Typically, the only mob contact small investors have is with their local Wall Street Crime Family storefront. The grifters there will be really likeable guys, or maybe nowadays, guys and gals, with these great telephone voices. According to a gangland source with close matrimonial ties to my mother, who was a Saint, The Street hires these con artists specifically for that skill, sounding like one of the Founding Fathers on the horn, (so what readers of this blog need to do is stop answering the insidious telephone when yours calls up. Drive out to the storefront for a face-to-face, and let the lowlife swindling gangster try giving you the finger while he’s scamming you then).
Wise guys from Crime Family bookmaking operations talk to their storefront con artists all the time, explaining what racket the Dons are running now, psyching everybody up for the sting and like that, so when your grifter pulls out the old sucker list, hits speed dial, and starts in resonating those million dollar bel canto tones against your tympanic membrane, he knows his aria as well as Placido Domingo ever did, is probably emoting like Jose Carreras at a bravissimo performance, and already has his Luciano Pavarotti digging into your money market account for breakfast.
Among my personal favorites here are the protection shakedowns, run pretty much non-stop during earnings season by our Crime Family back in the day.
Now the term, earnings season, is a misnomer. It’s really open season, and it’s open season on you. As these blogs will point out endlessly, there are only two sources of money on Wall Street, yours and theirs, and any time new numbers come out, gangland bookies climb all over what that doesn’t mean to stock values, figuring out how to use every irrelevant digit to transfer money out of your hands into what is, by our aforementioned metric, the only other place it can go.
And so, four times a year mobsters ratchet up the shakedowns, widely used in Street protection rackets, scams that are so nuts the consigliore, himself, takes a personal interest. Grifters paying close attention can always hear him cackling whenever the matter comes up during Family strong-arming conference calls.
"Put the stop loss in at 25". Cackle, cackle. With the market at 30 right now, this means anyone owning the stock will be sold out when it drops to 25, reason being that the bloodletting ends there should prices keep plummeting all the way down to, say, 24. Or whatever. Cackle, cackle, cackle. (If you don’t understand what kind of protection this is, don’t worry. After 55 years in the stock market, neither do I. But that’s what the mob says it is. I kid you not. And they bribe Congress to go along, and titillate SEC bureaucrats with prospects of kingly future employment to agree with anything they say as well, so all Washington proclaims it’s protection in the clueless financial media, and you can hear it on GE TV 24/7 too.)
Anyway, what’s really going on here is something like this. A while back, the Godfather set the son-in-law up with some organic material disposal business losing $45 million a quarter. One of those "we’ll never earn a dime but you gotta love our future", high-tech outfits that’s never going to earn a dime but you‘ve gotta love its future. Godfather doesn’t care about the 45 big. Family’s skimming $1.7 billion from investor accounts every 13 weeks shaking customers down over the stock price.
Losses pound OrgMatDip stock south. Future gooses the quote north. For a Wall Street Crime Family, it doesn’t get any better than this.
And now, with Organic Material Disposal at 30 and six weeks to go before the next earnings announcement, your grifter’s in your ear about OrgMatDip’s future, so you buy a hundred shares.
"A thousand, O, sole mio."
All right, you buy a thousand shares.
"Put a stop loss in at 25, Tu cha nun ciagne ."
Okay, you put a stop loss in at 25.
“O, MAMMA MIA”
Few weeks later, grifter is on the phone again - but starts off with OrgMatDip’s losses this time. Some rumor in the financial media. These days everything in the financial media is rumor. There are no facts anymore. We ran out or something. “Future be damned,” the con artist tells you, “OrgMatDip’s going broke. You got stopped out.”
Well, kind of. See, this is where the consigliore brought the muscle in. Shakedown muscle.
Family short-sellers mugged Organic Material Disposal south to 25, so the mob computer sold your 1,000 shares while Family goons covered their shorts and bought up all the stock on that sucker list, including yours, whereupon the consigliore and them could drive OrgMatDip back north to 30 and dump a large block on some union pension fund at 5 points above market because that’s the kind of price institutional investors have to pay Wall Street Gang Lords to cover the risk the mob’s not taking in accumulating blocks for large investors by shaking down the small ones this way in their protection rackets.
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“OrgMatDip.” It’s a month after the earnings announcement now, and the grifter‘s back on the line. You haven’t heard from him for awhile. “Losses be damned,” he intones. “You gotta love its future.” You knew this was coming, O, sole mio.
That other quarter’s over, the one where they muscled you out of 5 little on this piece of garbage, but guess what? It’s open season again. 1.7 large every 13 weeks.
“1.7 large from the “you” in all of you. There are only two sources of money on Wall Street, yours and theirs, and sometimes that’s what becomes of yours.
Wise guys pinch it from you in a shakedown.
