From Bob Wenzel at EconomicPolicyJournal.com:
Explosive new information has broken with regard to destruction of pre-9-11 options trading records.
Just prior to 9-11, someone (or group of people) bought large amounts of put options on various airline stocks. Put options gain in value when a stock goes down. The airline stocks went down after 9-11.
According to CBS (ViaZeroHedge)
At least one Wall Street firm reported their suspicions about this activity to the SEC shortly after the attack.
I have been reporting for sometime (See my July 2006 mention) on the destruction of pre-9-11 options documents by the CBOE. Now, it appears the SEC also destroyed similar documents.
David Callahan – executive editor of SmartCEO – submitted a Freedom of Information Act request to the SEC regarding the pre-9/11 put options.
Here’s how the SEC replied:
This letter is in response to your request seeking access to and copies of the documentary evidence referred to in footnote 130 of Chapter 5 of the September 11 (9/11) Commission Report…We have been advised that the potentially responsive records have been destroyed.
My source is an employee at the CBOE, who told me that, just days after the 9-11 attack , government officials (or at least individuals purporting to be from the government) met with the president of the CBOE and told him to stop the investigation into who purchased the options. The records were destroyed, according to my source.
Now, we have confirming evidence from the SEC, itself, of destruction of these type documents that they may have had in their possession. It is extremely heavy circumstantial evidence that the persons who bought these put options knew in advance of the 9-11 attack.
If ever a Congressional inquiry was required, this certainly appears to be a case.
The then CBOE chairman and CEO William Brodsky, the then Vice-Chairman Mark Duffy and the then President and COO Edward Joyce need to be hauled before Congress and asked if an investigation of the put option trading was conducted. If not, why not? (It would appear to be fairly standard to conduct such an investigation given the unusual trading volume in the options) And, if an investigation was conducted, where are the results?”
My Comment:
Of course, this isn’t “new” news. And (we think) we know who’s behind that. It would be “Buzzy” Krongard, former chairman of A. B, Brown. [added: At least, per this article in the UK Independent].
(My citation of Ruppert doesn’t mean that I endorse all his positions. I just want to point out that those put options have been at the center of the 9-11 alternative explanations since 2001, so this revelation in 2010 is interesting in its own right. Krongard even makes a showing in my first book, “The Language of Empire” (2005), along with Paul Wolfowitz….)
But this recent corroboration of slate-wiping on the part of the CBOE is still interesting.
Lila,
Interested in your take on these:
“Unusual Option Market Activity and the Terrorist Attacks of September 11, 2001” by Allen M. Poteshman, University of Illinois at Urbana-Champaign.
http://www.business.illinois.edu/poteshma/research/poteshman2006.pdf
“Detecting Informed Trading Activities in the Options Markets” by Marc Chesney, Remo Crameri, Loriano Mancini.
http://www.isb.uzh.ch/publikationen/pdf/publ_2098.pdf
“Of course, this isn’t “new” news.”
It’s a fog fact.
“And we know who’s behind that.”
We do, do we?
“It would be “Buzzy” Krongard, former chairman of A. B, Brown.”
Pretty sure this is not the case. But I also trust Ruppert about as far as I can throw him. The guy got his claim to fame by turning Gary Webb’s significant work into a circus.
I don’t mean that Krongard was necessarily placing the puts..I mean he’s connected to it.
If I recall right.
and I did say, I’m not endorsing all ruppert’s opinions
– since I only know some of his articles
I didn’t know that.
I just know Ruppert from his site.
I know he’s at the center of a lot of controversy
More disinfo?
Mystery of terror ‘insider dealers’
By Chris Blackhurst
Sunday, 14 October 2001
* Share
The Independent Close
Share speculators have failed to collect $2.5m (£1.7m) in profits made from the fall in the share price of United Airlines after the 11 September World Trade Centre attacks.
The fact that the money is unclaimed more than a month later has re-awakened investigators’ interest in a story dismissed as coincidence.
It may be that investors who were able to predict the share price crash so skilfully are reluctant to be seen profiting from tragedy. But investigators now wonder whether there is a more sinister explanation.
The authorities are examining the possibility that if they knew what was coming, traders were intent on taking their profits immediately, before regulators had woken up to any possible scam. But investors failed to foresee that the first response of the US stock markets to the disaster was to suspend all trading for four days, thereby denying them the chance of cashing in their profits.
