March 8, 2010
2 Hours on Short Seller, Anthony Elgindy
– From “Front and Center”, by C. Austin Burrell –
I was informed this evening that the CNBC Series “American Greed” will air a 2 hour special on the notorious short seller and convicted felon Amir “Anthony” Elgindy. Elgindy was the operator of the most notorious criminal short selling syndicate of the last decade, known by several names, including “Anthony@Pacific”, etc. After being arrested in early 2002, and being released on bail, Elgindy was caught trying to fly from New York’s Islip Airport back to San Diego, in possession of $40,000 in cash, and more in precious jewelry, along with phony passports with different names on them from his own.
While Elgindy was operating, he attacked thousands of companies, 2200 plus, with impunity and aggressive arrogance. Working with lawyers specializing in suits for Directors and Officers liability insurance, paid bashers, pay for play journalists, NASD (now FINRA) boiler room broker-dealers, PIPES financiers, bloggers and hedge funds short sellers to destroy and preferably bankrupt his target companies.
His syndicate eventually grew to over 650 members, including many of the biggest hedge funds, law firms and more, all in turn supported by the SEC, FINRA, and other regulators. His activities attracted the partnerships of Milberg, Weiss, then the most successful law firm in the country, on both of the US Coasts, the SEC, FINRA, the DOJ, and many more, including firms specializing in producing negative research reports on companies his syndicate had targeted for short selling raids. [entire post]
Tags: 2200 companies victimized, american greed, anthony@pacific, bail, bankruptcy, d&o insurance suits, deregistration, doj, elgindy, finra, mad max, milberg weiss, nasd, paid bashers, pipes financiers, prison, sec, short selling syndicate, silicon investor, web site
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March 4, 2010
Harry Markopolos’ Book: “No One Would Listen”
– From “Front and Center”, by C. Austin Burrell –
This week, Certified Fraud Examiner Harry Markopolos announced the release of his new book, “No One Would Listen”, about the complete stonewall he hit with US Government Regulators including the SEC and FINRA. He told his story in his typical low key and very professional manner, making his message all the more devastating.
I am sure that SEC, FINRA and other officials to whom he reported his findings on the scope of the Madoff fraud felt footfalls on their graves.
Starting with CNBC, and then going to Matt Lauer, CNN and FOX News, he recounted his story of his discovery of the Madoff fraud, which had been ongoing for many years, when he examined the claimed performance of Madoff’s split strike price conversion strategy, and his quick realization that he claimed performance that would have simply been impossible to produce. He recited the sequence of events that led him to conclude within 30 minutes that Madoff was a fraud. It is where it went from there that no one except people who had faced similar risks could imagine.
I come from an extensive derivative background and I have known everything about the history of conversions and reverse conversions for decades, literally. Like Mr. Markopolos, I had a serious math background, which had been the foundation of my move into the derivatives industry well over 33 years ago. I maintained many of my relationships in the industry as I moved into other areas later in my career, but I found myself drawn back into the space by the short selling scandal.
I knew what I had found in the illegal short selling manipulation scandal, enormous fraud involving all forms of organized crime globally. What Markopolos did was to confirm that his research led him down the very same rabbit holes, to the same slimy criminals. Slimy is not the right word though, slick and ruthless are better. [entire post]
Tags: book, conversions, finra, harry markopolos, lawyer misconduct, madoff, no one would listen, reverse conversions, sec, short selling, split strike price, threats
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March 4, 2010
– From “Vassalotti’s View”, by Gary Vassalotti, LIFA –
Today we saw large gains for several NASDAQ listed equities. Many times investors see these large gains and wonder: Why are the gains are happening? But, more importantly, who or what is driving these share prices up?
The answer to the first question is usually not too difficult to find or discern, based simply on current events. The second question, however, can be more difficult to determine. With the StreetIntel™ brief that was posted today (at http://www.investrend.com/intel-brief_030510) we can at least see the largest holders of the three investments, as well as whether or not they have increased their holdings, which provides some insight into the firms that have an interest in those securities, and sometimes a general interest in the company’s industry as a whole.
Now, to get some answers on the first, general question about why the gains occurred:
Zanett, Inc. (NASDAQ: ZANE), a business process outsourcing, IT-Enabled services and information technology provider, announced that it had experienced a $12mm increase in contracts during January and February. Even better than the dollar amount is the diversity of the contracts. [entire post]
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February 25, 2010
– From “The Brewer Blog”, by Brewer Investment Group –
Today, Fed Chairman Bernanke will continue his testimony before the House Financial Services Committee. Yesterday he said the U.S. economic recovery has been “nascent” and requires low interest rates to help it sustain growth. He also said that low employment and subdued inflation allow the FOMC to keep downside pressure on interest rates.
