Bear Stearns Target of Criminal Investigation
October 6th, 2007Imagine my shock.
Via: Reuters:
U.S. prosecutors launched a criminal investigation into two mortgage-related hedge funds at Bear Stearns Cos. that collapsed during the summer, a person familiar with the investigation said on Friday.
The U.S. attorney in Brooklyn, New York and the U.S. Federal Bureau of Investigation have begun the probe, which is in the early stages, said the source who requested anonymity.
The news was first reported by the Wall Street Journal.
Bear Stearns was not immediately available for comment and U.S. prosecutors declined to comment.
The U.S. investment bank has been battered by the collapsed hedge funds and losses in its flagship mortgage business which led to the departure of its co-president Warren Spector.
Federal Agents Disguised as Supporters Arrest Ed and Elaine Brown
October 6th, 2007When I first heard about the Ed and Elaine Brown situation, I wrote:
Ed has been inviting people to his property to show support for him and the issues.
Insurgency 101: Don’t start a war with a powerful enemy and then issue a press release asking people you don’t know to show up and support you after the shit hits the fan. The biggest question I have at this point: How many armed feds are now in Ed’s house with him?
A few months later, I wrote:
The feds have now cut them off, but people are still being allowed to come and go from the property. Since the Browns have been inviting, “serious people willing to fight” to join them. Something is very wrong here.
When I first heard about this situation, I thought: Feds must be inside with the Browns.
The reason the feds don’t have the place completely barricaded is because they must have people inside who can report on the tactical situation. The feds might also be using this situation as a big honey pot to see how many people will actually show up.
My guess is that if the Browns asked everyone to leave, except for their lifelong friends and family members, the tanks would go in within hours.
For those of you who think you’re going to play Their game Their way, at least read Counter Insurgency for Dummies before going off half cocked like this. All of the 80 IQ fed knuckle draggers who are working this thing have. The Browns clearly have no concept of the counter insurgency tactics that states have been using against their own people for as long as there have been states.
Being right so often is getting to be a serious drag. Not only is it depressing, it’s not even intellectually challenging to make these calls anymore. Once you understand the basic scripts that evil employs, you’re in for a Bill-Murray-Groundhog-Day-type existence.
Via: AP:
After months of monitoring a couple convicted of tax evasion, all U.S. marshals needed to get inside their fortress-like home was a little deception.
Ed and Elaine Brown, who vowed for months to resist if authorities tried to arrest them, put out a welcome mat for what they thought was a group of supporters. The people turned out to be marshals who arrested the pair without a single shot fired.
“They invited us in, and we escorted them out,” U.S. Marshal Stephen Monier said Friday, releasing the first details of Thursday night’s arrests.
…
Experts had praised authorities’ hands-off approach before the surprise arrests, but patience had worn thin among some of the 2,400 residents of Plainfield, in west-central New Hampshire. During the summer, town selectmen asked Monier to stop the influx of militiamen and other anti-government groups to the Browns’ home.
Monier said he was sympathetic to the complaints, but cutting off access to the Browns would have undercut his plan.
“Ultimately, this open-door policy they seemed to have — which allowed the Browns to have some supporters bring them supplies, welcome followers, even host a picnic — this proved to be their undoing,” he said.
Slain Soldier Told Family to Investigate if She Died; She Was Found Dead on Bagram Airbase in Afghanistan
October 5th, 2007Massachusetts National Guard Spc. Ciara Durkin told her family that something might happen to her after discovering, “something she didn’t like,” and she, “had raised concerns that had annoyed some people.”
She was in a finance related unit.
Afghanistan produces 95% of the world’s opium.
Coincidence?
I wonder if she connected the information to a dead [wo]man’s switch in some way…
Full text follows.
Via: Boston Herald:
The Quincy soldier mysteriously slain by a bullet to the head on a secure Afghanistan airbase feared something might happen to her after discovering “something she didn’t like,†her devastated family revealed.
Massachusetts National Guard Spc. Ciara Durkin, 30, was found with a single gunshot wound to her head behind a building at Bagram Airbase on Sept. 27.
“The last time she was home she said she had seen things that she didn’t like and she had raised concerns that had annoyed some people,†said Durkin’s sister Fiona Canavan, 44, of Quincy.
“She said, and I thought she was joking, that if anything happened to her we had to investigate.â€
Canavan said she did not know what her baby sister had seen or whom she had told, and she rejected the notion that Durkin committed suicide. The military has not answered the family’s questions about her death, she added.
Publicly, the military will only say her death is under investigation.
Canavan said Durkin was openly gay, but she did not believe that had anything to do with her death.
Bay State political leaders are also demanding answers from the U.S. military’s top brass.
