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February 26, 2001
1:42 PM   Subscribe

from this weeks nyt mag: a fantastic article by the always-excellent michael lewis: Jonathan Lebed: Stock Manipulator, S.E.C. Nemesis -- and 15
posted by palegirl (7 comments total)

 
Amazing piece by Lewis (read his "Liar's Poker" book if you're impressed by Wall Street people -- you'll be far less impressed by them when you're finished reading). It really shows you how the market is fundamentally rigged -- it's not really news, ok, but Lewis' interviews with the hapless SEC people are really something. Print the story, and show it to a friend who takes money people seriously. This story basically demonstrates that when people in suits appear on CNBC to try and sell you bad stocks, they're called analysts and traders. When a kid from Jersey does exactly the same thing on Usenet and Yahoo, the SEC comes to bust him.
posted by matteo at 5:49 PM on February 26, 2001


and another major point of the piece is that "the S.E.C. let Jonathan Lebed walk away with 500 grand in his pocket because it feared that if it didn't, it would wind up in court and it would lose. And if the law ever declared formally that Jonathan Lebed didn't break it, the S.E.C. would be faced with an impossible situation: millions of small investors plugging their portfolios with abandon, becoming in essence professional financial analysts, generating embarrassing little explosions of unreality in every corner of the capital markets. No central authority could sustain the illusion that stock prices were somehow "real" or that the market wasn't, for most people, a site of not terribly productive leisure activity."
posted by palegirl at 6:44 PM on February 26, 2001


Another great *now that the box is open* story. Who can you trust for good financial market predictions? I suppose understanding the game is the start, as it is with everything.
posted by vanderwal at 6:11 AM on February 27, 2001


Wow.

Congratulations, kid, and go dump that half million in a mutual fund before you spend it. Then spend the rest of your life raising hell. The world needs it.

-Mars
posted by Mars Saxman at 12:39 PM on February 27, 2001


So that means if I buy a bunch of penny stocks touted by a bunch of the same postings on yahoo messageboards that later tanked mean that I'm in fact the victim of fraud and not of my own stupidity?
posted by gyc at 2:34 PM on February 27, 2001


"Whether it is analysts, brokers, advisors, Internet traders, or the companies, everybody is manipulating the market. If it wasn't for everybody manipulating the market, there wouldn't be a stock market at all. . . ."

Outstanding. Mars, I hope he CAN dump that cash in a mutual fund. But I suppose his parents have the final say, and the article does not foster a sense of faith in their stability.
posted by Skot at 2:42 PM on February 27, 2001


How I love Michael Lewis. I could read stuff by him all day. Every time, I think, "And to imagine that I normally think investing and securities law are boring!"
posted by redfoxtail at 4:25 PM on February 27, 2001


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