Baltbear on Finance markets are like marshmallows

Over and over, most recently from matt taiibi in rolling stone, and from countless others on internet stock boards, there is a resurgence of the fiction of “illegal naked shorting.”
First off, things regarding the mkts are regulated by the sec, which is a division of the federal reserve, which occasionally thru its chair reports to congress, which passes laws.
but, until e-bay starts reworking the constitution, (after meg whitman goes from california governor to ceo of usa inc,) and a constitutional convention is done through google buzz, “legal” and “illegal” have nothing to do with shorting of any kind. “scummy” “duplicitous” “screwing with walres law with the logical result”…yes. and? “well it oughta be” and other forms of jousting at windmills have but one answer: “go buy your own congressmen and get ‘er done.”
in addition, exchanges pass rules concerning their members and traffic that may be tighter than the actual regulations set by the sec.

example? sally is a secretary for greengobble partners, which is busy doing a long slow take under (at shareholder expense… ok..that’s so “well, duh” it shouldn’t be stated) of buymetimesickles, inc. while running the copyer, she notices that buymetime is putting out an 8k, restating the 4th quarter of 09, as if the 4th 1/4 was a  a separate event from the 4th 1/4 discussed in a 10k filed 3 weeks earlier, and announcing 1st 1/4 results for 2010 19 days before the 1/4 is over–unless buymetime has changed its calendar–which of course it has done before. further, the 8k states that a previously announced discount on warrant execution hasn’t really, well, yaknow…happened. cuase somebody “forgot” or something, to register it, after filing an 8k stating it was a done deal, cause buymetime wants to siphon corporate funds into an inhouse shell corp, one of 2 it has created.
sally tells this to bob, the limo driver for larry the lion. bob mentions it to larry while on the way to a brothel on the upper east side run by a dutch immigrant, who will later call her broker and tell him to short the puppy if it spikes. oddly, the open will have a 10% upsurge, 5 - 5 1/2, possibly because greengerbils llc on lasalle st in chicago (run by the son of greengobbles sr partner) is doing a placement to his private clients of some buymetime treasury stock issued in april, and approved by the shareholders in october. since the chart shows 5 1/2 as the shorts’ reasonable nibbling point, and any kind of f/a shows a reasonable price <2, and hitting 5 1/2 and covering 5ish is an easy 3/8 - 1/2 in less than a month, thereby yeilding >100% apr, being troubled with a “locate” is not really an issue. especially if the clearing house also is the owner of a million or so wts.
insider trading? yup. becuase sally has a “fiduciary duty” not to mention this to bob until the “press release” stating that the 8k will be filed some time later is “issued” by having somebody at buymetime inc, hit the internet for “free press releases” and place a few.
illegal? if it could evvver be hunted down (and fans of spiro agnew or raymond donovan will recall that it can be hunted down) there’s a 50/50 chance someby will call it illegal to keep the profit, if it came from using tax payers money (as fans of spiro agnew and raymond donovan will recall). if >sally< traded it, her action is a violation of sec rules. if she >lied< about it, that’s a felony (as fans of martha stuart will recall).
now, if somebody at phonypressrelease’r'us.com has a  server side script set (based on past results) such that whenever buymetime, inc opens their account to prime the pump his skype account starts dialling his broker in frankfort, then you would have an exchange violation on nasdaq. (on amex, it probably gets u offered a job as a floor runner.)     however, by sec rules, it’s >not< insider trading.
“regulations” do not make things  legal or illegal…. the idea of “illegal naked shorting” is a head game played by stock promoters.
was i referring to any given “real” ticker in the above examples? regular visitors to this corner will hear the bell ringing.

a day or 2 ago a number of distressed financial stocks rallyed hard on the rumour—which the sec promptly denied, but nobody cared—that there was gonnna be a rule stopping all this blahblahblah…
i often find it uttterly amasing and laffable that people won’t bet $5 on a rugby game becuase they don’t know the rules, teams, etc…but will bet their family’s wealth on a sport where they are equallly ignorant of the rules, teams, players, etc…for no other reason than when the players suit up they are wearing uniforms by allen flusser.
i am occasionallly totallly non-plussed when a matt taibbi (who can explain a default credit swap) pretends to not know what a “put” is, or tries to argue that gs’ effort to bail out housing with trading profits from oil, and bail out the fed res’ ability to bail out banks by buying notes that are so derivative as to be intangibles is seen as some “evil plot”.
i am occasionally totally disgruntled when stock board posters, hypers, bucket shops, and the running dogs of the greengobble partners of this world tell people to keep buying becuase all the chicanery is “going to be investigated any day now.”
that will of course happen the day after they start serving high tea on the playing field whenever a rugby player hits the dirt.

Posted under business

Rolling Stone, which has almost redeemed itself by paying attention to the economy for a change, had a recent article about the insiders from goldman-sachs taking a large bite out of the future faith and cresit of the government of the usa. sadly enough, as part of its maintaining its perpetual whininess, it describes some evil plot in which people who cannot put “credit default swap” into an intelligible sentence are being picked on by people who can.
my answer to those who complain that they do know what a toxic debenture is? learn or shut up. if people can be bothered to “research” the love lives of stevie nicks and lindsey buckingham, they can learn to keep track of how the economy works.

