Wow, this guy Christopher Ailman is utterly clueless.  I don’t usually say things like this, but "Way to keep your eye on ball, genius!"

I don’t have much of a problem with the uptick rule — its pointless, and is easily worked around by hedge funds — but i can take it or leave. And, I agree that rules against naked short-selling — already illegal — should be enforced.

But if you think the current economic, credit and financial problems are caused by shorting, you are simply a smoking too much dope. (Don’t do drugs, or you will end up a brain-dead piece of lawn furniture).

Idiots . . .

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Curbing Short Sellers
click for video
Pederasts_against_short_selling

One of the nation’s top pension funds taking aim at short sellers,  with Christopher Ailman, CalSTRS CIO and CNBC’s Maria Bartiromo.

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To review, it wasn’t the excess leverage, or the under-capitalization, or the lack of risk controls, or the bad investments in all of the real estate related paper, or the insolvency — it had nothing to do with the nonfeasance on the part of the Fed, and the SEC going AWOL — no, it was the short selling.

Financial punditry has reached new lows — and with Luskin and Ben Stein running around, that ain’t easy.

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Related:
This blame game is short on logic
Douglas Kass
FT,  August 21 2008 20:02
http://www.ft.com/cms/s/95ccac78-6fb1-11dd-986f-0000779fd18c.html

Web based PDF 

Category: Credit, Short Selling, Video

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

28 Responses to “Clueless Fund Manager of the Day: Blaming Short Sellers”

  1. Eclectic says:

    Sometimes I wonder just exactly what the truth is about the influence of short-selling in this financial crisis.

    The academic me says “no” but the practical me is not so sure.

    One thing is for sure however, and it’s that the financial firms have aided and enhanced any “honest” short-selling by leveraging their operations to the brink… thus frightening their shareholdersa and the entire investing environment (macro)… and thus t-h-i-n-n-i-n-g any buyer enthusiasm for seeking values at a discount.

    In other words, they let loose the brakes of the railcar all by themselves, and now it’s gaining speed down the grade.

    Barringo,

    Go back and read the gospel, according to Eclectic:

    http://bigpicture.typepad.com/comments/2007/09/exporting-infla.html

  2. Simon says:

    Everyman and his dog is short the remaining investment banks. Everyone else is wishing they were.

    Who will buy them…not even the guy in the video.

    He does have a point though..and by now everyone has figured it out. The Investment banks are uniquely vulnerable to there stock losing value.

    It destroys their precious balance sheet and results in them being down graded meaning they have to raise capital.

    Karl Denniger called it last night on Ticker Sense.

    Whats the bet the SEC will try to stop the party before its over and we’ll see an enormous short covering rally?

    PS If I sounds as if I know what I’m talking about its pure coincidence

  3. matt says:

    “I agree with what Cramer said, Larry Kudlow said…”

    That’s all he needed to say. I wish he would have said it in the beginning so I could have just turned it off.

  4. Dhukka says:

    This guy is a complete fool but it’s zsar Kudlow and that really gets my goat. The guy has to be the biggest hypocrite of all time. He constantly bleats on about the virtues of free market capitalism yet he is the first to want intervention whenever the free market doesn’t act the way he wants it too. The ultimate phony capitalist.

  5. Bruce says:

    Well this morning will be interesting…even after the FED got the emergency money from the treasury and now 250 billion more is available…if initial claims surprise this morning to the upside, say 260k or so, I imagine we’ll see less green and more red today.

    …just my opinion.

    and underlying all this, is still the housing crisis….long term…

    http://money.cnn.com/2008/09/17/news/economy/housing/index.htm?postversion=2008091715

    Bruce in Tennessee

  6. flenerman says:

    What’s largely to blame? “…the end of the uptick rule and the move to decimalization…”?!!!!

    This guy is leading the 2nd largest pension fund in the U.S.!

    He suggests that the largest, CALPERS, is in on the no lending deal. Wouldn’t you think that the two of them and friends could bust the shorts in the chops if they had the courage of their convictions?

    No, he goes on to say (with pride, if I’m not mistaken) that they are underweight financials. Not underweight enough, me thinks.

  7. BobC says:

    Naked shorting is a problem IMHO. But short selling also serve a function in a free market. It provides consequences for bad decisions by management. Sometimes a stock deserves to get pummeled.

  8. leftback says:

    The guy is in Sacramento, Barry, he probably has a really big house that he would like to sell you. He bought it for $2 million with a 1-year ARM and now the short sellers have ruined his paradise.

    The SEC is ramping up another witch hunt…

  9. Fred S. says:

    They are trying to fight fire with fire. These guys are ‘long’ the markets. This is a self preservation measure. All rules, ethical or otherwise are out the window at this point. I would find it hard to believe that the ‘shorts’ are playing totally above ground.

  10. grumpyoldvet says:

    These people remind of my daughter when they were young (7 yrs of age) and their mother found they had done something. er, bad. Their first response was, It wasn’t me, it was someone else. Never found out who that someone else was but many of times it was just someone.

    These people just cover up for their own incompetence because if the truth about their abilities were known they wouldn’t be where they are. My opinion is that they would have trouble making it in a fast food establishment, and no not as managers.

  11. insaneclownposse says:

    BR: Maybe the hapless Ailman simply needs to START smoking dope? Open his eyes a bit?

    just my two cents. not an endorsement of dope smoking.

  12. CNBC Sucks says:

    I mentioned Ailman before:

    http://bigpicture.typepad.com/comments/2008/09/dow-close–504.html

    I have seen a cavalcade of clowns on CNBC in the last 9 months and Ailman is almost like the proverbial Black Swan by comparison: you couldn’t have expected to hear anything more stupid, but you just did.