Today’s January Durable Goods Report came out better than expected, but that wasn’t enough to help the equities. Stock indices are down on the news that initial claims rose by 22,000 to 496,000. Traders had been looking for a decrease.
U.S. stock markets are under pressure overnight because of another shift in risk sentiment. Sovereign debt issues in Greece are putting fear into traders triggering liquidation of risky asset position. It’s highly doubtful that Bernanke will say anything today which can turn this market around so traders should look for downside pressure throughout the day. A break through 1090.00 in the March E-mini S&P 500 could trigger a further decline to 1084.50.
March Treasury Bonds and March Treasury Notes soared to the upside overnight as traders sought protection in lower yielding assets. The strong rally in the March T-Bonds is reversing yesterday’s lower close, putting the market in a position to take out Wednesday’s high at 118’09 and a .618 retracement level at 118’05. The charts indicate there is room to the upside to at least 119’00. [entire post]
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February 22, 2010
– From “The Political Prophet”®, by The Political Prophets –
Reporters tell us what happened yesterday. Pollsters tell us what’s happening today. The Political Prophet® predictions — based on sophisticated analysis — tell us what is likely to happen tomorrow. These forecasts are made by an elite team of professionals who have campaign strategy experience at the Presidential level. Team members are not currently representing candidates, bringing objectivity as well as expertise to these predictions:
If President Obama had a genuine interest in bipartisan healthcare reform, he would have included Republicans in the initial process last year. Instead he locked them out. The record shows conclusively that he values political gain over meaningful results. OK, he is not the first President to sacrifice the country’s interests to serve his own ambition but this week the Republicans have a chance to reform his approach to bipartisanship, fight legislative corruption and begin real reform of our healthcare system.
Here at The Political Prophet® we try to avoid the “weasel words” so often used in political discourse so we readily admit that on this occasion we do not know what will happen because the number of variables is too great. However, we certainly can tell you what should happen. If the Congressional Republicans follow a winning formula at Thursday’s big meeting with President Obama, we will predict great success for their effort.
They must begin with the understanding that this is all about television. It is as simple as the sweat on Nixon’s brow vs. the smile on Kennedy’s face. The planning process is fairly simple.
Step One-Republicans must select a central, telegenic spokesperson who can match President Obama’s charisma and “likeability” man to man. This is not a job for the best legislative strategist and seniority should have nothing to do with the selection process. This is a television matter and a situation where years of practice with legislative “political speak” is a disadvantage-not an asset. Sincerity, optimism and a friendly demeanor count. We believe the newly elected Senator from Massachusetts, Scott Brown, would do very well in the role of Republican moderator.
Step two-Republicans must select a single spokesperson from the Senate to handle the policy discussion on behalf of that side of Congress and our recommendation is the Senator from New Hampshire, Judd Gregg. He has the subject matter knowledge and has shown a willingness to be creative with his “CPR” proposal and other approaches to health care problem solving. He will flex his New England stubbornness if President Obama tries to “stampede” him. He also has the advantage of firsthand experience with this President’s deceptiveness. Finally, he has already proven to The President that he does not “bluff” while negotiating.
Step three-Republicans must select a single member from the House to be their spokesperson. The criteria and a process which values elements other than seniority are equally important with this choice. [entire post]
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February 22, 2010
– From “The Brewer Blog”, by Brewer Investment Group –
The U.S. Dollar traded mixed in a tight and narrow range. The trade weighted Dollar Index finished slightly lower after confirming last Friday’s closing price reversal top.
The lack of major U.S. economic reports on Monday helped hold the Forex markets in a tight range as investors awaited testimony later in the week from Fed Chairman Bernanke. His comments should move the markets especially if they come after a few days of range bound, directionless trading. His testimony before the House Financial Services Committee is expected to be about employment growth prospects and whether fiscal stimulus is needed.
Traders will be looking for Bernanke to give them clues about the timing of future U.S. interest rate hikes. In addition, he may be asked to explain why he hiked the discount rate last week.
The Euro finished lower as investor confidence evaporated following a failure by the European Union to reach an agreement with Greece regarding its fiscal responsibility. Depending which side you talk to, the EU and Greece are either very close or far apart.
The GBP USD traded flat to higher, but inside Friday’s range. Traders were covering short positions after the recent sharp sell-off in an effort to lock in profits. There has been no change in the fundamentals. The budget deficit, weak economy and lack of confidence in the Bank of England are still the catalysts behind the weakness in the British Pound. [entire post]
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February 19, 2010
– From “The Political Prophet”®, by The Political Prophets –
Twelve months in office yields a year of behavior observation so the Political Prophet® predicts that the Obama political team will continue to self destruct at least until after the mid-term elections.
