The Stock Room page 10
(Continued from page 9)
Merrill Lynch was and is NOT a bank!
And even GM was NOT a bank!
FinReg is and will continue to be a total disaster based on hatred and payback!
_ _ _ _
Fine, we want to punish institutions for what we all wanted… I can’t stop it even though the U.S. Supreme Court said that we should NOT destroy. However, at the same time why aren’t we going after the ones that CAUSED THIS MESS? When we do finally convict one, they get a tiny slap on the wrist
and then just go about their business anyway!
apppro’s take for 03/16/2013 09:00 am EST
GANGshorting—Where is the Justice?
Published: April 16, 2008 in Knowledge@Wharton
“When Bear Stearns collapsed in March, some insiders argued it was wrong to blame the firm's risky bets on mortgaged-backed securities. They had another culprit: malevolent traders working together in the upside-down world of short sales -- making money by knocking down Bear's stock.
No one openly admits to conducting a "bear raid," since deliberately manipulating stock prices is illegal.”
I know I’m really tilting at windmills here, but yesterday’s total disgrace by Senator Levin in D.C. really makes me sick. Fine, JPM Chase screwed up and as a shareholder I had several months of angst. I didn’t lose anything since I didn’t sell, but it sure wasn’t fun! However, what Levin did yesterday just so he could score some political points is a true disgrace. If you refer back to several blogs I did back in 2012 (I am especially amazed how spot on I was with my 05/13/12 Timeline that I still get chills! And I didn’t have dozen of aids feeding me their interpretation of history.) you will know that just like in 2008/09 it was blatant shorting that did the Whale in, just like with our mortgages. Where is the outrage?
“Whiter Shade of Pale” The story of JPM and the Lehman’s Principle
This isn’t a story of Ahab’s white whale , but rather the hard to believe redo of the Lehman’s Principle!
Lehman’s Principle: The confidence destruction of an entire entity based on SHORT-term re-evaluation of LONG-term holdings due to unrestricted rumormongering and gang-shorting! Basically, taking a 30-YEAR something and basing it on a 30-SECOND whatever!
Yes, JPM’s London whale may have bit off more than he could chew, but in this case size should not be the issue. What matters is how the things that he was chewing on were poisoned by others so much that anything that was finally swallowed was poisonous for sure. Please keep in mind the following quote & date from the above article as you read on. Also remember those 3 dreaded words: MARK-TO-MARKET M2M!
“Kavi Gupta, a credit derivatives trader at Bank of America Merrill Lynch, wrote in an April 10 note to clients that it was time to take advantage of the index moves. “What better opportunity than Easter Thursday with Europe cratering to annihilate people,” he wrote. A BofA spokeswoman declined to comment.
Since then, traders say, an increasing number of hedge funds and some asset managers have placed more bearish bets, taking opposite positions to J.P. Morgan and possibly hurting its ability to pare its positions.”
1. London whale starts LONG-term financial instruments based on Europe.
2. Europe starts to get better.
3. A couple of short hedge funds start to build positions AGAINST those whale’s holdings.
4. Whale adds on positions.
5. Europe’s re-failure rumors begin, again.
6. More shorts start to increase their positions.
7. Europe’s election rumors escalate.
8. Whale increases his positions.
9. Even more shorts INCREASE their positions.
10. Rumors over the demise of whale’s positions escalate where even BofA says to GANGSHORT THE ENTIRE POSITION!
11. Elections cause GREAT upset.
12. Shorts GANGSHORT to the extreme.
13. NOW, here is where I get a little confused: Somehow JPM is FORCED to M2M value those LONG-term positions way before they became due, hence the terminology as Jamie Dimon put it (and I paraphrase), “We are forced to take a M2M write down of $2 billion dollars.”
Isn’t this the exact same thing we did to OUR financial system back in 2008? YES!!!!!!!!!!!!!! For JPM it was just easier to devalue the holdings than fight it. THEY HAVE PLENTY OF $$$$, but it still makes me sick to let those SHORT-term traders/traitors get away with this crap! Isn’t that why we have Gitmo?
Why the hell are some calling for an investigation into JPM’s whale for seemingly making LONG-term investments in our ally’s? Instead, why the hell aren’t we investigating those unregulated short funds, and the disgraceful way they manipulate and destroy our entire financial system?
The Whale’s Ahab: Mark-to-Market Strikes Again!
Back in October 2007 FASB implemented Mark-To-Market (M2M). You should recall MANY of my past tirades on this insanity and how it was the TRUE cause of our entire financial meltdown. Well, now we have it again. The premise of M2M is that an entity must price something they own at the latest and most accurate valuation. Good idea – truly horrible execution. Think about it: How can you rationally value something that isn’t being actively bought and sold, and when there are only TWO (2) parties even bidding on it? That is not a fair valuation… which of the 2 views is right?
