You:

“everyone knows” – who’s everyone, please? And why should I listen to them?
“legitimate” – what gives something legitimacy or doesn’t give it…what you agree with? Or evidence, logic, my own reading, facts…

“astroturfing” – astroturfing is predominantly pushing the owner’s interests and selling the owner’s products, neither of that is true of the site..
I really don’t care what the professional societies say about it, since none of the professional writers called this crisis. People in the alternative media did, spin it as the MSM might.

And even so, even if a site does not fall into the category of standard media.,..that isn’t of itself a reason to doubt its material since the material is well documented.

If it wasn’t well documented, I imagine libel suits would have taken care of the matter by now. I wonder why no one has sued for libel.

Deep Capture addresses far more issues than anything that ever affected Overstock.
Hmmm would you also call The Street astroturfing, by the way ? Or any of the major media outlets which have substantial corporate ownership and dare not cross certain lines because of it?

And which, moreover, sell products that benefit their owners? Deep Capture is doing research and investigation no major outlet does..someone has to finance them…what’s so bad if they got their finances from Byrne?

Would you rather they got government funds? If so, would you worry that they’d be toeing the government line? Doesn’t the Columbia Journalism Review get funding from hedge funds? Is it likely then that the CJR will criticize hedge funds? Does that mean everything the CJR writes is biased too?
Nest…
Einhorn’s track record is impeccable?
Let’s see..he shorted Lehman in 2008 or he wouldn’t even have broken even, because he took such a big hit.
And Allied which he shorted from 2002 only really went down because of the market going down…in 2009.
He’s jumped on the gold wagon very late as well

Anyway, no one is arguing about his intellect. He might be a very smart guy.
I’m suggesting that some of his past actions in the market make his opinions about CDSs odd – since he used CDSs in exactly the way he condemns now..and wants to ban them.
I wonder why..

I’m willing to listen to reason.
But you haven’t given me anything but a knee jerk response…and you didn’t refute any point I made.

I see reason and evidence at Deep Capture despite the bad language..
That’s why I became convinced there was something to it..
Overstock could go to the dogs for all I care…and Byrne might be cooking his books too..

It’s irrelevant to the evidence of corruption and collusion that the site has, and the analysis.
I doubt they would have regulators, the SEC and the FBI listening to them if there was nothing there.

If you can give me specifics of why CDSs alone are so bad and not interest rate swaps or other kinds of derivatives and how banning this one thing makes things better, let me know..

And if you can refute anything at Deep Capture and show me it’s an out and out lie, I’ll be happy to consider it.

If you can tell me the emails they have on their site are fraudulent, the IP addresses showing wiki manipulation and sock puppeting are fraudulent, and their analysis of stock fraud is off, please show me.

Happy to listen.

And if you can show me what anyone there did that was so wrong that even mentioning them is taboo…and what Einhorn did that is so great that I cannot even question him..
go ahead.

I’m all ears.
Always willing to change my mind if I see new evidence..

But sticks and stones don’t really do it for me..

So I figure why bother? clearly this person is not willing to listen to reason. And I imagine you probably feel the same way about me.

good luck to you.

CDSs are being used to blow smoke in the face of the failed to delivered problem.. or counterfeiting problem…or stockfraud problem (aka Naked short selling). If you go to the Deep Capture site, you’ll see they talk about counterfeiting, insider trading, collusion with the media AND CDS.

But CDS is only a tool. If you’re going to ban CDS, you could as well ban equities, as Roger Ehrenberg wrote in a recent Business Insider post. They were not a problem prior to 2006 when they were specifically used in a fraudulent manner. The problem isn’t CDS (the knife). it’s illegal, fraudulent behavior (the murder) and the guys who do it (murderers).
Don’t put the knife in jail. Put the murderer in it.

CDS has been abused and used as a speculative tool while selling it as a hedge. Over insuring is the problem with CDS – ie. buying CDS worth multiple times the value of the loan or bond underlying. So – yes, that’s part of a general problem of leverage.
But the specific way CD was used was, I suspect, to manipulate it and thus the indices that relied on it to create panics about businesses that were then massively shorted by colluding funds.

I’d think a lot harder about that house analogy….

The problem is efficient market theory and the idea that prices at all ends of the spectrum operate in the same way, when manifestly they don’t – which is just what astute traders live off, even if they don’t always understand it.

Einhorn in my humble opinion is full of it.

namely excessive leverage and horrific derivative products like Credit Default Swaps.

As for the rest it’s pretty simple don’t use mark to market accounting then if you are worried about it. A lot of firms don’t. If your business goes bankrupt from one day’s worth of price action guess what? You have too much leverage anyway.

as for the house analogy, it wouldn’t bother me if someone shorted my house. After all it’s one guaranteed future buyer. I now have greater liquidity and price stability for my asset. As long as I don’t have excessive leverage I can easily wait them out if need be.

Re falling off the cliff..
If prices go down sharply, with mark to market accounting that means valuations in the portfolio change drastically, that means reserve requirements rise, and credit gets cut off..

By the time speculators come around to bid up the price, the business has gone bankrupt….even when it’s not that bad a business.

Imagine you have a house..not the greatest house…maybe it needs some repairs..maybe the market is soft and the price is dropping.
Now would you let perfect strangers who don’t have title put fraudulent titles up for auction and determine the price of your house from that?

Up moves in a market are quite different from down moves. Any trader knows that. Booms climb a wall of worry. Busts are like falling off a cliff. Even the most parabolic rise can’t
match a crash in momentum.

They certainly deserve different regulatory treatment.

Lila Rajiva