Sen. John F. Kerry has written to U.S. Secretary of Defense Robert Gates while Sen. Edward M. Kennedy and U.S. Rep. William D. Delahunt (D-Quincy) have contacted Army Secretary Pete Geren.
Kennedy said he has spoken to Geren to make sure the family’s concerns are known and addressed at the highest level while Delahunt wrote to Geren.
Ireland’s Department of Foreign Affairs has also weighed in, confirming it contacted U.S. officials in Dublin and Washington after a plea for answers from Durkin’s relatives in Ireland.
Durkin was assigned to the 726th Finance Battalion, Massachusetts Army National Guard at Bagram Airbase where she helped make sure soldiers in Afghanistan got paid.
“(The military) is definitely holding back,†said Canavan. “As to why we can only speculate.â€
She said it could take anywhere from three weeks to three months for her sister’s autopsy report to be released.
Officials initially told the family Durkin was “killed in action†but changed their story over the weekend, saying she perished from “non-combat related†injuries.
Durkin was deployed to Afghanistan in February and was due to return home in January. Her funeral is Saturday at St. John’s Parish Church on School Street, Quincy.
More: Soldier’s Kin Push Second Autopsy in Mystery Death
The frustrated family of Quincy soldier Ciara Durkin, mysteriously shot dead on a secure Afghanistan airbase, has commissioned an independent autopsy into her death in a desperate bid for answers.
Massachusetts National Guard specialist Durkin, 30, was found with a single gunshot wound to the head behind a church onBagram Airbase at about 6:30 p.m. on Sept. 27.
The family pushed for the independent exam after military officials failed to answer their questions about what exactly happened.
“We know for certain there will be an autopsy and that it will be conducted after Ciara’s funeral (on Saturday),†said her brother, Pierce Durkin, who would not give more details.
The Army initially refused to grant the family’s independent autopsy request but changed its mind a day after Sen. John F. Kerry put pressure on Pentagon chief Robert Gates.
Her mysterious death came just weeks after she told family she feared for her safety after seeing something on the airbase that concerned her. She told her family to investigate if anything happened to her.
Army investigators said they will speak with the family regarding Durkin’s prophetic statement.
“We will be contacting the family and will certainly take account of any information they are able to provide,†said Chris Grey, spokesman for the U.S. Army’s Criminal Investigation Command (CID), which is probing Durkin’s death.
Grey insisted the case is not a criminal investigation, saying it was an “undetermined†death. He would not reveal any other details to “protect the integrity†of the investigation.
Openly gay, Durkin was engaged to be married her family said yesterday, but would not give any more details about her partner.
Durkin also worked as a volunteer for MassEquality, an organization that promotes and protects marriage equality in the state.
Her family has dismissed the notion that Durkin committed suicide and is not convinced her death was linked to her sexuality.
The Servicemembers Legal Defense Network (SLDN), which fights discrimination against gay military personnel, backed that view. “There is no evidence to date that Ciara’s sexual orientation played a role in her death,†said spokesman Steve Ralls.
Durkin, attached to the 726th Finance Battalion, was decorated nine times by the military. Her honors included the Army Commendation Medal, and she was an “expert†marksman, her family said.
Possibly Related: Surge: Afghanistan Now Responsible for 95% of Global Opium Production
Possibly Related: The War in Afghanistan is Simply a Big Money Heroin Racket
Never Forget: Col. James Sabow
Industry Wouldn’t Fund Cancer Drug Research, So Alberta Town Rode to the Rescue
October 5th, 2007Via: CBC News:
Even though the drug shrinks cancerous tumours, no pharmaceutical companies wanted to fund human trials because they couldn’t make enough money selling it. And that’s when Peace River stepped in.
To date, the town in northwestern Alberta has collected $250,000 — a large chunk of the $800,000 in grants and donations generated worldwide to fund the clinical trial of dichloroacetate, or DCA.
DCA has been in use for decades. But it has recently been shown to fight cancer by attacking the metabolism of malignant tumours in studies on rats.
In January 2007, the academic journal Cancer Cell published a University of Alberta doctor’s findings that showed the compound shrinks tumours without damaging healthy cells. But because the drug sells for so little, at $2 a dose, no drug company was willing to support human trials and DCA’s patent expired.
So people in Peace River began their fundraising campaign.
Another U.S. Bank Fails
October 5th, 2007Note the part about the depositors who became “creditors” to the bank?
That’s a pleasant way of saying that clueless elderly people lost any portion of their deposits above the FDIC limit of $100,000.
Via: Reuters:
Miami Valley Bank, with $86.7 million in assets, became the third failed insured bank this year when Ohio’s industry regulators closed it down on Thursday, the Federal Deposit Insurance Corporation said.