Further details of the futures trades that netted such huge gains in the wake of the hijackings have been disclosed. To the embarrassment of investigators, it has also emerged that the firm used to buy many of the “put” options – where a trader, in effect, bets on a share price fall – on United Airlines stock was headed until 1998 by “Buzzy” Krongard, now executive director of the CIA.
Until 1997, Mr Krongard was chairman of Alex Brown Inc, America’s oldest investment banking firm. Alex Brown was acquired by Bankers Trust, which in turn was bought by Deutsche Bank. His last post before resigning to take his senior role in the CIA was to head Bankers Trust – Alex Brown’s private client business, dealing with the accounts and investments of wealthy customers around the world.
There is no suggestion that Mr Krongard had advance knowledge of the attacks.
Between 6 and 7 September, the Chicago Board Options Exchange saw purchases of 4,744 “put” option contracts in UAL versus 396 call options – where a speculator bets on a price rising. Holders of the put options would have netted a profit of $5m (£3.3m) once the carrier’s share price dived after 11 September. On 10 September, more trading in Chicago saw the purchase of 4,516 put options in American Airlines, the other airline involved in the hijackings. This compares with a mere 748 call options in American purchased that day. Investigators cannot help but notice that no other airlines saw such trading in their put options.
It was not just airlines that were targeted by remarkably canny investors. One of the biggest occupants of the World Trade Centre was Morgan Stanley, the investment bank. In the first week of September, an average of 27 put option contracts was bought each day in its shares. The total for the three days before the attacks was 2,157. Merrill Lynch, anotherWTC tenant, saw 12,215 put options bought in the four days before the attacks, when the previous days had seen averages of 252 contracts a day.
“I didn’t know that.”
Depends on how you see things, but his public star came from his performance during John Deutch visit to South Central LA in 1996 in the Crack-CIA hoopla following Webb’s series.
“I know he’s at the center of a lot of controversy”
Which means he is at the center of a lot of attention.
Cant hide much these days, you can kick up a lot of crap and hide in plain sight, though.
“More disinfo?”
Always possible.
Ruppert was certainly a pied piper of Peak Oil theory. I thought he was right-on when oil was $150/barrel, still could be in the long-term too. Still, that price was manipulation. Makes me think.
Well – I’ve always been a bit skeptical of peak oil – except in the sense that companies have to try harder. I mean, you never hear the Pentagon running out of the stuff, right?
I don’t know enough to say anything about abiotic oil, but it seems pretty compelling and if the story I’m hearing about a deep vein being stuck in the bp oil spill is true, then that’s more evidence.
I haven’t read Ruppert beyond a few articles.
“I mean, you never hear the Pentagon running out of the stuff, right?”
Sort of. The military has definitely woken up to the fact they are vulnerable to global energy supply shocks. This stuck them in the eye when they realized how limited their potential response options were when Russia invaded Georgia and oil was at $150/barrel (btw, coincidence?).
Energy and environmental issues have crept into the security studies field in the past 15 years; some in the military have latched onto the peak oil theory.
There is some evidence I personally witnessed, that New York State employees may have profited financially from the 9-11 attacks. Read my full testimony:
http://www.piratemyfilm.com/blogs/11422
, the VIX futures aren’t, and that’s what mttaers.That said, keep in mind that it’s not the time to increase your shorts if you are already short. But if I not already had a small position I would certainly short. And I would keep adding on every volatility spike in the future. That’s basically my strategy. I started shorting last year in August. And if I see a volatility spike and the weighed average VIX futures reaches over 30 I will add more shorts.I actually made the pricing model because I could not find it and I needed to understand how the VXX was priced. When I shorted the first time I didn’t fully understand it and got so nervous that I developed it in order to increase my knowledge. It helped me a lot to convince myself that shorting was the way to go. It helped me stay put when times were bad. And thanks to not covering my shorts I did quite OK.Regarding the payment the easiest is via Paypal via my email. You just deposit 35 USD, I will then get a notification and I send the spreadsheet to your mail.PD1: For the payment if you are in the European union I would prefer a bank transfer (which has no cost between European countries). But if I remember well you are from Rio and live in the USA?PD2: Just in case you are interested and did not know I also sell a . Specially for traders that prefer using the XIV. Some people use both the VXX and the XIV. So if you buy both its 50 USD. Better than buying both per separate.But don’t feel pressured, I personally prefer just shorting the VXX so if that’s your case with the VXX model alone you’re more than OK.Cheers !JRV