4 ms·

Naked short selling [1] and short and distort [2][3] were also a big part of the pump and dump then the crash, they nearly broke the entire market. > During th

Naked short selling [1] and short and distort [2][3] were also a big part of the pump and dump then the crash, they nearly broke the entire market. > During the takeover of The Bear Stearns Companies by J.P. Morgan Chase in March 2008, reports swirled that short sellers were spreading rumors to drive down Bear Stearns' share price. Democratic Senator Christopher Dodd felt this was more than rumors and said, "This is about collusion." Chase was victimized by a similar "short and distort" scheme six years earlier when rumors arose about its purported relationship with Enron. Naked short selling rules went into effect Thursday, Sept. 18, 2008 three days after the Sept. 15, 2008 Great Recession cliff that dropped Lehman and kicked it off [3]. Much cheaper to buy value and extract it when it is cheaper from a crash, the worst kind of players in the market extracted the value from the value creators. Lots of the games played then are back with hedge funds creating movement to skim, short and distort and in some cases try to shakeup companies [3][4]. Amazon, Tesla, Apple, and many more are getting these attacks currently, we aren't ready for another big game, they might truly break public markets next time. [1] https://www.sec.gov/news/press/2008/2008-204.htm https://www.sec.gov/news/press/2008/2008-204.htm [2] https://en.wikipedia.org/wiki/Short_and_distort https://en.wikipedia.org/wiki/Short_and_distort [3] https://www.sec.gov/news/press-release/2018-190 https://www.sec.gov/news/press-release/2018-190 [4] https://corpgov.law.harvard.edu/2017/11/27/short-activism-the-rise-in-anonymous-online-short-attacks/ https://corpgov.law.harvard.edu/2017/11/27/short-activism-th...

cm2187 8y ago
Lehman was insolvant, short sellers didn't create the crash nor the recession. 2008 isn't the story of a malicious rumor that went wrong.
- drawkbox 8y ago
  Naked short selling and pump and dump was in effect which is indisputable by the facts, Lehman was just a trigger point. Making it all about Lehman is disingenuous to the full statement and event. The Great Recession was a value extraction event plain and simple, a banking squeeze in the end. Naked short selling, short and distort and pump and dump were the fuel, the value extractors took from the value creators. The Great Recession wasn't an typical market correction but engineered, many banks and funds paid fines for their part [1][2]. Short and distort is back in full force, gearing up for another round [3]. People will not be ok with 'too big to fail' this time around, and if another Great Recession happens, it may permanently harm public markets for good. [1] https://www.nytimes.com/2016/01/15/business/dealbook/goldman-to-pay-5-billion-to-settle-claims-of-faulty-mortgages.html https://www.nytimes.com/2016/01/15/business/dealbook/goldman... [2] https://www.cnbc.com/2015/04/30/7-years-on-from-crisis-150-billion-in-bank-fines-and-penalties.html https://www.cnbc.com/2015/04/30/7-years-on-from-crisis-150-b... [3] https://corpgov.law.harvard.edu/2017/11/27/short-activism-the-rise-in-anonymous-online-short-attacks/ https://corpgov.law.harvard.edu/2017/11/27/short-activism-th...
icelancer 8y ago
This post reads like Elon Musk trying to justify why he hates short sellers.
- drawkbox 8y ago
  > Naked short selling rules went into effect Thursday, Sept. 18, 2008 three days after the Sept. 15, 2008 Great Recession cliff How you twisted that into your hate on Musk seems biased. Clearly the facts are short selling and naked short selling exacerbated the Great Recession. Your Musk hate is outshining the facts. The Great Recession wasn't an typical market correction but engineered, many banks and funds paid fines for their part on the fraudulent ramp up pump [1][2]. And naked short selling rules were reigned in 3 days after the Great Recession cliff [3]. Though little has been done to reign in securities fraud using short and distort besides this SEC warning shot on a smaller fish this year [4]. Short and distort is illegal and needs to be a major regulatory push to avert another crisis, especially since the market is more automated and HFT run now. The SEC short and distort warning shot this year happened almost a decade later almost to the day of the Great Recession cliff (Sept. 15, 2008 - Sept. 12, 2018) putting the big fish on notice [4]. > “While short-sellers are free to express their opinions about particular companies, they may not bolster those opinions with false statements, which is what we allege Lemelson did here,” said David Becker, an Assistant Director in the SEC’s Division of Enforcement. [4] People will not be ok with 'too big to fail' this time around, and if another Great Recession happens, it may permanently harm public markets for good. [1] https://www.nytimes.com/2016/01/15/business/dealbook/goldman-to-pay-5-billion-to-settle-claims-of-faulty-mortgages.html https://www.nytimes.com/2016/01/15/business/dealbook/goldman... [2] https://www.cnbc.com/2015/04/30/7-years-on-from-crisis-150-billion-in-bank-fines-and-penalties.html https://www.cnbc.com/2015/04/30/7-years-on-from-crisis-150-b... [3] https://www.sec.gov/news/press/2008/2008-204.htm https://www.sec.gov/news/press/2008/2008-204.htm [4] https://www.sec.gov/news/press-release/2018-190 https://www.sec.gov/news/press-release/2018-190
  - icelancer 8y ago
    > How you twisted that into your hate on Musk seems biased. I'm actually a pretty big Musk defender here. Good read, though.