The Citizens Banking Corp took over $62 million of insured deposits and two offices, which will reopen on Friday, the FDIC said in a statement.
The FDIC, which took receivership of the failed bank, said its remaining $14 million in 269 deposits exceeded the federal deposit insurance limit and depositors of that amount will become creditors.
The FDIC will retain the assets of the failed Lakeview, Ohio-based bank.
Attempt to Shake Gold Bugs Runs Into Wall of Buyers
October 5th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
We need to talk about stops and cranks.
Cranks are an attempt by large players to shake valuable fruit from the tree around strategic support and resistance levels.
In Insider Crimes, Funny Money and Options Rackets, I wrote:
Market makers will often drive down the price before the big move up… Just before a big move, they might run the stops, just under where you’ve drawn your support line, to scoop up a bunch of shares at a discount… Double and triple bottoms are built on the skulls of people who thought there were being smart by setting stops down near a 52 week low.
What I wrote above was referring to stocks, but this applies to anything that’s traded in realtime with leverage. Take gold from earlier today, for example. Here’s a 15 minute interval chart:
“How many times have I mentioned $721? I’ve lost track.”
There are stochastic crosses and then there are stochastic crosses. See that stochastic cross near the strategic $721 level. That’s about the best catching-a-falling knife gamble there is. Those kinds of gifts are rare. And no, it wasn’t a cross under 20, but knowing about $721 was the tipoff to see that cross as valid.
I don’t use stops or limit entries around critical levels. I’ve either got my finger on the trigger at market, or I’m not thinking about the thing anymore. I’ve seen so much nonsense happen with key levels, I simply don’t bother with automated orders at those times. (Did I buy on that cross? Nope. I spent my cash on the previous bounce. It hurt to watch that, mumbling, “Stochastic cross. $721. Shit.” to myself. I hope my wife was asleep. I actually thought it was going to really break down; authoritatively, below $715 or something. But when that sucker started to coil back up, the swindle became obvious pretty quickly. Crank attempt.)
Here’s the rule with trying to cut it too close with stops (getting out) and limit entries (getting in):
Limits: If the thing is eventually going to move against you, you’ll get filled. If the thing is going to move in your favor, your order will be dangling there, unfilled, as the price of whatever you’re trying to trade has run away much higher (or lower, for short). In my experience, missing out on long entry because I set the limit too low feels just about as bad as losing.
Stops: Don’t place stops right up against key support and resistance levels. The cranks around key levels can be attempts by larger players to trip stop orders in an attempt to send prices lower (higher for short). Here, they actually wanted to buy a lot of gold, so why not use a little bit of capital to free up more of it, sending the price lower first? It works the same for short, just in reverse. If They want to short the thing, They’ll crank it up over a key resistance and trick traders into thinking “Wee! It’s breaking out!” And guess what… Inverse that chart above and you’ve pretty much got the picture.
How many times have I mentioned $721? I’ve lost track. So, we got an intraday breach of $721 to $720.20, believe it or not, and then look at it. Guys who set their stops just under $721 got robbed. Market makers call this shaking the apple tree, running the stops or cranking the stops.
What’s the moral of the story? No, it’s not to learn how to read a stochastic oscillator and draw price supports on the chart.
Don’t trade. Diversify. Diversify. Diversify.
So, to everyone who’s not trading this pig: it looks like we’re back to range bound action, short term, as pressure builds for another try at $750.
One last check of the Magic 8 Ball… Yep, comes up the same as last time: believe in the power of the weekly ascending triangle, but to watch out below $721.
Wake me up over $750 or under $719.
“Storm Isn’t Doing Much, so Far, Except Gathering Strength.”
October 4th, 2007Strange story about a worm that has been building a vast botnet of sleeper zombies. The thing has been growing for months. Very interesting read.
Via: Wired:
The Storm worm first appeared at the beginning of the year, hiding in e-mail attachments with the subject line: “230 dead as storm batters Europe.” Those who opened the attachment became infected, their computers joining an ever-growing botnet.
Although it’s most commonly called a worm, Storm is really more: a worm, a Trojan horse and a bot all rolled into one. It’s also the most successful example we have of a new breed of worm, and I’ve seen estimates that between 1 million and 50 million computers have been infected worldwide.
Old style worms — Sasser, Slammer, Nimda — were written by hackers looking for fame. They spread as quickly as possible (Slammer infected 75,000 computers in 10 minutes) and garnered a lot of notice in the process. The onslaught made it easier for security experts to detect the attack, but required a quick response by antivirus companies, sysadmins and users hoping to contain it. Think of this type of worm as an infectious disease that shows immediate symptoms.
