Mega Enron - Catastrophic Stock Meltdown? - Naked Short Selling

[Drogue]

Originally posted by Dauphin
In many countries banks are required to pay an insurance (or are party to a compensation agreement) to protect the first $xx,000 of any given account holder in the event of a bank collapsing.

i.e if you have an account with $10,000 in it and the bank collapses you will probably be protected up to a value of approximately $10,000.

In the UK it's £48,000 as a maximum, but full protection up to less than that.

But this isn't about banks collapsing, more hedge funds and other short sellers causing companies to collapse, by flooding the market and collapsing their share price.

[Drogue]

Originally posted by Darius871
To get back OT, anyone bored enough to summarize the slideshow?

Hedge funds and others are selling stock they don't have, and when it comes to settlement sending IOUs. This selling of stock that doesn't exist means effective supply rises, price falls and once it's collapsed, they can either then settle, or they can take the money and run, leaving these IOUs in place. Effectively they've created stock in a company without the companies knowledge, as it trades as normal stock. However the presentation doesn't mention what happens with dividends or voting rights.

However some shorting is actually legal, as long as you settle. You can sell stock t-20, wait 18 days, buy it t-2 and if the stock price has fallen in those 18 days, pocket the difference. I'll have to ask around at work about what happens in the UK with with failed trades, and whether hedge funds here do it.

[realpolitic]

Originally posted by chegitz guevara

Originally posted by realpolitic
I live in Hubodlt County, famous for it's pot, you'd be amazed at the money laundering operations here. In the county seat, Eureka, population 30,000, there must be 50 art gallery and boutique stores.

To be fair, Eureka has been something of a tourist place for a while. There's also a bit of an artist community there. Which might explain all the pot.

Actually, I spoke to a trustworthy ex-cop who's been here 35 years. According to him, the pot came in the early '70s. (I moved to Northern Cal in '76, and Humboldt wasn't the pot superpower it is today.) He said pot came here because of clearcuts, cheap land, and little law enforcement (before CAMP). The pot is grown around Garberville and S. Mendocino, 60 miles south, and their words are backed with AK47s, because of ripoffs in the late 80s, they still are quite xenophobic (except for tourists).

There are artists here because there's an environmental school here, Humbodt State, but their finacanceers are suspect. It's not nearly as touristy as it could be, because the Eureka City Council never misses an opportunity, to miss an opportinity. Being halfway between Portland and San Francisco, with these art shops, tourships wanted to come, but Eureka only has 2 public toilets, so they found it unacceptable. A German tour company tried years later, but the city council forgot to get insurance.


If anybody's bored with civ, and wants to play something completely different, try going to meetings of your local government, and try to convince them of things. I failed, I focused on winning over the swing voter, but I found it a fun experience. It helps to willing to lose or win, but played hard.

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In case some of you are wondering about the scifi show named Eureka, it's no coincidence. I spoke to an NBC producer (NBC owns scifi) and they almost filmed a 3 wishes segment last year, and Jim Carrey filmed a movie, 20 miles south in Ferndale. It's as weird as they say it is, although it's a combination of drooling bubbas (the Sherriff was found culpible by the US Supreme Court), the EPD is defying the Ninth Circuit and killed a woman who could have easily been talked down, slumlords; we also have HSU, with enviromentalists, methyl hydrate [energy]reasearch, and conspiracy theorists. What goes on here is too weird even for the scifi channel.

[Qilue]

At least it's never boring.

[Saras]

The whole presentation sounds a bit like wacko conspiracy theory. Plus the guy doesn't seem to get his facts right at times, although only on minor points can I point them out (BAWAG is an Austrian bank, not Swiss, "moscow hedge fund" is questionable since all moscow based funds are meant to invest in Russia, and I don't think the market tolerates naked shorts as prime brokerage risk management people would crucify their front desks if they let their hedge fund clients maintain continuous naked short positions of any dangerous size).

[Elok]

Originally posted by Darius871
Of course they are, that's like taking 80 minutes to say I should remove my pants prior to taking a ****.

...

You're on the internet. Not everyone online believes your ante-defecation pants-removal concept is, in fact, the way to go. And it would take far more than eighty minutes to persuade them otherwise. So don't make such quick assumptions.

[Dauphin]

Drogue, you at the FSA this summer? Let me know if there are any decent jobs going for a qualified forensic accountant. Want to know what the markets looking like at the moment.

[realpolitic]

Originally posted by Qilue


Stock brokers are like used car salesmen, not all of them are to be trusted.

This is not just about scamming a customer, a stockbroker who engages in naked shorting can destroy a multi-billion dollar corporation or the market. Anyone want to naked short Wal-Mart?

[Drogue]

Originally posted by Dauphin
Drogue, you at the FSA this summer? Let me know if there are any decent jobs going for a qualified forensic accountant. Want to know what the markets looking like at the moment.

I am I'll have a look around the intranet and see what's up. AFAIK they're always on the lookout for people with that kind of qualifications/experience. They're big on hiring atm - they're now regulating 10 times as many firms as they did 3 years ago, and needing to grow a bit to accommodate.