Two months ago Joe Floren, a schlubby-but-savage Goldman Sachs lawyer, made a bone-head mistake that caused some previously redacted information to slip into the public’s hands. The was ably covered by globally-respected publications as Bloomberg, the Economist, and Rolling Stone.
Economist: An enlightening mistake
Seminal law journal DeepCapture.com published its May, 20122, analysis 2, entitled “Joe Floren Screws the Pooch“, referencing the stories cited above.
Since May I have wondered when the hedge fund choagies would regroup and retaliate: Seeing the truth emerge as last in publications such as Economist, Bloomberg, and Rolling Stone, surely the Bad Guys must understand they have lost control of the narrative, I thought, and have some new damage control effort underway to deflect or usurp the truth as it comes out.
As always, Gary Weiss doesn’t let us down.
This weekend brought forth from Gary Weiss an effort that takes the same facts as the articles cited above, spins them to best advantage for the criminals, and is remarkable for being an obvious rip-off of Taibbi. That’s right, Barron’s published an essay cribbed from a previously-published essay by a competing magazine’s journalist in a plagiarization so bald it would not pass muster in one of those companies that sell term papers to college undergraduates. Moreover, it is clear evidence that the Bad Guys realize they have lost control of the narrative, and they are searching for ways to divert the new one once again. Alas, the best weapon they have in their arsenal is…. Gary Weiss?
I encourage the reader to read (if nothing else) Taibbi’s article, followed by Weiss’ treatment of exactly the same set of documents.
Matt Taibbi, Rolling Stone (May 15, 2012): Accidentally Released – and Incredibly Embarrassing – Documents Show How Goldman et al Engaged in ‘Naked Short Selling’
Gary Weiss, Barron’s (August 4, 2012): Documents accidentally unsealed from Overstock.com’s failed lawsuit against prime-broker units of Goldman and Merrill Lynch raise questions about short sales.
Matt Taibbi writes: ”The lawsuit between Overstock and the banks concerned a phenomenon called naked short-selling, a kind of high-finance counterfeiting that, especially prior to the introduction of new regulations in 2008, short-sellers could use to artificially depress the value of the stocks they’ve bet against. The subject of naked short-selling is a) highly technical, and b) very controversial on Wall Street, with many pundits in the financial press for years treating the phenomenon as the stuff of myths and conspiracy theories.”
Two months later Gary Weiss writes:”Naked short selling has long dwelled in the grassy knoll of the equity markets, denounced by crackpots, devotees of penny stocks, and troubled companies eager to divert attention from their failings. In other words, sightings of it often turn out to be bunk.
“Despite this, a failed naked-shorting lawsuit lodged against all of the major Wall Street prime brokers, including units of Goldman Sachs Group and Merrill Lynch, by Overstock.com, has raised intriguing issues. The case, filed in California Superior Court in San Francisco in 2007, was summarily dismissed in January on a technicality; the court found that it should
Matt Taibbi provides the context: “A quick primer on what naked short selling is. First of all, short selling, which is a completely legal and often beneficial activity, is when an investor bets that the value of a stock will decline. You do this by first borrowing and then selling the stock at its current price; then, after the price drops, you go out, buy the same number of shares at the reduced price, and return the shares to your original lender. You then earn a profit on the difference between the original price and the new, lower price.
“What matters here is the technical issue of how you borrow the stock. Typically, if you’re a hedge fund and you want to short a company, you go to some big-shot investment bank like Goldman or Morgan Stanley and place the order. They then go out into the world, find the shares of the stock you want to short, borrow them for you, then physically settle the trade later.
Gary Weiss describes the same context: NAKED SHORTING—selling stock that the seller doesn’t have and hasn’t borrowed, in the hope that its price will quickly fall, letting the seller repurchase it at a lower price and then deliver the stock to the buyer—is generally illegal. Usually, sellers must borrow a stock, or at least determine that they can borrow it, before they can sell it short.”
One can go through Weiss’s article doing this one-to-one mapping of content and tone from Matt Taibbi’s story of two months previously. It’s all rather creepy, actually. Of course, wherever it is possible to spin in the direction of the finance guys, hedge fund choagie Gary Weiss spins it as hard as he can in their favor, naturally
“The Narrative is dead. All hail the Narrative!”
This is an attempt to re-highjack the narrative. I predict that however this plays out over the next couple of years, you will see Weiss tagging along trying to reconstruct the narrative as favorably as possible to the benefit of the criminal element described in DeepCapture. He’s obsessive. It is almost as if his job is to downplay, minimize, cover-up in vain attempt at damage control.
No, it’s exactly as if his job is to downplay, minimize, cover-up. And we’ll see how vain it is when we see what publications go along for the ride, and which display some integrity by refusing to indulge the efforts of choagies like Weiss.
That, of course, is the most remarkable thing of all: That a publication like Barron’s would publish something by Gary Weiss, given what has been publicly documented about this guy. We know, because we documented it long ago. Newcomers to this story might start with the Reader’s Digest version by reading “Gary Weiss: Psychopath and Scaramouch“. For the graduate course in this psychopath, look him up on antisocialmedia.net.
I think this was a strategic mistake by the Bad Guys, however, in that it provides the public (and importantly, other journalists!) with a perfectly controlled display: the same set of facts being handled by three real journalists and one hedge fund shill. Perhaps decades from now it will be a case study in some school of journalism’s graduate seminar on “Journalism and the Fall of the American Oligarchy, 2008-2014″:
“OK students, the assignment for next week’s class is a paper that examines Goldman’s inadvertent release of those its documents as treated by Bloomberg, Economist, and Rolling Stone, versus how the same event was treated by Gary Weiss, a pseudo-journalist who had already been exposed long before that as a hedge fund choagie. For extra credit, describe the significance of its publication in Barron’s: Did Barron’s willingness to publish an obvious rip-off of Matt Taibbi reflect the desperation felt by the Sith to get in front of the narrative and establish a new Party Line?”