Worms like Storm are written by hackers looking for profit, and they’re different. These worms spread more subtly, without making noise. Symptoms don’t appear immediately, and an infected computer can sit dormant for a long time. If it were a disease, it would be more like syphilis, whose symptoms may be mild or disappear altogether, but which will eventually come back years later and eat your brain.
Big Traders Dive Into Dark Pools
October 4th, 2007It’s absolutely fascinating that these institutional players have had to form private networks to run their rackets.
How this is allowed is a mystery to me. It makes no sense from a simple supply and demand standpoint! You know, the basic principal of a “free market.”
These guys are essentially able to hide their real block sizes from the public side of the market.
If you’re not on the inside of this club, what’s the real size of the bid and ask books at any given time?
Sorry, you can’t know that. You’re not in the club.
Ahh, the free market. So transparent. So efficient.
Those index numbers and stock prices might as well be displaying random digits.
Via: Business Week:
It’s not easy being a big player in the stock market. Trading huge quantities of stock on traditional exchanges has become ever more challenging, costly, and potentially disruptive. And if other players see your moves, they can disrupt your trades. That’s led to the emergence in recent years of alternative trading systems known as dark pools. And their growth could have significant implications for big stock exchanges—and individual investors.
Dark pools sound like something from Greek mythology or a sci-fi epic, but in stock-market speak they are private trading networks that big brokerages such as Lehman Brothers (LEH) and Merrill Lynch (MER) have developed primarily for the internal matching of orders between buyers and sellers who are clients of the same brokers. But dark pools have developed links among Wall Street firms as well, so that orders can be matched across different brokerages. Indeed, some firms are teaming to launch new dark pools such as BIDS Trading.
Alternative trading systems, or ATSs, have gained an increasing share of equity trading in the past few years. In addition to dark pools, ATSs include crossing networks, such as independently owned Liquidnet and Pipeline, that match orders for execution without having to first route them to an exchange or market center where they could be viewed publicly. Besides enabling investors to execute an order without affecting the public price quote, crossing networks match orders at a specified price, typically the midpoint of the bid and ask prices on stocks at the point in time of the trade. Electronic communications networks (ECNs), which trade stocks and currencies, are another type of ATS.
…
The proliferation of dark pools could have ripple effects beyond just block trading, says Lee at Aite Group. As long as they remain a niche market, they’re probably of little consequence. But if the equities market becomes increasingly dark as more trading shifts to these platforms, while retail investors continue to see only the public portion of equity trading, it calls into question the actual meaning of public price quotes, Lee says.
On a practical level, if retail investors get the price they think they’ll get when they submit an order and they’re happy about it, they probably wouldn’t care what the actual reality of the marketplace is, he says.
Regulators would care, however, regardless of whether individual investors have concerns. In fact, Reg NMS modified a 1997 regulation by lowering from 20% to 5% the ceiling on average daily volume of any given stock that ATSs are permitted to represent before being required to disclose information to the public market, Lee says.
Cline believes that not only are dark pools ultimately a good thing for investors but that “to not take advantage of dark pools is failing to live up to the best execution mandate of Reg NMS.”
Lehman Brothers Will Face Former Employees in Court Over Allegations of Fraudulent Mortgage Lending Practices
October 4th, 2007Via: Press Release:
BNC Mortgage, Inc. was in the business of selling sub-prime home loans to buyers who could not financially qualify for conventional loans. Last month, Lehman Brothers was forced to shut down BNC Mortgage, Inc., and its sub-prime lending business because the volatile market had made it so unprofitable.
Before the bottom fell out of the sub-prime lending market, Coleen Colombo, Isabel Guajardo, Linda Howard-James, Cheryl McNeil, Michelle Seymour and Sylvia Vega-Sutfin were highly paid and successful employees of BNC Mortgage, Inc.’s Sacramento branch. The women complained to their BNC superiors about fraudulent lending practices. BNC management told them “don’t worry about qualifications, just write loans.”
Infrared Scans for DC Drivers
October 4th, 2007Full throttle absurdity.
Via: Washington Post:
Are drivers ready to be scanned like groceries at the supermarket?
The answer will help determine whether Washington area commuters use a planned network of high-occupancy and toll lanes, which will start to take shape next year when an expansion of the Capital Beltway is to begin.
The lanes are billed as the salvation of the suffering commuter. Solo drivers will be able to buy their way around congestion, while carpoolers will ride free. But the lanes’ success hinges on finding a way to differentiate between paying and nonpaying customers without stopping every vehicle to count heads.
The private companies that will build and operate the Beltway lanes have proposed using technology that would scan drivers and passengers with bursts of infrared light that detect human skin. The technology is so sophisticated that it can distinguish human faces from decoy dummies and shotgun-riding dogs, according to Ken Daley, a senior vice president at toll road operator Transurban, one of two private companies behind the Beltway project.