    By the way, I was 100% right on the money: formerly cocksure Bob Doll was on CNBC and his tie and collar were crooked, AGAIN!

  13. Mischa says:

    The issue I have with short selling restrictions is it allows longs to manipulate the stock price. When people are charging 50% annually just to borrow their shares something is being manipulated. What value does not lending out your shares provide that you need to be compensated such a high interest rate to lend them out taking virtually no risk? Naked shorting only exists because there isn’t an efficient clearing system that allows an open market of lending and relending shares.

  14. Mr. Obvious says:

    Meh…Bowyer said its Obama’s fault. I’d say he is just as right as Ailman.

  15. CNBC Sucks says:

    The little Ewok said short selling is Obama’s fault? Wait, don’t tell me. I don’t want to know.

    How does a non-sensical mean-spirited mofo like Ewok Boy get on TV? Better question: How does a non-sensical mean-spirited mofo like me get on TV?

  16. Jeff M. says:

    The biggest travesty in all this is that these idiots even get ANY air time.

  17. JT says:

    I know I am setting myself up but what is the problem with naked short selling? If someone or a fund wants to short a stock and they do not borrow or their broker does not hold the shares. How cares? If the short seller is right and makes $ good for them. If a naked short seller is wrong, take all their money. Maybe I am missing something.

  18. daveNYC says:

    I’m glad to hear that it’s only been in the last two weeks that we’ve moved from a subprime crisis to a credit crisis. Way to keep up with current events guy.

  19. yo says:

    luskin and stein?

    Notice how the most culpible of all are missing from the list. Namely, all the democrats that demanded redlining be stopped and that loans be made to those who couldn’t pay and then put their men in charge of fnm and fre and covered for them at congressional hearings.

    Isn’t it a surprise that these, who provided the genesis and cover for the whole thing,aren’t even mentioned. And then call everyone else clueless.

    Sort of like obama’s new politics of shutting down radio stations and hacking email accounts.

  20. D.L. says:

    JT @ 10:02:51 AM

    In my opinion, the problem with “naked” shorting is the unfairness of it. This process is only available to a select few, and not the average “retail” investor. Unless it is an option that is available to everyone, I don’t think it should be permitted.

  21. mike e. says:

    I, for one, don’t like the notion that someone is borrowing shares in my “long” position from my broker (who is getting a fee for the transaction) so that they can sell my “long” position – drive the price down – and buy it back at a lower price. My broker likes the fees so it won’t allow me to put the shares in a lockbox and prohibit someone from borrowing my shares.

    I think shorts should be required to publicly disclose the size of their short positions on CNBC. In this type of chaos, shorting is not a zero sum proposition. It exacerbates balance sheet problems.

    If all the shorts covered right now – what would the market settle at? Up how many %??? Care to guess?

  22. CNBC Sucks says:

    Christopher Ailman is ON AGAIN right now!

    Never seen this guy before, now he is on 3 times in 3 days.

    I don’t have the audio on, but let me guess, he is talking his book.

  23. aqua says:

    Just got off Bloomberg, so he’s making the rounds…

  24. Economics 101 says:

    Wow,

    Blaming the short sellers is plain insanity. So some people (short sellers) want to capitalize on the current market crisis….. SO WHAT. This deflationary nightmare is not caused by short selling. Even if the .gov comes out with rules to curb or pause short selling the deflation will still be there. Come on… these irresponsible business leaders never had a business at all. This is the moronic end of a employed philosophy going on for the last 30 years. Even now on cramer there is a guy talking about it is a great time to buy a home. How do you figure? Do the math…. People are worse off now then we were in the 1970′s. It takes two people minimum to provide subsistance for four…. it used to take only one. Yes, it seems we have more cash….But that cash has LESS VALUE…..DUH. Go to school and take macro economics or re-take it. Once again, do the math. If housing values are falling at the current interest rate then theory tells us that if the interest rate goes up, then housing prices would have to drop markedly further than normal to sell. Yea, buy into a massivly depreciating asset…. PURE GENIUS MAN. How many idiots are left out there to believe this. How can you trust the same people that screwed you in the first place is beyond me.

    Good luck to all,

    Econ101

  25. Economics 101 says:

    Here,

    Some truth… There are so many headlines today stating “Market Soars”. How about “Market Soars/Rally” on short sellers covering there positions because there is the possibility of the .gov changing the rules mid-stream and the possibilty of what I will call a shell company to purchase all these crap financial products and loans. Basically how it would work is to do some creative number moving which also is bogus. Well, good luck to you (think japan).

    Econ 101

  26. Spiv says:

    “Short selling” is the cause of the market break? So now we can’t short sell the market anymore?

    F**k them all, just trade the single stock futures (OneChicago on CBOE’s trading engine) on each issue because in that market your selling is as easily done as your buying.

  27. Mischa says:

    So your fine with someone driving stocks up artificially but not fine with people driving it down? Driving it up essentially takes your money by not allowing you to purchase that stock at a fair value. Manipulation is illegal no matter what. If someone drives a stock bellow it’s value take advantage and buy some. If you don’t know your value of your stock maybe you shouldn’t be investing in the first place. If your broker isn’t passing on any of it’s gains from shorting to you then that is an issue with the broker and not an issue with shorting. If you won’t lend out your shares for a fair market rate then you are the one attempting manipulation.

  28. Cleveland says:

    It’s got to be George Bush’s fault, right?

    Or Dick Cheney, or Halliburton – no wait – Blackwater.