Ask him no questions and he'll tell you no lies
I stumbled on this post in a stock message board today, analyzing the recent Wall Street Journal video interview of my Marley, Overstock.com's ever-slippery CEO Patrick Byrne.
The interview is available here. I assume the interviewer picked Byrne because he is "controversial," sort of the way the H1N1 virus is "controversial."
According to the transcript, Byrne is hanging tough on the company's accounting, calling his fourth quarter earnings numbers GAAP-compliant when they clearly are not.
But the real thing to treasure about this interview is its Nixonian quality. I'm taking the liberty of reprinting the message board post in its entirety below:
An amusing portion of a transcript on the Wall Street Journal website in which Julia Angwin interviews Patrick Byrne. (The transcript is shot through with typos and anomalies, which I will not bother to correct or cite within the quotation, which has been pasted here.) Her question: "Angwin: Jeff Matthews says, 'Patrick Byrne has said thousands of companies have been destroyed by naked short-selling. Ask him to name 100, or just 10.'”UPDATE: Apparently the "Sith Lord" is a sensitive point for my Marley, sufficient to send him growling into his computer, rewriting history in this rubbish.
Answer in Byrnespeak:First of all, I quote Robert Shapiro on that. Shapiro was, is a Harvard PhD, former undersecretary of commerce for economics. He wrote a paper in ‘04 that said at least 200 had been damaged. He later upped his estimate to a thousand. You basically look at any company that’s been on the RegSHO list, which is this of companies, publicly traded companies that are seeing a certain technical defect in their stock settlement. And that’s a pretty good sign –it’s possible to appear on that list without anybody have [sic] been purposely doing anything wrong, but it’s overwhelmingly likely that if you’re on that list, it’s because somebody at some point has been manipulating your stock. In fact, to me, then, the naked short-selling issue is just one problem of the whole bear raid issue, which is a question of stock manipulation. The SEC has clearly been in the pocket of hedge funds, and inappropriately close to hedge funds, which is why Bernie Madoff was able to get away with it for so long. And, I think, there’s some unseemly relationships developed on Wall Street–I won’t go into any more detail–that let companies, that let hedge funds basically take out fire insurance on a company and then set a match to it.Number of words: 216. Responsiveness: none. Twisting of facts: equating "damage" with "destruction", and "thousands" with "a thousand", within the context of the question and answer. Irrelevant distracting arguments and attacks: 4, at a minimum, depending on how you count them: Equating the SHO list with destruction; citing authority for a basic underlying opinion without answer the question, which was as to specifics; subsuming the question, without answering it, into a larger category, thus trying to make the answer look irrelevant; and attacking the SEC and other unspecified Wall Street figures rather than answering the question.
Appropriate answer in English, fleshed out with proper politeness:
I'm sorry. I can't name any.
Number of necessary words: 6. Responsiveness: perfect. No irrelevancies or distractions.
What a boob. It's a pity Angwin isn't more adept at follow-ups.
Another typical Brynesian example: "Angwin: There’s all this talk about Lord Sith, or Sith Lord. So, for people who don’t know, I guess you, in August of 2005, said that there were people who were trying to drive your stock down and you believe that there was somebody named a Sith Lord who was orchestrating this. And so Phil Painter, our reader, wants to know, 'Who is the Sith Lord?' And he wants you to say it’s a real, identifiable person."
The answer in Byrnespeak:Well, first of all, the call I gave was about much more than my own company. And, in fact, it seems to be one of the elements of the cover-up not to talk about what I disclosed on that call. Which was basically that there were a set of hedge funds, who were playing these games. They had an inappropriate–I think the intersection, as long as we’re asking–the intersection of these hedge funds and the journalists, this guy named Jim Cramer, I supplied a certain video of Jim Cramer to a certain comedy show, that was used in revealing and exposing Jim Cramer. I also went after the SEC for being captured; I went after Kroll, which is sort of the Blackwater of corporate intelligence, who I said builds networks of corporate insiders for hedge funds. Well, if you look in the indictment of Raj Rajaratnam, you’ll see a lot of these things I was talking about in ‘04 and ‘05 seem to be bubbling to the surface. The sith–when the public is ready to acknowledge that there is a sith, that there is a sith among us, we’ll get to the Sith Lord.An even more evasive answer than the previous example. I won't even bother to translate it into English, since it's just 198 words, all of them meaningless and irrelevant to the question until we get to the part where the public is to blame for his inability to answer. Yes, sir. When the public is ready, Byrne will speak out with a clarion voice. Don't hold your breath, though. I have an idea that Byrne won't ever find that the body politic has a sufficient appreciation of his fantasy world to warrant his condescending to provide the information requested.
Yes, what a boob: a boob for the ages.
To recapitulate: Byrne used "Sith Lord" to describe a specific person who was manipulating Overstock shares. There's no doubt about it at all, and the problem is not "choagies" but Byrne's deceit. See Bethany McLean's Fortune article.
He lied in a conference call, and now he's lying about his lie. This guy is really a phenom.
© 2009 Gary Weiss. All rights reserved.