Gary Weiss on the verge of a nervous breakdown Options

[WordBomb]

I'm told that all the recent tinkering with the article autobiography on Gary Weiss has put Weiss himself in a strange place, psychologically. He -- as Mantanmoreland -- has been begging many former allies for intervention and even asked ArbCom -- as Stetsonharry -- to be unbanned.

Of course, Stetsonharry was shown the door, but not before expressing his deep, DEEP, red-faced, vein-bulging, scowling disappointment.

Apparently it was Huldra's inspired addition of the Wikipuffery category that really set him off.

If had a devious side, it might suggest that just a little more improvement of the article (and it could certainly use more than a little improving) would yield some really interesting Weissian fireworks.

[Floydsvoid]

Dammit Jim, I'm a programmer not an accountant.

I don't get the dispute about NSS. Now I might understand short selling. If I borrow `x' amount of stock from a lender payable at a later date then I could reasonably assume he has x amount of stock in hand. If the stock goes down like I predicted then I give back to the lender x amount of shares and pocket the difference.

But in NSS if I borrow x amount of stock, the lender might not have x amount of stock on hand and in fact the total shares of stock, lent and otherwise, may exceed the total number shares? This smells of `virtual stock' and can't be a good thing, right?, much less legal?

[WordBomb]

Dammit Jim, I'm a programmer not an accountant.

I don't get the dispute about NSS. Now I might understand short selling. If I borrow `x' amount of stock from a lender payable at a later date then I could reasonably assume he has x amount of stock in hand. If the stock goes down like I predicted then I give back to the lender x amount of shares and pocket the difference.

But in NSS if I borrow x amount of stock, the lender might not have x amount of stock on hand and in fact the total shares of stock, lent and otherwise, may exceed the total number shares? This smells of `virtual stock' and can't be a good thing, right?, much less legal?

That a market maker (a subset of stock broker/dealers whose job it is to always be available to buy or sell shares of certain companies -- ie "make a market" in those securities) is able to sell shares not immediately available in its inventory is a good thing. But it should happen rarely and only in the interest of keeping markets fluid.

What we've discovered is that the "hack" (meaning, the flaw in the system) is in options market-making, and the flawed people willing to assist would-be naked short sellers in exploiting that hack are operating in options brokerages in Chicago (precisely where Jimbo Wales made a living, pre-Wikipedia...only a coincidence, but an interesting one).

Here's how it works: the manipulator buys an equal number of at-the-money puts and calls (in huge blocks) with identical expiration dates and strike prices. This is called a perfect hedge and is a riskless investment (also most likely to be worthless, by the way). The short seller then exercises the call options, though in such quantities, the options market maker is almost certainly only able to fill the order through liberal use of "share equivalents" (virtual share IOUs). In this way, the short seller is technically selling shares long, while it's the options market maker who is (naked) short the stock.

At that point, with a huge arsenal of virtual shares, the short seller peppers the market with small quantities of these IOUs, in a manner referred to as "attacking the bid." This simulates high selling demand and price always drops in response.

In and of itself, this practice is antithetical to efficient markets, but the real problem is the false signal this price movement sends real investors, who see downward movement not related to any new information and assume it's insiders unloading shares in response to something the rest of us don't yet know. The result is more and more selling and, if the manipulator goes about it correctly, a "demoralized market" in the security.

It makes no difference what the report says, Lehman Brothers could NOT have been killed in September of 2008 by information unavailable to the market until February of 2010. Instead, Lehman was killed by a plummeting stock price, which was sparked by illegal, manipulative trading and brought to completion by millions of uninformed investors running for the exits in response to what they assumed was informed selling on the part of all the other people whom they suspected knew something everybody else did not.

All this is in my book, by the way...which better fricking be finished this year.

[Cla68]

All this is in my book, by the way...which better fricking be finished this year.

Are you going to talk about the Weiss-Wikipedia episode in your book? If so, I assume that your book could serve as a reliable source for adding information about that saga to the related articles in Wikipedia.

This post has been edited by Cla68: Tue 6th April 2010, 4:22am

[WordBomb]

All this is in my book, by the way...which better fricking be finished this year.

Are you going to talk about the Weiss-Wikipedia episode in your book? If so, I assume that your book could serve as a reliable source for adding information about that saga to the related articles in Wikipedia.

I have PLENTY on this subject. In fact, it comprises the first two chapters I wrote (though these are not the first two chapters in the book...they're middlish). However, at this point the book is running a little long, and I'm coming to accept that these are going to be the first things I cut when forced.

Of course this means I'll have to find another venue to publish some of the SV Wikistalking list emails in my possession...including the one from 2007 in which David Gerard, Jimbo, Mantanmoreland and Samiharris successfully work out among themselves how to confuse AP reporter Paul Foy out of writing a story about the banning of my entire neighborhood and Overstock.com.

I sent that particular email to Mr. Foy a few weeks ago, by the way.

Say, did anybody notice this story today?

[Cla68]

All this is in my book, by the way...which better fricking be finished this year.

Are you going to talk about the Weiss-Wikipedia episode in your book? If so, I assume that your book could serve as a reliable source for adding information about that saga to the related articles in Wikipedia.

I have PLENTY on this subject. In fact, it comprises the first two chapters I wrote (though these are not the first two chapters in the book...they're middlish). However, at this point the book is running a little long, and I'm coming to accept that these are going to be the first things I cut when forced.

Of course this means I'll have to find another venue to publish some of the SV Wikistalking list emails in my possession...including the one from 2007 in which David Gerard, Jimbo, Mantanmoreland and Samiharris successfully work out among themselves how to confuse AP reporter Paul Foy out of writing a story about the banning of my entire neighborhood and Overstock.com.

I sent that particular email to Mr. Foy a few weeks ago, by the way.

Say, did anybody notice this story today?

I can't wait to see how Weiss' latest sock(s) reacts the first time someone uses your book as a source for information in the NSS (or Weiss!) articles.

[written by he who wrote it]

<snip>

I can't wait to see how Weiss' latest sock(s) reacts the first time someone uses your book as a source for information in the NSS (or Weiss!) articles.

There's a script, which I'm sure you know: a not-canvassed-at-all-no-sir chorus will descend on the page, all singing some variation on the theme of "UNRELIABLE SOURCE! ATTACK PAGE! BANNED USER!". The text will be tossed down the memory hole and an admin who is entirely uninvolved -- entirely, I assure you -- will protect the page, perhaps toss out a few blocks.

I could be wrong. Certainly most of Gary's dupes have realized by now that they were duped; maybe they'll be ready to admit it, or at least to abandon their positions quietly.

[The Adversary]

-- will protect the page, perhaps toss out a few blocks.

..for three months, no less, with all puffery intact.