Matt Taibbi: "Wall Street's Naked Swindle"

Rolling Stone's Matt Taibbi's new investigation suggests massive manipulation by Lehman Brothers and Bear Stearns. Did someone bet on Bear Stearns' fall? Who was involved? Was there insider trading? A $1.7 million options bet was placed...and paid off. Nothing's been done about it by the SEC. If you're interested in how Wall Street plays this game, watch this.

Category:

News & Politics

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• Matt
• Taibbi
• Rolling
• Stone
• insider
• trading
• naked
• short
• selling
• economic
• collapse
• JP
• Morgan
• toxic
• investments
• subprime
• market
• credit
• default
• swaps
• CDOs
• October
• 2009
• recession
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• Lehman
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• Bear
• Stearns
• manipulation
• Wall
• Street
• investment
• bankers
• options
• Morning
• Joe

[Tippersnore]

Taibi should write a couple of books about all this malfeasance.

[fal2grace]

@Tippersnore he has that new article in the Rolling Stone about SEC destroying evidence... and yes he should write books.

[58robbo]

there's absolutely nothing wrong with naked shorting. if one person wants to bet that a share will fall, he has to find someone who believes the share will rise, to take that bet. if the parties agree there is no room for the govt to get involved. the real problem is that these institutions gamble with the taxpayer as their guarantor!

[fal2grace]

@58robbo good point. thank you.

[trance212]

matt is hottish

[fal2grace]

lol!!! totally.

[IntergalacticDouche]

Exactly, give Matt Taibbi his own show, and give these tools at morning joe their walking papers.

[58robbo]

@jlg5778 think of it like someone who commissions an artwork and pays in full upfront. the art doesn't exist yet but the artist pledges to deliver it at a specified time. naked shorting is no different. i naked sell you a stock. you accept. if the price of that stock goes down, i buy the stock and transfer it to you. i take a profit. if the stock goes up in price, i do the same thing but i take a loss. as long as i'm happy that you have the money to pay if you lose, there's nothing wrong!

[jlg5778]

@58robbo you have your facts a bit mixed, Shorting is allowed because those are covered by the end of trading. But Naked short selling is not suppose to be legal because those stocks are not paid off by the end of the trading day, therefore it's stealing.

[58robbo]

@MrFrosty1235 it is you who doesn't get it. naked shorting shouldn't be illegal. what you're suggesting is that big traders can manipulate pricing through naked shorting. for a start, they have to find someone on the opposite side of the trade. 2nd, because it's naked and not through an exchange, it isn't reflected in volume. 3rd, while some might say that the big guns can sway the market, nick leeson tried this and saw his backside. i don't think you understand what a naked short is

[MrFrosty1235]

@58robbo You dont get it. IT IS AGAINST THE RULES TO SELL STOCK YOU DONT BORROW, but the SEC never has been strict on these rules! except for retail.. If you massively sell stock naked that you had no borrow on and you buy puts and push the market through your put strikes the put sellers have to sell stock, you can cause a runaway train especially if you have pre knowlege of negative inside info. study up a little bit. It has nothing to do with credit worthiness.

[MrFrosty1235]

You dont get it. It is illegal to sell stock that you dont borrow, but the SEC never has been strict on these rules! except for retail.. If you massively sell stock naked that you had no borrow on and you buy puts and push the market through your put strikes the put sellers have to sell stock, you can cause a runaway train especially if you have pre knowlege of negative inside info. get a clue.

[58robbo]

@MrFrosty1235 there's absolutely nothing wrong with that. they still make a commitment to buy the stock or settle the margin if the stock rises. it is up to the person on the other side of that trade to check credit worthiness, not the govt! playing with billions means that you could also lose those billions.

[MrFrosty1235]

@58robbo The problem is that they sell shares they dont borrow. You and I as retail schmucks cant do that. They can. You sell the **** out of the stock, cash in on your long puts, and cause more selling by the put sellers. It's easy if you have inside info , you make the rules and you have 100's of millions to play with.

[MrFrosty1235]

@BlueTunisia Moronic analogy, the SEC is for sure to blame, but in your strange analogy world, the murderer bears no blame if the cops dont arrest him.