Was the collapse of Bear Sterns and Lehman an inside job?

[dc dalton]

Great GREAT article! Long but worth every second of the read.

Just to wet your appetite:

On Tuesday, March 11th, 2008, somebody - nobody knows who - made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness - "like buying 1.7 million lottery tickets," according to one financial analyst.

Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million. ... Although the SEC issued more than 50 subpoenas to Wall Street firms, it has yet to identify the mysterious trader who somehow seemed to know in advance that one of the five largest investment banks in America was going to completely tank in a matter of days.

http://www.rollingstone.com/politics..._naked_swindle

[n1fhpa]

Great read! It's all coming to a head. The many years of corruption have caught up.

IMHO this baloon is going to pop in the not so distant future and it will be ugly. The DOW should be nowhere near 10000.

Thanks for posting the story.

[Dredly]

wow.... just wow.

I'm still not entirely sure how the short selling thing works?

So you "borrow" 100 shares of PAFOA stock from the "bank". that is worth 10.00 / share, then you wait until it tanks to 5.00 / share, buy 100 shares and give them back to the bank... how did you make money?

wouldn't you have just lost money because you took out an "IOU" for 1000.00 and you only paid back 500.00? did the 1000.00 in stock get sold and then you buy back the same number at 1/2 price and return them?


sort of like borrowing your buddies brand new car and selling it because you know in a week they are going out of business and you can buy a new one for him at 1/3 the price and you keep the difference?

[RJT]

Fantastic find, and like DC said, it's a tad long but definitely worth the read

wow.... just wow.

I'm still not entirely sure how the short selling thing works?

So you "borrow" 100 shares of PAFOA stock from the "bank". that is worth 10.00 / share, then you wait until it tanks to 5.00 / share, buy 100 shares and give them back to the bank... how did you make money?

wouldn't you have just lost money because you took out an "IOU" for 1000.00 and you only paid back 500.00? did the 1000.00 in stock get sold and then you buy back the same number at 1/2 price and return them?


sort of like borrowing your buddies brand new car and selling it because you know in a week they are going out of business and you can buy a new one for him at 1/3 the price and you keep the difference?

you borrow the shares from the bank, not the money...

so let's say I own 100 shares of PAFOA that are worth $10 a share, you come to me and borrow them, sell them to someone else (at which point I have an IOU for 100 shares and you have $1000) and a week later the stock is down to $5 a share, you buy 100 shares for $500 and give them to me (at which point I have my stock back and you have $500 profit)

on the flip side, let's say your shorting PAFOA failed and the stock goes up to $15 a share, the IOU comes due at the end of the week and you're forced to spend $1500 to buy back the 100 shares you owe me (at which point I have my original 100 shares and you've lost $500)

that help any?

[Calvin]

wow.... just wow.

I'm still not entirely sure how the short selling thing works?

So you "borrow" 100 shares of PAFOA stock from the "bank". that is worth 10.00 / share, then you wait until it tanks to 5.00 / share, buy 100 shares and give them back to the bank... how did you make money?

wouldn't you have just lost money because you took out an "IOU" for 1000.00 and you only paid back 500.00? did the 1000.00 in stock get sold and then you buy back the same number at 1/2 price and return them?


sort of like borrowing your buddies brand new car and selling it because you know in a week they are going out of business and you can buy a new one for him at 1/3 the price and you keep the difference?

The type of selling you are trying to speak of is a little different. What they are talking about is one person has 100 shares of a stock and lends 100 shares to 5 people who then sell the 100 shares 5 times. You now have 500 shares on the market, 400 of which do not exist. Now the stock price drops because you have more shares on the market.
If this is done correctly you cause a companys stock price to plummet. now remember none of the people who sold the stock actually owned any stock at all. The 5 people who bought the stock from the five who borrowed it dont actually have anything. but the five people who sold the stock have the money.
Its a rich mans shell game.

[Dredly]

thanks guys, that makes sense


no rep for DC... i need to go back to my happy place now.. :P

[YBNORMAL]

Anybody know who George Soros is.......

[mcmcallister]

not 100%, beck talks about him, some socialist progressive in cahoots with the new administration......probably involved in the nwo, wait, no he isnt, the guy in the black suv in front of my apt says hes a good guy

[drh 686]

Anybody know who George Soros is.......

Google him, he is not a friend of people who love this country. And he is a big BO supporter. I'd bet BO takes his marching orders from him.

[PocketProtector]

not 100%, beck talks about him, some socialist progressive in cahoots with the new administration......probably involved in the nwo, wait, no he isnt, the guy in the black suv in front of my apt says hes a good guy

Huh??? He's the damn teleprompteer. The one pulling all the strings....the one with all the money that is getting funneled (illegally) into the DNC.