The Securities & Exchange Commission should be purged, Sony still doesn’t know it’s irrelevant, covered CGA short, shorting VXX again
All along my daily commute, I see ample evidence of government incompetence and waste. At the PATH station in Jersey City, several police officers stand around chatting with one another as if without a care in the world. Any work they do is half-assed–for instance they check people’s bags for contraband at the right-hand entrance but not at the left-hand entrance. Why bother frisking anybody if all a terrorist has to do to avoid you is walk 15 feet? The incompetence and laziness of police officers is scary because our safety is at stake. But consider what goes on among other government institutions–and it’s almost equally scary.
The SEC couldn’t detect Madoff’s fraud even though numerous investigators had exposed him, they went on a witch hunt against short sellers during the financial crisis and now they can’t punish Moody’s even though executives have blown the whistle about various securities violations. Maybe I’m biased on this last point, because I have a short position in Moody’s. But it’s only 5% of my AUM, too small to make much of a difference. The SEC claims that it doesn’t have jurisdiction to sue Moody’s. That’s bullshit. The truth is that Moody’s has negative net worth and a civil suit settlement à la Goldman Sachs would bankrupt the company. For political reasons the SEC can’t destroy the rating agencies, and once again they are doing the wrong thing by investors.
Another newspiece that made me chuckle: Sony is coming out with a music and video subscription service to compete with Apple’s iTunes. Do you remember when Sony tried this five years ago? Of course not. That’s my point. Sony Connect had the backing of Sony’s huge music catalog and millions of dollars of advertising tie-ups with McDonald’s. And still it flopped. Nothing will change this time around.
Sony’s failure in digital media is amazing to me (a once avid Sony fan/historian). Traditionally its competitive advantage came from superior and innovative hardware. However, after Betamax lost out to VHS, Sony realized that owning content providers (Columbia and MGM) would allow it to push its own media format and thus establish a stranglehold on electronics users. But it didn’t work out that way. iPod came around and sent the Walkman into oblivion. The “content is king” paradigm has been disproved. Ah, the genius of Apple.
China Green Agriculture is a fraud beyond a shadow of a doubt. In three trading sessions, my short position has earned over 18%. I covered today and may re-short tomorrow on any pre-earnings bounce.
I also re-shorted VXX today on its morning bounce. Why doesn’t the SEC go after Barclays for creating such a terrible product? Sec.gov posted that individual investors should avoid buying shares of Motors Liquidation, explicitly stating that they would lose value. Perhaps the SEC should also post a warning about VXX, seeing as how the prospectus practically guarantees that investors will lose their principal.
If I recall correctly, Dante mentioned a circle of Hell reserved for useless people. You may say I’m harsh, but I know an entire government institution that belongs there. It does a bad job of frisking potential offenders. And when it does find contraband, nothing is done unless there’s some political motivation to pursue it.
