It would seem like if someone suddenly got into massive short selling or put buying on insurance firms, that would be a red flag. It will be interesting to see how this story develops. Perhaps they could have done something if they had caught on to this earlier.
Of course the sad thing is that now that the “cat is outta the bag” he’ll never do it again (assuming he did it to begin with).
I agree, it will be interesting to see how this develops.
I’ve put this forward in a couple of other threads. It would be no problem using some shell companies, cummy corporations and fake bank accounts to make tens of millions by short selling. Without red flags.
If he really put on big positions then it might crop up. But use some Swiss bank accounts, various internet accounts linked to different bank accounts or shell companies, it would be easy to break the $10 million without raising a flag.
I would bet big bucks he has short positions on. He’s knows his way around the world of finance. It was the first damn thing I thought of watching my stock positions plummet is that OBL is probably one of the bastards profiting from the misfortune caused by the attacks.
:eek: 
Just heard it on MSNBC. He apparently has interests in some insurance companies–companies that insure some of the places he has targeted, including the WTC.
I know nothing about how the stock markets work, and the blurb on MSNBC was a real quick one. And the thought that bin Laden may be making a profit on this kind of made my brain freeze over. So I’m going to let some other, more knowledgeable Doper try and explain this one. Please.
As a reinsurance actuary, I spent 3 days last week estimating the cost of this horrible act. I’ve seen estimates of loss to the insurance industry ranging from $30 billion to $75 billion. This is surely the biggest loss of all time.
As a result, insurance company stock prices will plunge. I’m dreading the Monday opening of the NY Stock Exchange, because I will take a huge loss on shares I hold of my own company.
My wife heard a report that some people had been “selling short” stock in some large reinsurers. Short-selling is a way to profit when a stock goes down. If the they get away with this, it’s conceivable that the people who knew that this act was imminent could make enormous sums of money.
Question: (and if this has already been asked and answered, plesae point me to where I could find it)
Could the attack be about money? bin Laden is already wealthy, but now with these statements about how he could possibly make a lot of money on this, I’m wondering if there isn’t a Hans Gruber/Die Hard motive for this.
In that movie, he made his hostage-taking look like an act of terrorism, when in fact, it was a robbery. I just wonder if bin Laden has the same kind of thing going on here.
Feel free to point and laugh at me, too, for bringing this idea up. I don’t mind.
From what I’ve read, he’s been going through his fortune pretty rapidly. Besides, since when has being extremely wealthy stopped someone from wanting more? It’s disgusting.
Human nature, that is-that sometimes we care more about money than about people. This isn’t a political statement, just from my observations.
Well, if Bin Laden is the genius that he appears to be, he is probably finding a way to profit from his goals, that will enable him to accomplish further goals in the future. I really don’t think it is monetary greed that drives him, for if it were that base he could become a billionaire in the secular method of doing so, as Bill Gates, Ted Turner and Donald Trump have all demostrated is possible. I think this is a mastermind that is rarely seen in the world regardless of whether or not he is behind this attack.
Erek
[QUOTE]
*Originally posted by Persephone *
**
I really believe that OBL has making money off of this attack as a secondary objective.
To “sell” or “short” a stock market index or a particular stock is most easily accomplished by buying a put option, which INCREASES in value as the price of the index or stock DECREASES. (Not to confuse anyone, but you could also sell or short a call option, which would be less noticed by regulators). Stock options also provide leverage, or a million dollar put option bought a week ago could easily be worth 10 million dollars on Monday if the Dow crashes.
You could also sell or go short a future contract. Advantage here is that you only put down a deposit and not the entire value. In other words, for a million dollars you could make a 10 million dollar bet.
More complicated and less likely, you could borrow the stock from someone, sell it in the market last Monday, buy it back this Monday, and return the stock you borrowed.
Through various dummy (not cummy, doh!) companies, OBL could have easily bought put options on 20 different global indexes. Depending on how many put options he bought, the past trading history of those accounts, how many dummy companies are used, it could be very difficult to link the trades to him.
I really hope he does get caught. I realize this is pretty mundane compared to many people’s truly horrendous losses, but my Hong Kong stock positions are down another 5% this morning after about a 15% drop last week.
As an investment banker:
- Shorting the market will be very obvious right now; Swiss bank accounts, dummy corporations and the like aren’t the magic solution the crime novels would have one believe. The SEC can look at activity for each stock individually and the market as a whole and they can spot an unusual pattern quickly. Believe you me a Swiss bank account isn’t going to keep those profits safe.
- The equity market has been closed all last week so there hasn’t actually been any movement yet, in order for there to be any profit on a short he would have to buy the stock back, and that can only happen today at the earliest, with the eyes of the SEC watching very closely.
Sorry for the mis-post.
The companies that were alledgedly shorted were Munich Re, Allianz, and Swiss Re. Presumably these trade on one or more European stock exchanges.
Moonshine, do you know how the rules and procedures work in Europe? I don’t know if European exchanges were open last week. Is it possible that the short sellers have already closed out their positions? If so, what can those exchanges do?
fuck bin laden
Equity Derivatives, Institutional Derivative Sales in Tokyo and HK, 8 years.
While it may be more difficult in the US to cover your trades, setting up BVI companies and trading through them is a simple matter, easy to put in cutouts and difficult to trace. Using offshore accounts, trading completely offshore, you could put on all the put positions you want. With all due respect, SEC guys ain’t the sharpest blades in the drawer. If they were, they’d be sitting on a trading desk making 10 times the money. Even if they happen to be switched on, these trades were probably initiated from outside of the US.
december, the European exchanges were open last week. OBL could have closed out all of these positions, transferred the money into clean accounts and be laughing his way to the bank as it were. Ditto for the Asian markets. I don’t have the numbers in front of me, but HK is down something like 15% since last Tuesday.
As I said earlier, if someone put on short index positions in small size, it would be untraceable. One could easily make tens of millions this way.
The current case, it certainly appears that someone had foreknowledge, and went specifically after the insurance companies, airlines and brokers. Put option volume was up something like 20 times over normal in these specific companies. I hope to hell in this case that the trades can be traced back, and there should be a good chance of doing so.
Sorry: Associated Press
I heard a discussion tonight on National Public Radio in the US which mirrors what omni-nots link said.
The insurance companies had just released rather bad earning reports, and the actions on Monday in various market were not that out of line.
I guess only time will tell, but it is looking more and more that there was no “master plot” involved.