Bait and Switch!
Why wouldn't they do it this way? These institutions hid their losses on their balance sheet just like Lehman Brothers and AIG did. The only difference was Lehman advertised in tennis matches and AIG advertised on television. Both were criminal enterprises, but AIG was bailed out because they owed the banks that got the money under the TARP!
But the losses in these banks are still staggering. Why else is Citigroup in single digits? That answer is easy. It is insolvent. Why did AXP get hit today when they said they wanted to borrow $3.5 billion from the Fed? Why did GE get hit when they said the Fed would backstop $130+ billion of their commercial paper? Well what's the difference between the rate on commercial paper with the Fed's backing and the 10% GE had to pay Buffett for money? Do that for $536 billion and now you are talking some real numbers. And then ask yourself why should GE trade at more than 6x earnings when they are a hedge fund?
At least the market is finally asking that question to Goldman Sachs! Is there any transparency in Blankfein's obtuse statement yesterday when he said that level 3 leveraged loans, and mortgage securities now make up less than 82% of their capital? Why did Goldman Sachs mysteriously spike up yesterday in trading? Oh that's right--Lloyd "Chinese wall" Blankfein spoke about Goldman Sachs after the close yesterday, and market players were just front running this news! Did anyone suspect anything different? These guys are as transparent as the hedge funds who will be testifying before Congress tomorrow! Meanwhile, Goldman Sachs gets the free pass just like Timothy "no nothing" Geithner of the NY Fed!
Will anybody ask James Simons tomorrow about the naked shorting his hedge fund participates in? We already know that answer. Just look at Philip Falcone of Harbinger Capital and his short of 117 million shares of Wachovia stock of which he made $2.5 billion for his fund. The news of this trade was plastered around everywhere.
The only place you couldn't find the trade was in the monthly short-interest figures! And how did he get the figure of 117 million shares? That's the total number of shares that were short in Wachovia at April 30th! The short interest only went up 3 million shares by May 15th when he supposedly put on these shorts!
So if this $2.5 billion dollar profit on this trade of 117 million shares of Wachovia stock mysteriously doesn't show up in the short interest figures, what chance is there that James Simons' shares will show up either?
That's a question you need to ask their prime broker! But then again, who was the prime broker of Harbinger capital when they were doing these Wachovia shorts?
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