Monday, April 24, 2006

The Smear du jour (redux)

I've tried, without much success, to avoid chronicling the ongoing con game that calls itself the "anti-naked-shorting campaign." But alas, the odor has become too overwhelming to ignore.

A reader brought to my attention a particularly noteworthy post that appeared last night on Yahoo's Overstock message board. The author of the item was the bravely pseudonymous proprietor of the "sanitycheck" conspiracy-cult website, "Bob O'Brien." (He's actually a former used medical equipment salesman named Phil Saunders, according to the NewYork Post.)

If you wonder why this creep Saunders uses a phony name, here's why.

As I have noted in the past -- see this and this -- this paranoid crackpot, a favorite information conduit of Overstock's loopy CEO Patrick Byrne, has a special way of dealing with people who disagree with him.

"O'Brien's" technique is disarmingly simple: He accuses them of being corrupt. Hey, he's got to say something, right? He can't very well present facts in support of a nonexistent "stock counterfeiting" scandal. There are no facts, just a lot of meaningless statistics. There is no scandal. So instead he and other cultists use good old-fashioned, anonymous smears.

The latest target of an "O'Brien" smear was Forbes editor William Baldwin. Seems that Baldwin had written a column on naked short-selling a couple of years ago that said the practice had some merit. Someone posted it on the Yahoo board.

Uh oh. You know what that means. Baldwin obviously did not reach an honest conclusion after evaluating all the evidence. He must be corrupt.

"O'Brien" made his point thusly:
Seriously - what did that [the Baldwin article] cost?

$5K? $20K?

The guy at the Cato group was getting $2K per, so Forbes must be way more, wouldn't you think?
I know. It's crazy. It's paranoid. It's also fairly typical of the naked-shorting kooks. Yet people who ought to know better take this person, and his crackpot cause, seriously.

Among them are regulators at the state and federal level, and even some members of the media. "O'Brien" himself claimed, shortly after posting the smear, that he was invited to give a presentation to the Forbes editorial staff last year. In Wall Street Versus America I describe how esteemed members of the press have been gulled by the naked-shorting Baloney Brigade.

Time for the media and regulators to treat these hucksters with the contempt -- and the thorough scrutiny -- that they richly deserve.

UPDATE: This afternoon "O'Brien" made an appearance on the Yahoo board, in reaction to posts citing this item, to say as follows:

"The favor bank is the way a lot of Wall Street works. Either billy boy [Baldwin] is a dolt, or did a favor. Simple. I don't think he is a dolt."


Wall Street Versus America was published by Penguin USA on April 6.
Click here for its listing and here for more information on the book, from my web site.

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