.

Insta-Reporting, Clusterstock-Style!

POSTED:
Today he posted a video allegedly showing a "day trader" shorting tens of billions of shares of a stock with a float of only 5.5 billion shares. The trader allegedly executes his trades through the clearinghouse Penson.

via Matt Taibbi Falls For A Naked Short Selling Hoax Video.

The idiots at Clusterstock, just one week removed from making the uniquely asinine (even for them) claim that there is no difference between short-selling and naked short-selling, have struck again, proving once again that it is always best to actually put down your paper bag full of airplane glue fumes before you make blog posts.

Business Insider writer John Carney here seems to have read my recent post on Penson and taken from that that I was reporting that someone had executed a short sale of tens of billions of shares in a company whose float was only five and a half billion. This would, indeed, be ridiculous. Except that is not at all what I reported.

What I published was a tape of a trader asking for a locate of tens of billions of shares. It is the size of the locate, and the speed with which it is approved  that is the issue, not the trade. The actual trade, if Carney had bothered to read the text, was only for 100 shares.

Carney then goes on to claim in another post that the "system" worked because a second trade was rejected at :27 on the tape. But this is a second trade for a larger amount of shares that was rejected not because of the locate but because the trader in question had insufficient funds in his account to make the short sale. It has nothing to do with the locate and is completely irrelevant to the story.

Nothing like good old-fashioned, fact-checked journalism by the good folks at Clusterstock! No wonder they're on such good terms with Goldman Sachs, who was good enough to provide them with the full version of the fact sheet they distributed to Congress last week, and which I first reported here on this site. Hilariously, Clusterstock was in that instance unable to accurately report information given to it by its own sources at Goldman. They originally wrote that Goldman had "denied circulating a fact sheet" to politicians.

Then they came out shortly afterward and admitted that they had had a "miscommunication" with Goldman, and that what Goldman was telling them was not that they hadn't circulated a fact sheet to politicians, but that the fact sheet they had circulated was not about naked short-selling. Which wasn't true either, but whatever.

It is really not easy to fuck the reporting process up that badly that many times in a row. But some of us, it seems, are just born with the magic touch. God bless these guys.

p.s. I wasn't going to say anything about this, but it's worth pointing out that Joe Wiesenthal was also posting on my site (see below, under the name Stalwart) and referencing his own site's articles as "proof" that my story was a hoax. I confirmed with him that that was him. I'd heard stories about reporters doing this sort of thing, but I'd never actually seen it. What a strange character.

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Matt Taibbi

Matt Taibbi is a contributing editor for Rolling Stone. He’s the author of five books and a winner of the National Magazine Award for commentary. Please direct all media requests to taibbimedia@yahoo.com.

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