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Scapegoating Short Sellers Is Typical Wall Street aka Louise Story & The SEC Promote Ignorance

Posted by Timothy Sykes on Wed 17th of Sep, 2008 01:49:49 PM
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When I read horrifically ill-researched articles like THIS one by just-out-of-college-should-have-stayed-and-learned-more-how-the-financial-markets-work-instead-of-relying-on-sources Louise Story, I get angry. No way should this dumb little girl be given a pulpit from which to preach.

When I read articles like THIS that shows the SEC is even more incompetent than anyone ever imagined, I cringe. No way should the SEC continually blame short sellers for economic and business sins that are only now catching up to everyone.

You see young Louise and the underfunded SEC both fail to understand basic market reality–these firms are so poorly run that it’s sad that ANYBODY bought into their house of cards. It’s a tragedy that more people aren’t familiar with Short Selling of they’d have been able to profit from the problems instead of having to complain about them after losing too much money.

Sure, sure, people will say short sellers are abusing these troubled times, they need to be reigned in, but what short sellers do is no different than what longs and buyers do in good times, talk about their positions and why they believe they’re correct. Short sellers usually lose $ and that seems to be fine with everyone–as it’s unpatriotic to short sell (or so some say)–but when they’re making $, then the strategy is used as a scapegoat everywhere.

Of course, non-business-minded people who try to cover the business world, are bound to fail miserably, like the SEC and wannabe financial reporters (these peeps make like $50k a year aka they’re little smarter than janitors, excuse me, “sanitation engineers”, so they read their study guides but lack the ability to connect abstract concepts such as bad business=stock should go down, with or without short sellers, can never detach themselves from their petty human sentimentalities to deal with the cold hard reality.)

So try to block us from Short Selling shitty firms, seriously, it’s fine. Think naked shorting is really he problem here, LOL, sure, whatever helps you sleep at night. I do have to ask, didn’t we try this a few weeks ago to no avail and now we’re in the EXACT same position?

Seriously, it’s fine, we’re use to dealing with idiots. Whether it’s people who run the businesses, investors who believe em, those who regulate them or those who write about them, misconceptions are abound and no amount of reason or explaining will ever help cuz human nature/greed/gullibility doesn’t change and sadly, that’s what most people give into.

The good news is this is a prime example of why PennyStocking works so well…

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  • Unfortunately, there are going to be tons of liquidity problems in the market, and I am worried promoters will dry up, as such I am buying the panic, IE, i made this trade yesterday ( http://tfpoi.com/2008/09/16/i-hate-charlie-gasp... ). (I think you'll like the chart on that one)

    I also bought financials today, and SSO

    I know you dont really care but there is some money to be made in the regular market if your smart this week.


    Other than that i agree
  • Adam
    This isnt going to do anything aside from create a short squeeze temporarily across the markets that will eventually fall back down to reality... as all short squeezes do.
  • loser
    are youserious?

    short sellers are driving firms like MS and GS to the ground.

    explain how stocks go down after a firm lke MS beats the street by 70%.

    you can't and you know it.
  • too funny loser, who cares is MS beats--that's int h past, everyone's worried bout their future...learn how the stock markets work before putting any $ to work
  • Lux
    Do people out there actually believe that because someone shorts a stock it automatically goes down?
  • impliedvolatility
    Check out what Michael Lewis wrote about this financial fiasco at Bloomberg (http://www.bloomberg.com/apps/news?pid=20601039... )

    Happily, you can still blame Cox (SEC Chairman) for something. He went as far out of his way as he could to enable the brokerage firms by harassing the small group of informed financial people who have been trying to tell the truth to the markets: the short sellers. They bet against the stock price of a company and so have always had a bad reputation with the public. But in this case, they are the closest thing we have to heroes.

    Lewis is an excellent author. Read his stuff, you will be a better person for it. No, I am not his mother.
  • Adam
    Loser, me shorting a stock has nothing to do w/ a CEOs decision to leverage their companies capital 39:1 like an idiot and then have to file for bankruptcy... he did that himself. We just bet that it wouldn't work and we've been right.
  • loser
    well, we'll see what the SEC does.

