John Paulson's "Greatest Trade Ever" - Something of a Scam -01/20/10 at 10:34 PM CSTby Mark Mitchell

By now, everybody knows that the market for collateralized debt obligations was riddled with fraud in the lead-up to the financial crisis. What is less known is the fact that hedge fund managers helped create and inflate the market for these toxic securities specifically so that they could bet against them and profit from the inevitable collapse. An examp...

SEC OIG Investigating SEC Complicity in Naked Short Selling of Dendre... -12/01/09 at 6:35 PM CSTby Mark Mitchell

The Office of the Inspector General of the Securities and Exchange Commission not long ago submitted a semi-annual report to Congress. There are two items in the report of interest to those of us who have argued that the SEC has turned a blind eye towards, or even assisted, unscrupulous hedge funds that make their fortunes destroying public companies for ...

Bank Of America Corp's Preferred Trusts Continue to Trade at Irration... -03/04/09 at 10:21 PM CSTby Perry Rod

In my first installment of this issue on February 20th, I highlighted an unusually enormous spread between the yields of nearly identical Merrill Lynch and Bank of America preferred trusts.  In particular, MER-C on that Friday closed with a yield of 26.79% while BAC-U closed with a yield of 15.58%.  It turns out that on that parti...

With Citigroup and Bank of America Leading The Way, The S&P 500 Is Ha... -02/23/09 at 6:45 PM CSTby Mahyar Hashemi

Things are getting ugly in an unprecedented way.  Last month, The New York Times reported that the S&P 500 was having its worst decade yet as of the end of January 2009, with a 5.1% ten year drop after accounting for inflation and reinvested dividends.  That beat the previous record of 1974 when the S&P 500 dropped 4.7% in a ten year per...

An In Depth Look Into Bank Of America Corp Preferred Trusts And Their... -02/21/09 at 5:07 PM CSTby Perry Rod

In my last installment, I showed that Bank Of America (NYSE: BAC) preferred trusts are trading at yields that are completely arbitrary when compared to their own nearly identical trusts.  I further pointed out that the Merrill Lynch Trusts, which are basically the same trusts with the exact same terms, trade at an even greater discrepancy. Let's get...

Bank Of America Preferred Stocks Trading At Dramatically Different Yi... -02/20/09 at 5:37 PM CSTby Perry Rod

Only in unprecedented times like these will you ever see the following situation.  Merrill Lynch Trust Preferred stock (stock symbols MER-D, MER-E, MER-F, MER-K, MER-P, MER-U) closed on Friday with an average yield of over 26%, while the virtually identical and better known Bank of America Trust Preferred stock (stock symbols BAC-B, BAC-C, BAC-U, BAC...

The United States Oil Fund: A Way to Short The Market? -02/19/09 at 6:34 PM CSTby Reggie Abaca

With fewer people working in the United States, fewer people have been driving.  It had been assumed that this would cause a new trend of falling consumption of oil, as was the case in the early 1980's.  But hold on there.  Oil prices shot up on Thursday after government data showed that oil inventories unexpectedly fell and consumption may...