This is what happened to JPM’s Whale trades and the current discussion of “intent”.
For the most part we ONLY had 2 parties trying to create a value of the Whale’s purchases.
1. The Whale himself who OF COURSE is going to value his purchases at nearly full value. These were LONG-term items and therefore it was his “intent” that in 10 20 30 years they should be worth close to, if not at their full value.
2. And the SHORTS whose ONLY “intent” was to drive the value down as close to $0.00 as possible so they could cover.
That’s it… those are the ONLY 2 parties involved; so when it came time to employ that dreadful M2M whose value do you accept? I could just imagine what the conversation was in the dungeons of the shorts who were trying to destroy the Whale:
“Hey guys, sooner or later the Whale is going to have to use that joke of an accounting rule M2M. All we need to do is keep shorting it and shorting it until we can rumormonger everyone into believing the value is 50% less. There are NO other parties willing to or thinking about buying the Whale’s purchases, so he will be forced to M2M the value at 50%... and WHOOPS there it is… we make a killing!”
apppro’s take for 03/15/2013 09:00 am EST
Note: These are article & video links ONLY! I have not written anything myself yet!
Santelli Explores High Frequency Trading
By Inigo Wilkins & Bogdan Dragos, 22 January 2013
apppro’s take for 03/09/2013 09:00 am EST
Hate 1954 vs. Hate 2013
McCarthy Hearings vs. Warren Hearings
WHY you hate is irrelevant.
Hate is still Hate!
apppro’s take for 03/01/2013 05:00 pm EST
“Everything is going to get very bad and I’m not going to do a damn thing about it until I get what I want!”
“The Nation of Bash & Blame & Shame”
I am sure that many might find what I am about to say somewhat disrespectful if not completely offensive, but after listening to your President today I now have added “Shame” to our Nation’s title for that is all that I feel… utter and complete SHAME!
Today was ‘sequester day’. No, that’s not some honorary title we gave to all the hard working individuals in this great Country; but rather today was a day that OUR own Government shot us ALL in the ass and with an indignant smile, too boot! What really pissed the hell out of me and made me feel as if I was some pawn in a game of chicken, was the President came out swinging, saying that EVERYONE must endure this sequester UNTIL he gets more tax hikes.
Never did he admit that the sequester was HIS idea!
Never did he say that he had said that he would veto ANY attempt to change it!
Never did he say that he already GOT tax hikes on January 1st!
Never did he say that he turned DOWN Congress on a resolution that would have given him the ability to reallocate the cuts any way he wanted to avoid cutting the good while he cut the bad.
Never did he say that his vision of a ‘balanced fiscal policy’ was to give him everything he wanted, and then later he would demand even more before he would even think about discussing the truly urgent entitlement issues we have, if then!
Never did he ever say anything was his fault, but he sure did say EVERYONE would have to suffer for it.
Damn… is he some 2-year old child throwing a fit or what? Just shameful! All he did say was that the Republicans wouldn’t give him MORE TAXES to bailout the ‘Entitled Ones’ and to help fund his welfare State. Over and over he kept TELLING us ALL how BAD things were going to get, and how he was going to go throughout the Nation proclaiming it UNTIL he gets his tax increases. Just Shameful!
Side note: What really makes me sick to my stomach is that what the President wants is basically MY “Quasi Buffet Rule” and if he had enacted it 4 years ago we would not be in this mess in the 1st place!
There was also a comment by the President that even the ‘help’ at the White House would have to take cuts and who would be left to vacuum and clean. I really am tempted to make some comment that he should let his wife try cleaning once in a while instead of buying dresses and going on the Oscar’s; but I thought that would be totally inappropriate, so I won’t.
apppro’s take for 02/12/2013 07:00 am EST
Here is a preview of the President’s State of the Union Address. This segment emphasizes his new tax policy.
Didn’t the Prez get his tax increases already? This is what you call bipartisan politics and cooperation? Double dipping is NOT only disgusting and immoral, but in this case will just lead to further hatred and uncertainty.
apppro’s take for 01/25/2013 03:00 pm EST
“Clash of the Titans”
It’s been a while since we’ve talked. Been busy Tweeting to the utter dismay of the girlfriend, but what can I say… I’m a Tweet junky. However, today I really wanted everyone to watch this fight between 2 huge financial whatever’s. I don’t want to burden you down with specifics on what they were fighting over, mainly the short selling of Herbalife, but I want you to see how our collective futures are being manipulated in order to serve the narcissistic egos of these 2 guys. Believe me, this will be ALL over the news all weekend.
Let me quickly reference that Bill Ackman (man on the left) is the one who shorted and subsequently destroyed a company – MBIA – back in 2007 that really started our financial collapse. You may remember my ramblings on this for several years. Ugh!
(Continued on page 11)