Who shorted British pound? (Currency fell 6% in 10 days before London terror attacks)

WorldNetDaily ^ | 7/16/05 | WorldNetDaily

[wagglebee]

WASHINGTON -- In the 1988 Hollywood hit "Die Hard," starring Bruce Willis, a group of "terrorists" take over a Japanese banking institution in Los Angeles, hold hostages and make demands for release of "political prisoners."

But it turns out the terrorists aren't really terrorists. They are bank robbers trying to make off with the fortune in the bank's vaults.

Could it be Osama bin Laden has seen "Die Hard"?

That is a question Scotland Yard and other law enforcement agencies are actually asking themselves following the July 7 London transit system attacks that killed 54 and injured scores more as they continue to scour the planet for evidence and additional conspirators.

Why? Because it appears some profited by short selling the British pound in the 10 days leading up to the attacks.

The pound fell about 6 percent (approximately 1.82 to 1.72) against the dollar for no apparent reason – until, of course, the terror attacks sent the British markets reeling still further.

"This was an almost unprecedented weakness and far too sharp to be a coincidence," one economist with more than 35 years of experience in the investment industry, told Joseph Farah's G2 Bulletin, the premium, online intelligence newsletter published by the founder of WND. "That is, after all, an annualized rate of loss of well over 100 percent."

The fall did not go unnoticed by investigators, who are wondering whether the terrorist masterminds behind the attacks decided to make some money on their action or whether other investors with inside information about possible attacks took advantage of that knowledge.

"Currencies of establish countries simply do not fall that fast based upon any kind of economic or financial analysis," said the economist. "Somebody – somewhere – knew something. Or maybe I should say 'somebodies.'"

Could it be the terrorists have learned to make their attacks self-funding operations?

Could it be the terrorists are actually motivated by factors other than Islamic fanaticism?

These are some of the questions law enforcement agencies are asking – but they're not really expecting to get answers.

The problem is that short selling of this kind can be done with near total anonymity.

"Trade currency futures through a Swiss or Austrian bank via an offshore company incorporated in Crete and you have a totally untraceable transaction," the economist noted. "No one will ever know who made the really big money off this situation, but I guarantee you this – someone did."

It's not the first time suspicion about terrorists – or someone – profiting from short-selling prior to an attack.

Following the Sept. 11, 2001, attacks in the U.S., David Ruder, chairman of the Securities and Exchange Commission from 1987 to 1989, raised the question of whether terrorists may have gotten away with profiting from their attacks by short-selling shares in the U.S. markets.

Then U.S. Treasury Secretary Paul O'Neill confirmed the government was investigating possible short selling, but was not optimistic those responsible would ever be found.

Short selling allows investors to bet that stocks will fall by borrowing and selling shares in the hope of buying back at a lower price.

After Sept. 11, Chicago Board Options Exchange data showed 1,575 put options purchased in United Airlines' parent company five days before the attacks. On an average day, only 390 such put options are purchased. Investors bought 2,258 put options in American Airlines parent company, compared with 220 on a typical day. Insurance and other stocks also experienced and upswing in short sales.

Investigators never revealed how much money was bet, but short sellers could have made 30 times what they invested, given the huge plunge in the stock prices of those companies.

Government investigators from around the world never learned the identity of the short sellers in 2001. And, despite vigorous efforts being made to find out who was behind the short selling of the British pound in early July, hopes are slim the culprits will be found.

[lilylangtree]

I can see the headlines coming from the likes of George Galloway: "Bush Did It"

[Churchillspirit]

As an importer I deal in both currencies - British pounds and US dollars.

The dollar has been strengthening for a few weeks now.

Nothing to see here folks, lets move along.

[montag813]

As someone who trades currency futures for a living and shorted both the Pound, Euro and Aussie in the day before 7/7 (when they were ALL falling sharply), I can tell you that the Pound's fall was not unprecedented.

[montag813]

You have to remember too, that when the fed raised interest rate three weeks ago the dollar v. foreign currency went up in general.

TWO factors jacked up the Dollar vs the Euro and Pound: the Fed and the large and unexpected drop in our trade deficit.

