September Stock Talk IV

Based on a pre-defined weighted trend formula for chart analysis, DRYS scored -100 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

 From a commentator...

Once again, in a repetition of the Enron fiasco, the SEC adhered to its unofficial policy that it will work on big frauds at small companies, little frauds at big companies, but never big frauds at big companies.  Former SEC investigator Gary Aguirre was fired in 2005  because he wanted to depose Morgan Stanley big-wig John Mack.  Not that anyone was surprised.  SEC executives move back and forth from high paid jobs on Wall Street.  Their world view is grossly distorted, if not corrupt.  After reading the Inspector General's Audit from September 26th, about SEC lapses with Bear Stearns, the Chairman of the SEC said, "The last six months have made it abundantly clear that voluntary regulation does not work."  Did he sleep all the way through Enron, Worldcom and Global Crossing?

An executive at a Financial company has nothing to gain and everything to lose through bankruptcy.  Richard Fuld earns about $3 million a month.  Why would he admit bankruptcy if he didn't have to?  Why would anyone in his shoes voluntarily give up that kind of money?  What one can't understand is why the SEC allowed him to bet his pay-check against our economic health.  By letting things get so bad that the SEC would have to ban short-selling, the SEC allowed Fuld, and many others, to walk away with maximum compensation.  But the short-seller who bets with their pocket book goes away empty handed.  How can capitilism succeed if the guys who are right don't get paid and the guys who are wrong do?

Blind-sided by the abrupt SEC action, Amex had to suspend trading on SKF while they sorted through the implications.  Though trading resumed in the afternoon the NAV ended at a market-stressed value of $85.95, which put the share price about a 17% above the NAV. 

The SEC had created panic among ETF investors. A sample of trader chatter on the Elitetrader forum, "I just spoke with my firm's tech support. SKF was halted....and whether they break or not the trade after the halt is all up to NASD. I hope it breaks... what do they usually do in circumstances like this?...ProShares telephones are off the hook...won't this paralyze the derivatives market?...Yep, and it will undoubtedly raise the cost of 'hedging'...The SKF folks use counter-parties with swaps in order to construct the SKF...These swaps just went WAY UP in price ( with the counter-party ) because of the inability to short the financials and this is what the freaking Govt. has no clue about."