Hedge Funds and the Global Economic Meltdown (Part 3)

if you destroy the stock of a company you destroy it's credibility, if you destroy it's credibility to those degrees people get in a panic and want to severe ties as much as they can. Destroying the stock of a company can easily destroy a company, i would say if it's done gradually the company can easily get out of it but if done to the degree which it was done to these companies it will ruin them. All aspects of economics are connected in one way or another, stock isn't completely separate to the company, that would be nonsense.

Amazing videos. Does anyone notice at 4:35 the bottle of King Louis in the background. That bottle is $8000.

With Steven A. Cohen is getting hit with insider trading by the SEC, maybe this is a around about way of hitting him for the Lehman and Bear Stearns downfalls. Of course, is you use naked short selling, then I see no reason why you would not resort to insider trading. This guy is plain dirty. Sadly, he as many associates as dirty on Wall Street.

Sorry I realized your video is about BSC but I was talking about LEH. However, my point still stands that your video is WRONG & FUD. Why you quote politicians on your video who clearly don't know a thing about financial markets? I am a full time RETAIL options trader, and I used to work at a stat arb hedge fund so I would be glad to discuss this topic. Here is a academic study on the issue that supports my view. cfr-cologne(dot)de/download/workingpaper/cfr-09-09(dot)pdf

6. Forget hedge funds & NSS. Why don't you investigate Jamie Dimon? LEH is suing JPM for hastening its bankruptcy by using insider knowledge of LEH distress. $8.6 billion of collateral was extracted in the 4 biz days prior to the Ch11 filing. In retaliation, JPM is suing LEH & Barclays. JPM contends that Lehman left it with $25 billion in unpaid loans secured by toxic assets like those left out of the sale to Barclays. These big boys that can sit w Geithner & destabilize our economy.

5. BTW a lender could easily put a collar on a declining stock. But LEH couldn't hedge their portfolio because the assets were illiquid. LEH was in trouble from burst of housing bubble (Feb 08) & the stock price showed it. They had a terrible CC on Sept 10. Moody's said unless they needed to sell off a majority stake to avoid downgrade. On Sep 15, LEH filed for bankruptcy. It was indicated that JPMorgan Chase provided LEH with a total of $138 billion in "Federal Reserve-backed advances."

4. Where did you get the info that they put up stock as collateral for loan? That's also FUD. On April 2008, they raised $4B by issuing *preffered stock* at 32% premium to current stock price at the time. Right there is a 'manipulation' to boost the price. But too little too late, their assets were overexposed to the subprime mortgage fiasco and no bank wanted to touch the toxic assets.

3. Your thesis is the same PR distraction Fuld used to redirect blame away from himself onto "naked short sellers" & "rumor mongers". The reason Lehman collapsed is because they were leveraged to the hilt. By 2007 their asset to shareholder equity ratio was 31 and they had most of their portfolio in mortgage backed securities. LEH was "Dead Man Walking". We all saw Bear Sterns go through the same thing.

2. A hedge fund conspiracy is ILLOGICAL because they are competing w/ each other. It'll never happen because of *front running*. Occam's razor says most probably some *individual(s)* speculated correctly that LEH and banking in 2008 was deep in fiscal doo-doo. As the price fell; more sellers piled on. Nothing unusual about this or playing weeklies prior to a CC with expected bad news. I bet the implied vol was sky high the time.

1. This video is WRONG, over-dramatic & hyperbolic. An attempt to defame hedge funds with FUD. Author is inaccurate about financial markets & history. I'll repeat what others have already stated; your cause/effect thesis is upside down. You present no evidence that shows correlation of buying puts and subsequent short selling as anything other than some bears who made money. (Are you also aware that protective puts can be purchased to hedge a long position?)

Interesting, since the troubles began in the middle east we have suddenly been getting Al Jazeera on our satellite network. Today they announce the despicable Hedge funds in London are speculating on commodities such as food like RICE, WHEAT, CORN. They could well starve nations if I follow your information correctly. This must be stopped on a worldwide basis. By the way loved your video, been trying to follow this mess.

... and they shall grind the face of the poor.

writerjudd: Wonderful video! Thank you! However, I must agree (sort of) with @Investing Today. Short selling -- even naked shorts -- CANNOT bring down a company, UNLESS the company's working capital is dependent upon the price of its stock holdings. Typically, that can only happen a company borrows money by using the prices of its own shares as collateral.

all the names that are with the countrys that when under is one name George Soros check this monster out

wow, so the economic colapse was orchestrated by the rich so they could get richer??!!! Holy shit, i thought it was just the rich. If this is really true, we need to find these people, and put them all to death for treason against the american people !

3:36 - No exaggeration, I was watching this video all alone, and when that first picture slid in from the side, I actually screamed out "THAT'S A HOUSE??"

2 words......George Soros

hail the triumph of capitalism,the socialists are ruining this nation ,they are eroding the freedom of the capitalist to do what they do best........it is not a sustainable system......unavoidably corrupt to its core

As you say "banks operate on -10% capital reserves", that too is naked short selling. I cannot loan someone money I do not have, the only way that the banks can is because government 'guarantees them'. When the reality is that government, like the banks, have virtually no capital, when they 'guarantee' the banks, they are forced to print the money used to back up the total short position. Leading to inflation, aka, stealing money from everyone who owns fiat currency. It's all fraud.

completely misses the point. That's like blaming the mailman for delivering bad news. The hedge funds made it clear that we screwed up. And they are right.

Hedge Funds and the Global Economic Meltdown (Part 3)

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