When the prudent speculator is testing a story stock, it is usually quite useful to look for so-called stock boards, like
http://messages.finance.yahoo.com/mb/BTIM.OB
where the legitimacy of the views being put forth by present holders can be tested.
another might be:
http://moneycentral.msn.com/community/message/topicsandtickers.asp?Symbol=BTIM
o. look. msn doesn’t bother with stocks kicked off the national exchanges and lurking around on bulletin boards.
john f. kennedy once said about lobbyists of varying kinds, “where there is smoke there is a smoke machine.”
on penny stocks there is an entire smoke industry (which oddly enough, does not ave an naics number). a way to hunt down the smoke from the fire is to look in filings for “investment services” being documented with transfers of stock or cash (sometimes both) t create “buzz.” that buzz will first go to preferred suckers on the phone, then to less preferred subscribers to “investment letters” and once that’s in place, then to whatever stock board or chat room somebody can post to.
a clue to such posters is that they generally refer to any discussion of th story or the fundamentals  as “paid bashing” by “evil shorts” etc.
the saddest cases happen when somebody who thinks equities trading is like football fandom becomes a brain dead cheerleader for the story, and continually hhypes about some future price, like..5, or 12..or “when the puppy is on the nasdaq national market” and offers that as the only dd he has. thirty years ago, when penn state et al were starting the snowball rolling, fleetwood mac sang about breaking a chain,  a story believed without due diligence.

Posted under business

According to biotime sec filings (btim.ob)

:”Current loans under the Credit Agreement bear interest at the rate of 12% per annum and will mature on April 15, 2009, at which time the outstanding principal balance of the loans plus accrued interest will be due and payable. Our ability to continue in operation depends on our obtaining a renewal of the Credit Agreement that will extend the maturity date of the loan and increase the amount of credit available to us.”

so, it is now april 16th. yesterday, the market reacted intelligently to the known facts (thew ones that deny the nonsense of obama= stem cells = west = btim biotime = $$$).

let’s compare this puppy to the largest commercial real estate fir in the usa:
:”"When we did not achieve the necessary amount of agreement on the bond solicitation, at that point we recognized that it was conceivable that we would not get the time outside of bankruptcy that we had hoped for to work on a restructuring,” General Growth President Thomas Nolan told Reuters.”

has biotime bothered to tell the 4500 or so shareholder anything about , generically, “how it’s going” ?
well. no.
that woiuld be silly.
they got the shareholders money. well, no..they didn’t.
the insiders got the shareholders $$$ by being able to short an open box; thereby regaining their risk capital and absorbing, steadily, all of the financioal advantage.
wo else benefits?
let’s go back to the mall bankruptcy:
:”"We will see a significant rise in delinquent and defaulted mortgages in commercial real estate above and beyond what we already experienced,” said Sam Chandan, president and chief economist at research firm Real Estate Economics”
this is something that might be less true in the swams near san francisco where biotime shareholders have spent a largish amount of money in a locked lease that contrbutes to real estate profits, not bodily health.

a fast look at an overly simple 5 day chart gives some clues:
http://finance.yahoo.com/q/bc?s=BTIM.OB&t=5d&l=on&z=m&q=l&c=

imho the fact that btiome could not successfully publish to the sec and the public the reults of the negotiations which it stated must be completed by april 15
says that biotime is playing a losuing hand and willfully misrepresenting itself to the “investor” who will fall for the pitch.
the prudent speculator will require some transparency, and stay away until that transparency is present.

Posted under business

let’s talk about biotime, as a classic story of how to read a tape, a chart, hear a story, and watch the trader get screwed.

recently th stock has been "very active". rumours started a few month ago about obama liking stem cells, and oddly enough biotime was suddently in th stem cell business.

volume kept slowly increasing, and the ticker moved up to a 4 bagger for some sharp traders. i commented on this elsewhere.

but in a "story stock" sooner or reality tere needs be a reality.

and here it is:" The maturity date for the amended line of credit has been extended from November 15, 2008 to April 15, 2009. As of November 17, 2008, certain lenders elected to convert $1,050,000 in principal and $62,013 of accrued interest on their loans to 1,112,013 BioTime common shares."

:"$16,956 in investor relations expenses"
biotime continues its long term trend of selling stock to meet "expenses" and continues to do nohing. ho many years between phase ii trials for hextend, and the end of phase ii for pentalyte? 10 and counting…10 years to demonstrate one stasticially verifiable outcome. in the meantim, hextend works. hextend works, no matter hat shortsellers wanted to say about it.
  what doesn’t work is the revenue model. becuase of the, lol, "management team."

so… for a couple of months the pump and dump specialist were paid a lot of stock and cash to create some action for btim.
  how many share were shorted into the run? at what prices?
 the average "investor" or trader will never know. never.
 becuase nasd allows insamely late reporting on short interest.
 and if te short was covered inside a 30 day reporting period, to the guy at te end of the chain, it never happned.
 and then, one fine day, and i specifically asked people "where are these shares coming from" a million shares "changed hands" that is, went from treasury to street, and the exchange registered the traansaction.
 a level ii scren would probably have shown bloks of 50k hitting th tape.
 and some people would have nibbled in to that stream, and bought more.
 the stock ended down that day. but the volume average will be distroted for 3 months, and then come crashing down. in the meantime, brokers and hypesters will tell cleints, yes it was down, but on far below average volume…don;t worry, be happy.
   in th meantime..there’s <$60 cash on hand, and another loc for another million bux. incoming cash is eaten by debt service:
"Royalty revenues recognized for that three-month period were $341,391…
For the nine months ended September 30, 2008, we incurred a total of $366,795 of net interest expense," ….
   so what does btim offer to anyone wanting to roll it up or be rolled bu it?
   i’m still seeing 5/8 coming as a price. i had said within 60 days of the new dc admin. it might be a while later, becuase of the effectiveness of the pump.
   but based on anyt f/a, cmbined with th story, 3/16 is actually high for the actual value by p/e, (negative) p/s call it 12 for generosity,8 for a norm), or eps (stated unknown becuase of military sales) or, lol… 2x book.
  

Posted under markets