cm2187 8y ago

Lehman was insolvant, short sellers didn't create the crash nor the recession. 2008 isn't the story of a malicious rumor that went wrong.

drawkbox 8y ago
Naked short selling and pump and dump was in effect which is indisputable by the facts, Lehman was just a trigger point. Making it all about Lehman is disingenuous to the full statement and event. The Great Recession was a value extraction event plain and simple, a banking squeeze in the end. Naked short selling, short and distort and pump and dump were the fuel, the value extractors took from the value creators. The Great Recession wasn't an typical market correction but engineered, many banks and funds paid fines for their part [1][2]. Short and distort is back in full force, gearing up for another round [3]. People will not be ok with 'too big to fail' this time around, and if another Great Recession happens, it may permanently harm public markets for good. [1] https://www.nytimes.com/2016/01/15/business/dealbook/goldman-to-pay-5-billion-to-settle-claims-of-faulty-mortgages.html https://www.nytimes.com/2016/01/15/business/dealbook/goldman... [2] https://www.cnbc.com/2015/04/30/7-years-on-from-crisis-150-billion-in-bank-fines-and-penalties.html https://www.cnbc.com/2015/04/30/7-years-on-from-crisis-150-b... [3] https://corpgov.law.harvard.edu/2017/11/27/short-activism-the-rise-in-anonymous-online-short-attacks/ https://corpgov.law.harvard.edu/2017/11/27/short-activism-th...

icelancer 8y ago

This post reads like Elon Musk trying to justify why he hates short sellers.

drawkbox 8y ago
> Naked short selling rules went into effect Thursday, Sept. 18, 2008 three days after the Sept. 15, 2008 Great Recession cliff How you twisted that into your hate on Musk seems biased. Clearly the facts are short selling and naked short selling exacerbated the Great Recession. Your Musk hate is outshining the facts. The Great Recession wasn't an typical market correction but engineered, many banks and funds paid fines for their part on the fraudulent ramp up pump [1][2]. And naked short selling rules were reigned in 3 days after the Great Recession cliff [3]. Though little has been done to reign in securities fraud using short and distort besides this SEC warning shot on a smaller fish this year [4]. Short and distort is illegal and needs to be a major regulatory push to avert another crisis, especially since the market is more automated and HFT run now. The SEC short and distort warning shot this year happened almost a decade later almost to the day of the Great Recession cliff (Sept. 15, 2008 - Sept. 12, 2018) putting the big fish on notice [4]. > “While short-sellers are free to express their opinions about particular companies, they may not bolster those opinions with false statements, which is what we allege Lemelson did here,” said David Becker, an Assistant Director in the SEC’s Division of Enforcement. [4] People will not be ok with 'too big to fail' this time around, and if another Great Recession happens, it may permanently harm public markets for good. [1] https://www.nytimes.com/2016/01/15/business/dealbook/goldman-to-pay-5-billion-to-settle-claims-of-faulty-mortgages.html https://www.nytimes.com/2016/01/15/business/dealbook/goldman... [2] https://www.cnbc.com/2015/04/30/7-years-on-from-crisis-150-billion-in-bank-fines-and-penalties.html https://www.cnbc.com/2015/04/30/7-years-on-from-crisis-150-b... [3] https://www.sec.gov/news/press/2008/2008-204.htm https://www.sec.gov/news/press/2008/2008-204.htm [4] https://www.sec.gov/news/press-release/2018-190 https://www.sec.gov/news/press-release/2018-190
- icelancer 8y ago
  > How you twisted that into your hate on Musk seems biased. I'm actually a pretty big Musk defender here. Good read, though.