the OTC market.)

Well gee, let’s add this up!

That would be about 2.126 billion shares in total for these four stocks, two of which (Fannie and Freddie) are so far underwater in their equity value (to the government no less!) that there is no chance they’re worth anything, yet they remain listed, and the other two are zombie banks with Citibank existing only because of $300 billion in asset guarantees by The Fed and Treasury (which, incidentally, is under investigation, and that assumes that the $300 billion is all there is. There is persistent chatter that the real amount of “back door support” that Citibank (C) has is closer to a cool trillion dollars, although I’ve never been able to get anyone to speak on the record in that regard.)

But I digress.

Here is the NYSE Volume for Tuesday – for all shares, right off NYSE Euronext’s page:

So let me see if I get this right. 2.126 billion shares traded in four stocks, two of which that accounted for some 900 million of those shares are in companies that by any measure of accounting have absolutely zero common equity value whatsoever (and never will under any rational view of the future), yet NYSE Euronext continues to list them.

These four stocks represented thirty seven percent of all shares traded Tuesday. …

If there was ever an argument to be made for the NYSE having turned into a gigantic “hot potato” parlor game, this is it – in your face in an impossible-to-explain-away fashion.

NYSE Euronext, of course, derives a fee from each share traded, so they have to love this sort of thing. The ordinary investor who has a brain sees it as an amusing sideshow, but the unfortunate fool who gets sucked into the maelstrom is going to get destroyed when the computers move on to some other issue and the price collapses as there is no authentic bid out there for any of this crap.

Beware. This is the sort of cheap parlor game that our capital markets have turned into as a direct and proximate result of our so-called “regulators” turning a willful blind eye while supposed “improvements” in liquidity and “customer access” are put in place by those who have one singular purpose in mind – find a way to steal a fraction of a penny at a time by playing “hot potato” with a handful of issues (sometimes starting a nice juicy rumor to go with it, aka the one last week about BAC allegedly being taken out by Goldman just to prime the pump a bit!) hoping that you will be the bagholder upon whom they can unload.

I certainly hope the companies that manage my (now significantly depleted) retirement and college savings know what the hell’s going on and are acting accordingly.

And this, too, has to be a crime, yet the government does nothing about it.

And on a philosophical level, how can anyone possibly call this anything approaching a free market?

And if no one can, then why aren’t the advocates of free markets screaming bloody murder about this? Is it because they don’t get it? Is it because they’re hypocrites? Or is it because they think they’ve got an edge in this rigged game, that when the music stops they won’t be “the bagholder upon whom they can unload”?

They need to stop kidding themselves. There is nowhere near enough room to keep every free-market advocate in this country, myself included, safe from exposure.

Saturday, August 15, 2009 12:45 pm

On the Internet, everyone knows you’re a bear

indexzerohedge

I’d probably be happier if I didn’t read Zero Hedge. But on the basis of how what they’ve said has panned out this year, I’d also probably be a lot less well-informed, too.

Friday, July 24, 2009 7:14 am

Thought for the day, finance version

Filed under: I want my money back. — Lex @ 7:14 am
Tags:

On a good day, I understand only about 40% of what I read at Zero Hedge, and of the 40% that I understand, about 99% frightens me a great deal.

That said, you need not be a finance geek to understand this Zero Hedge post, which is a quite trenchant critique of what passes in this country these days for financial journalism.

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