Southern California Real Estate Bubble Crash Blog

7 Responses to “Still think there’s no conspiracy?”

1. solar power says:

   March 18, 2009 at 11:06 am

   Great video, eye opening
2. Nick says:

   March 18, 2009 at 2:36 pm

   I’m not sure I buy some of the implied and stated conclusions in the video. I’m sure there was some manipulation going on, but I’m not as convinced that the operations were as completely fraudulent as implied.

   For example, the video insinuates that the short purchased just before Bear Sterns collapsed would have been insane without insider information. However, later testimony stated that volume of trading was already ramping up, presumably prior to public announcements, most investors already knew banks were lying about their capital, and there were obviously disclosures and revelations going on around that time. It would not seem necessarily insane for a hedge fund to buy a lot of short-term put options before a major announcement, betting on the downside. It would also not be unheard of for there to be an abnormally high amount of IOU’s proportional to the huge increase in trading volume in the days following, but that’s not real stock supply: as the video says, the participants are usually not even aware that they don’t have real shares, and it would be criminal (and nobody is alleging that it occurred) to have sold those shares multiple times. It’s suspicious, and certainly should be investigated, but it’s not de-facto illegal or proven as a concerted fraud effort, as stated in the video.

   It was fascinating to watch, but I’d recommend some salt with it, certainly.
   • Chuck Ponzi says:

     March 18, 2009 at 4:44 pm

     Nick,

     I think that where there’s smoke, there’s often fire.

     Why hasn’t the SEC investigated it? If they have, why haven’t they made the findings available?

     For that matter, remember all the brouhaha about short selling? Whatever happened to that? What prompted it and why has it now expired without so much as a whisper of why it was instituted to begin with? There’s something rotten in the state of Denmark.

     People often think of the SEC as a government agency. It’s not. It’s a SRA (Self-Regulating Authority). It has proven that politics play a much larger role than the truth ala Madoff, incidence of naked short selling (which is illegal). I believe there’s a lot more behind the scenes with respect to FTDs. Maybe I’m a conspiracy nut. Maybe it’s the truth. I don’t believe that you or I will ever know.

     Chuck
     • Nick says:

       March 19, 2009 at 10:34 am

       I don’t disagree that there may be fire, I just don’t buy that the preponderance of smoke proves fire.

       I’m sure the SEC has investigated: they swore to as much during Congressional testimony (which is even in the video). They could be incompetent (likely), unwilling to prosecute for political reasons (also likely), or they could have found that although the activities were distasteful and contributory, they were not illegal at the time. Alternatively, they could have found that nothing illegal was going on: people just figured out the banks were insolvent and dumped their shares all at once, which explains all the facts presented. In all of those cases, they probably wouldn’t make the findings public; either it would make them look bad, or generate public outcry, or further damage credibility of the remaining banks, or all of the above.

       The short selling change was specifically to artificially prop up the prices of the banking stocks affected (as far as I can tell): nothing more, nothing less. Basically it just forced brokerages to not allow arbitrary shorting by non-institutional investors on the affected stocks during the period, which helped isolate them from large-scale shorting while the government expanded their plans to pump bailout money into them. Once the government made it clear that no other large bank would be allowed to fail no matter how big their losses may be (the taxpayer would eat them all), there was no more need to protect them; there’s no reason to bet on short-term large stock price declines if you know the government will pay off their losses whenever they have them (which makes the stock go up).

       I agree, though… neither of us will likely ever know the whole truth; my perception is based on how I read the events, other peoples’ will certainly vary.
3. No MOT says:

   March 19, 2009 at 3:42 am

   I agree Chuck!
   Takes a brave soul to go against giants. Very seldom do the big guns get exposed, and when they do their attorneys, judges, media cover the evidence well since they are part of their payroll. Madoff said it was all a scheme, media kept on using “alleged” insinuating that if they could find a scapegoat or come up with an elaborate lie he may be innocent. The average billionaire would be worth less than if all the ilegal activity was exposed. But they hide well behind Foundation, corporations, charities etc.
   Its all smoke and mirrors, while the drug dealers, stock dealers, gun dealers and car dealers live in penthhouses and the religiously and patriotically brainwashed peasants live close to poverty.
   First it was the Germans, then the commies, the socialists and now the muslims…while Red China carries our promissory notes, driving BMW fulled by Arab oil talking on Swedish Nokia phones eating American hot dogs.
   Wake up Nick, you sound like a Madiff attorney.
4. Miami Beach Homes says:

   March 19, 2009 at 6:58 am

   That is indeed an interesting video, does have several valid points.
5. nobody says:

   March 19, 2009 at 5:18 pm

   This was produced by Judd Bagley of antisocialmedia.com and deepcapture.com. You should google his name before coming to any conclusions re: this video. Just sayin’.