The circumstances of the decision and announcement by Senator Evan Bayh (D-IN) that he would not seek re-election are especially indicative of the dysfunctional behavior which permeates the Administration and the Legislative leadership of the Democratic Party. The fact that the Senator timed his announcement to make it very difficult for his party to recruit, qualify and run a viable replacement is an “In your face” declaration to his fellow Democrats. When he also refused to give a private “Heads up” to his Senate Leader, Harry Reid, before the public announcement, he signaled that excesses of partisanship (i.e.: the Jobs Bill farce) gave rise to his act of open defiance.
Much of the Democrat’s underlying problem is inherent in “Chicago Style” politics. The reason so many officeholders from that area end their careers in disgrace and often in prison is that they pride themselves in “going for broke” regardless of the facts or public perceptions. They are like Irish boxers who must conclude every fight either flat on the canvass or with arms raised following a knockout-there is no prudent middle ground “victory by decision” for them. Governor, Senator and Senate Nominee, Lt. Governor Nominee and congressman comprise the current crop of disgraced Illinois Democrats who have made the news in recent months. [entire post]
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February 19, 2010
– From “The Brewer Blog”, by Brewer Investment Group –
U.S. stock indices sold off after Thursday’s hike in the Fed discount rate. The immediate reaction by traders was to sell because many traders thought this move served as a sign that the Fed would begin tightening its monetary policy. The Fed, however, is emphasizing that this move is not a deviation from its policy statement that interest rates will remain low for an “extended period”. This news is helping to stabilize the stock indices, leading to a shortcovering rally overnight.
The March E-mini S&P 500 is still negative, but trading well off of its low. The current shortcovering rally indicates that yesterday’s late session break may have been overdone. Don’t be surprised if this market tries to regain the psychological barrier at 1100.00.
March Treasury Bonds and Notes sold off sharply after the Fed hiked the discount rate, but in a case of sell the rumor, buy the fact, they both turned positive overnight. Oversold conditions are most likely contributing to the rally. In addition, bond traders are buying into the Fed’s comments that the discount rate hike is not a sign that the monetary policy is tightening.
April Gold and April Crude Oil fell sharply after the Dollar soared to the upside. News that the rally in the Dollar may have been overblown is triggering some light profit-taking. This is helping gold and crude oil to recover some of their overnight losses. The direction of the Dollar will be the driving force in gold and crude oil today. [entire post]
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February 18, 2010
– From “Vassalotti’s View”, by Gary Vassalotti, LIFA –
This Tuesday, February 16th, LightPath Technologies, Inc. (NASDAQ: LPTH) filed an 8-K with the SEC detailing a press release about its order experience with its line of asphere of lenses. The company had been optimistic about the prospects for market growth and sales growth for the product line itself, however, the press release mentioned that open orders total $1.8mm and that they are expected to grow 25% over the next few quarters — exceeding previous projections
Jim Gaynor, LightPath CEO, mentioned that the company has experienced a year of volume growth, as the manufacturers have seen the value of the asphereic molded lenses over the standard multiple lens setup currently dominating the industry. The company is currently providing lenses to four manufacturers, and has qualified to supply a fifth.
For a small firm such as LightPath this type of sales and market growth, when properly managed, can have a huge impact on the bottom line and stock price. [entire post]
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February 18, 2010
– From “The Brewer Blog”, by Brewer Investment Group –
The U.S. Dollar is mounting a strong rally late in the trading session following news that the Fed is set to hike the discount rate by 25 basis points to 75 basis points. While not actually beginning a tighter monetary policy, a hike in the borrowing rate charged to member banks is a sign that the Fed is getting ready to begin removing stimulus and raising other key interest rates. The Dollar is rallying because the rate hike tightens the interest rate differential between the U.S. and other foreign nations.
On Thursday, the Dollar had a volatile trading session triggered by economic reports and rumors of intervention. The Greenback opened higher, driven by spillover from Wednesday’s strong U.S. economic data. Early during today’s session the Dollar got a boost from mixed economic news. The Producer Price Index was higher than expected, but weekly jobless claims rose. This was followed by a better than expected Leading Indicators report and Philadelphia Fed Survey.
Initially, these reports supported the Dollar but a recovery in the equity markets encouraged speculators to demand more risk. This slowed down the upside momentum in the Dollar as intra-day profit-takers took over.
The Greenback accelerated to the downside on unconfirmed rumors that China and Russia were buying the Euro. After a sharp break, conditions settled and the Dollar turned positive once again. Later in the session, it was confirmed that Russia was actively buying foreign currencies. The recent weakness in the Forex markets has driven the Ruble to a 14-month high. Both Russia and perhaps China feel the need to protect their export markets by driving up foreign currencies. [entire post]
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