[SAJ]

Barring his 2003-2004 short of USD and his huge spec against EMR in 1991-1992, EFB Soros has been mainly concerned with 2nd- and 3rd-tier currencies. The reason for this is obvious to any objective observer: X amount of instability in currencies like THB and IDR goes a lot further toward creating a huge move in the ccy pairs than the same amount of instability would in USD, EUR, CHF, AUD and so forth. Wait until ZAR starts to weaken, presumably on bad political news, then jump on heavy short. That's been Soros' game for years and years, and he's not at all averse to gearing his position by shorting the affected currency's (or currencies' !) bonds to boot.

Your view that forex traders are entirely aware of the trend is spot on. I just got off the phone w/Barbara Rockefeller (Rockefeller Treasury Services, also author of The Global Trader and Technical Analysis for Dummies), whose Friday newsletter had her short ALL of GBP, EUR, CHF, and JPY. She did mention to me that a long spec in EUR-USD late Sunday or very early Monday might be a very handsome little trade if the capital flow figures (due Monday a.m.) come in at under $50 bio. If so, this would represent the third consecutive month that inward cap flow to the US has been inadequate to cover the current account deficit.

No disrespect to her, but I'll not be taking this trade. Not my style to begin with, and secondly I dislike very much the notion of ''trading the number''. It's too easy to be right on the one hand about where the number comes in, yet entirely wrong about the expectations for the number that the other mkt participants have.

I'll just have to stick w/writing OOM EUR calls on 200-300 pip rallies, which strategy has worked very consistently since 9 March (the first day LeMonde reported that polls indicated that the froggies were going to vote against the EU 'constitution).

If the hurricane season will call ''time-out'' for 3-4 weeks, I do believe we'll see considerable calming in the energy mkts, which is of course all to the good as far as USD goes. Hey, we've had 5 named storms so far (earliest in history, btw), let's just take a break here, shall we(g!).

Good trading to you!

[wagglebee]

I understand that the Pound and other currencies were already dropping against the USD; however, is it possible that currency manipulation was already accelerating the process?

[editor-surveyor]

"All I can think of is that George Soros has a history of manipulating currency."

Exactly what ran through my mind as I read the title of the article. Soros is also known for working with BinLaden, as he did when they attacked Indonesia's currency.

[Renfield]

Likely candidates include: Russian Mafia, Russian FSB, rich Saudis, Iranian gov't, Chinese Gov't.

If I had to bet, I'd put my money on the FSB. They and their predecessor (the KGB) have been supporting Islamic terrorists since at least the mid 60's.

Let us not forget, however, that Al Qaeda is the armed wing of Wahabbism, and the Saudis are Wahabbists.

[editor-surveyor]

"Eventually we'll find a way to access those documents, maybe not "legally", but we'll find a way"

Ever hear of "Promise?"

[investigateworld]

later read

[jec41]

All I can think of is that George Soros has a history of manipulating currency.


Nothing to do with it. The main thing affecting the Euro and pound is that the EU constitution was voted down and both currencies was shorted. Some countries were even threaten to abandon the Euro and go back to their old currency. Without a EU union the pound and euro were seeking theirs old value which were driven up with the promise of a unified EU.

[freeangel]

George soros was the only name on my "short list" also.

[FormerACLUmember]

Three obvious candidates, all with a history of this kind of inside information "speculating," the first two intimately linked to the US corrupt democrat party:

George Soros

Marc Rich

Any one of the billionaire Saudi Ruling Class, the same Wahabi IslamoFascist vermin that now fund most of the world's terrorism.

[Stonewall Jackson]

It was the little green men who control the world's governments.

I know it is!

I know it is!

Oh, excuse me, my doctor tells me it is time to go take my meds.

[SAJ]

Drat!

And here all this time I had thought those little goomers were gray. (mutter, grumble)

Another trip to the eye doc, sigh...

/adjusttinfoil

[Stonewall Jackson]

No, the gray guys are just the workers. The green ones are the brains behind the group. (I think I've been watching the SciFi channel a little too much, don't you think?)

[null and void]

Ever hear of "Promise?"

No. 'splain please?

[keithtoo]

The Joos?

[SAJ]

Aha, is THAT the difference?

A load off my mind, I can tell you!

;^)

[wagglebee]

In a few days we'll be hearing that they were all warned not to use public transportation on July 7th, they won't have any proof, but the story will be repeated enough that it becomes a fact.