New York Magazine posted this on Sept. 27th, the same day I posted on ZeroHedge and the questions being raised about its principal writer. The piece answers a question I had, which was when did Zerohedge begin blogging? Spring, 2008. That’s about two years after my Goldman pieces… and several months after my round up on Goldman’s sins on Lew Rockwell (“Paulson Putsch and The Financial Disappearing Act of 2008 – when I claimed that Goldman was siphoning off profits).
Notice that I have done a few blog posts on Zerohedge and its credibility, asking when it began, shortly before this piece (scroll down and check out the post):
“Last spring, in a far corner of the Internet, an unknown blogger began to piece together a conspiracy theory: The investment bank Goldman Sachs was using sophisticated, high-speed computers to siphon hundreds of millions of dollars in illegitimate trading profits from the New York Stock Exchange, invisibly undercutting the market and sidestepping the regulatory reach of the Securities and Exchange Commission.
Only a few loyal readers paid attention to the blog called Zero Hedge, a no-frills site full of arcane analysis decipherable only by finance professionals. But when a former Goldman Sachs computer programmer was arrested for allegedly stealing software codes used for the firm’s electronic trading arm, and a federal prosecutor was quoted saying the codes could be used to “manipulate markets in unfair ways,” the once-obscure blog ignited a chain reaction. While on a golf outing, an editor at the New York Times learned from a friend who worked on Wall Street that the Zero Hedge allegation was the talk of the industry, and an assignment ensued. On July 24, the Times published a front-page article on so-called high-frequency trading and its potential abuses, which in turn prompted Chuck Schumer, a member of the Senate Finance Committee, to draft a letter to the SEC that same day. Twelve days later, the SEC signaled that it was considering a ban on the very computerized trading that Zero Hedge had attacked….”
And, coincidentally, just after my long post on blogger credibility and naked short-selling, here’s Taibbi, with a HuffPo sneak peak at an upcoming piece on Goldman lobbying for “naked short selling.”
Well, he is on the money on that. It makes sense that GS would want naked short-selling to continue, via favored hedge funds. It’s the way the big boys control the market. Naked short-selling, as Taibbi correctly points out, is NOT short-selling.
We will forgive Taibbi for not attributing Byrne or anyone else, and also for profound ignorance about 9-11. Naked shorts have gotta go.
Meanwhile, Taibbi’s piece uses the term “captured” to describe the regulators being captive to the hedge funds. It’s curiously like Byrne’s blog title, “Deep Capture.”
But with Taibbi, the focus shifts from the media’s subversion by the financial industry and centers more on the regulators’ subversion by the financiers.
How is this important? One possible explanation: because increasing regulation is consonant with the establishment agenda. Exposing the media’s complicity with hedge funds isn’t. (Note: I think regulations are in order, but what kind, at what level, and with what safeguards against further corruption is the issue.. )
Correction (October 26): I’ve since had time to check more of Taibbi’s pieces and Byrne’s writing/interviews. It seems that in fact Byrne is mentioned far down in Taibbi’s piece – but not Bagley or Mitchell (which some might say is fair enough). Also, Byrne comes from a minarchist rather than a purely libertarian position, so that he too is interested in regulatory capture. In which case, Taibbi’s emphasis on the term seems in keeping with his sources and doesn’t constitute a “shift,” as I argued above.