    My money says they think short sellers drove down MS & GS today.

    lets all see what they do. have fun, boys.
  • Ryan
    Tim,
    take a look at WMAR chart, I shorted!
  • younggunz
    I think we all can agree if that's what the SEC thinks thats what goes. It doesn't make them right though.
  • YngvaiMalmsteve
    Nice job on shorting WMAR, Ryan. I thought about shorting it into close but didn't pull the trigger. I did short EPIQ overnight though....it had a beautiful afternoon fade, breaking down cent by cent in the last hour of trading. Lots of people in GOS got in on this one.
  • loser
    wow. calSTERS manager refusing to lend out MS and GS shares and is sending out an e-mail to other pension managers to do the same.

    not sure what impact, if any this will have, but it seems there are some powerful people working to shut you shorts down.
  • Zykosis
    if the companies didn't make mistakes investors wouldn't be scared, they wouldn't sell their shares, they would be buying. if their stocks are going down only because of short sellers, then there must be nobody buying. why are those stocks breaking support after support. the companies screwed up, and now they should pay.
    if anybody had any confidence in those companies, their stocks wouldn't be tanking.
  • Zykosis
    actually, somebody bought. Cramer bought more GS a few days ago.
  • EXDerivativesLawyer
    yeah that nyt article is retarded. naked short selling has always been illegal (save for market makers). the only thing that changed until today was the strength of the legalese they used in the wording of the regulation, and only with respect to shares of broker-dealers (i.e "reasonable belief you can locate the security to short" vs. must pre-borrow the security before shorting) - in either case, "naked" shorting was technically illegal.

    Whoever posted the Michael Lewis article -- that's a good read.
  • Busta
    I agree. Don't blame the short sellers. The heads of these companies (for the most part) are Ive League MBA's. It is their sh8t storm that they created, they made tens of millions of dollars...and short sellers are being attacked....its Bullship!
  • jeanpaul66
    its shortsellers who put many of those over-rated and over-valued stocks back to where they belong, this goes for a $2 pennystock or $200 bluechip stock...
  • Vestor707
    Short sellers? What the f!!K! What the hell does short sellers have do do with banks getting to greedy and giving out shady loans? Do they think they can report a bad quarter because they f!!k up and there stock want drop. Give me a break . The rich boys lost a little bit of money because they got to greedy and now there crying uncle sam and bashing the short sellers. Pure Ignorance .
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Date Stock Buy Sell Net
Nov 19 AENY $2.80 $3.02 $1148
Nov 18 NLST $4.16 $4.40 $947
Nov 18 IMGG $1.42 $1.64 $2094
Nov 17 NLST $5.04 $5.59 $2195
Nov 13 VRMLQ $21.50 $22.97 $2901
Nov 11 EONC $2.61 $2.80 $687
Nov 10 EONC $2.74 $3.36 $9784
Nov 6 QXM $4.31 $4.80 $1936
Nov 4 COT $8.66 $8.88 $642
Nov 4 QXM $4.61 $4.89 $822
Oct 30 DDRX $25.70 $26.53 $812
Oct 29 CTDC $4.00 $4.42 $781
Oct 26 AWSL $3.24 $4.10 $2516
Oct 23 RODM $5.27 $5.23 $301
Oct 22 AMLM $2.69 $2.97 $820
Oct 22 USEG $6.12 $6.09 $85
Oct 20 CBOU $8.93 $9.06 $243
Oct 16 VRMLQ $16.79 $18.65 $2773
Oct 13 YONG $11.05 $11.66 $1202
Oct 13 NPHC $0.59 $0.71 $583
Oct 12 IMGG $0.60 $0.70 $682
Oct 9 ZAGG $5.50 $6.10 $2380
Oct 7 GVBP $0.03 $0.27 $702
Oct 1 NPHC $0.70 $0.85 $1482

Total: $98,094 (681%)