smCOLUMN 109, SEPTEMBER 1, 2004
(Copyright © 2004 The Blacklisted Journalist)
SECTION FOUR
sm
COLUMN
109,
SEPTEMBER 1, 2004
(Copyright © 2004 The Blacklisted Journalist)
WHO BET THE 9/11
MARKETS?
SOMETHING THE 9/11
COMMISSION FORGOT TO
THOROUGHLY PROBE?
[The following first appeared in Unity & Struggle.]
WHAT IS A "PUT" OPTION?
A
"put option is a contract tat gives the holder the right to sell a
specified number of shares of a particular stock, stock index or dollar face
value of bonds at a predetermined price---called the "strike
price"---on or before the option's expiration date. For this right, the
holder (buyer) pays the writer (seller) a premium. The holder profits from the
contract if the stock's price drops. If the holder decides to exercise the
option (as opposed to selling it), the writer must buy the security. The writer
profits when the underlying security's price remains the same, rises or drops by
less than the premium received.
*
* *
"I saw put-call
numbers higher than I've ever seen in 10 years of following the markets,
particularly the options markets. When
one sees this type of activity, the first thing one does is ask oneself, 'What
is the explanation? What are people
worried about?"
- "John Kinnucan, a principal of Broadband Research.
*
* *
Prior to the terrorist
attacks, an unusually large amount of put options were placed on the stocks of
companies whose business would be severely upset by the attacks, including the
parent companies of United and American airlines; Morgan and Stanley; Merrill
Lynch; Germany's Munich Re; Switzerland's Swiss Re; AXA of France.
All of these stocks suffered dramatic losses when the markets reopened.
Estimates of the profits made from these trades range to as much as $15
---The
International Policy Institute for Counter-Terrorism,
9/21/01
http://www.ict.org.il/articies/articledet.cfm?articleid=38>;Centre
for Research on Globalisation4/21/02http://glob?alresearch,ca/articles/HEN204B.html
;
From
the Wilderness 4/22/02
*
* *
Reports note the unusual surge in put options and
short-selling against airline companies whose planes were used in the 9/11
attacks:
CBS News reported on
September 16, 2001: "Sources tell CBS News that the afternoon before the
attack, alarm bells were sounding over unusual trading in the US stock options
market, an extraordinary number of trades betting that American Airlines' stock
price would fall.. ... Sources say they've never seen that kind of imbalance
before. Normally, the numbers are
fairly even."
---CBS News, 9/19/03
http://www.cbsnews.com/stories/2001/09/19/eveningnews/main3ll834.shtml
* * *
The Associated Press reported: "On Sept. 6-7, when there was no
significant news or stock price movement involving United, the Chicago exchange
handled 4,744 put options for UAL stock, compared with just 396 call options --?(which
are) essentially bets that the price will rise."
http://cjonline.com/stories/091901/ter-tradingacts.shtml
* * *
According to the San Francisco Chronicle,
data released on September 21 revealed that short trading in shares of the
parent company of United Airlines during the month of September had risen 40
percent over its previous month's levels, while that of its competitors,
excluding American Airlines, only rose 11 percent. During the same time period, shorting among all other stocks
traded on the exchange increased by only one percent.
---San Francisco
Chronicle, 9/29/01 http://www.sfgate.com/cgi-bin/article.ogi?file=lchronicle/archive/2001/09/29/MN186128.DTL
* * *
The Associated Press
reported: "On Sept. 10, an uneventful day for American, the volume was 748
calls and 4,516 puts, based on a check of option trading records."
---Associated
Press, 9/18/01
http://cjonline.com/stories/091901/ter-tradingacts.shtml
* * *
According
to the San Francisco Chronicle, data released on September 21 revealed
that short trading in shares of the parent company of American Airlines during
the month of September had risen 20 percent over its previous month's levels,
while that of its competitors, excluding United Airlines, only rose 11 percent.
During the same time period, shorting among all other stocks traded on
the exchange increased by only one percent.
---San Francisco Chronicle, 9/29/01 http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/09/29/MN186128.DTL
* * *
On September 10, the volume
of trading in AMR put option contracts increased to 60 times the daily average
and almost five times the total of all $30 put options traded before September 10.
---The Age 9/24/01
http://www.theage.com.au/news/world/2001/09/24/FFX3
Bloomberg 9/18/02
http://www.theniodernreligion.com/terror/wtc-unusualtrading.html
* * *
Bloomberg News
reported, "Trading in so-called put options, which rise in value when stock
prices fall, surged as much as 285 times the previous average volume in AMR
[parent company for American Airlines] and UAL during the days before Sept. 11."
---Newsday
9/23/01
http://www.newsday.com/nybzbund232380730sep23,0,2864727.story
Bloomberg
9/19/02
http://www.suntimes.com/terror/stories/cst-fin-optl9.html
* * *
Brokerage
firms through which the trades were conducted:
The Independent of
London reported that to "the embarrassment of investigators, it has also
emerged that the firm used to buy many of the 'put' options ...on United
Airlines stock was headed until 1998
by 'Buzzy' Krongard, now executive director of the CIA." The paper
explained, "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."
---Independent, 10/14/01
http://news.independent.co.uk/business/news/story.jsp'story=99402
* * *
On
September 29, the San Francisco Chronicle reported that a "source
familiar with the [United] trades and market data" identified
"Deutsche Banc Alex Brown, the American investment banking arm of German
giant Deutsche Bank, as the investment bank used to purchase at least some of
the options." The same source told the newspaper, "Investors have yet
to collect more than $2.5 million in profits they made trading options in the
stock of United Airlines before the Sept. 11 terrorist attacks."
---San Francisco Chronicle, 9/29/01
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/
archive/2001/09/29/MN186128.DTLhttp://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/
archive/2001/09/29/MN186128.DTL
*
* *
Tom
Flocco, an independent investigative journalist, reported on July 16, 2002,
"European reporters found that most of the suspicious pre-attack trades passed through
Deutschebank and especially via CIA Executive Director A.B. Krongard's former
Alex Brown investment division by means of a procedure called portage, which
assures the anonymity of individuals making the transactions.
But Congress has not publicly revealed whether they will call Krongard
and other Alex Brown traders to testify in open hearings, or whether they will
subpoena the pre-attack documents in question."
---Flocco 7/16/02
http://www.scoop.co.nz/mason/stories/HL0207/S00l19.htm
* * *
Unusual trading in the stocks of
companies that were tenants in the World Trade Center:
Morgan
Stanley; Dean Witter & Co. (An investment bank that had occupied 22 floors
in the World Trade Center)
The Independent of London reported that "In the first week of
September, an average of 27 put option contracts was bought each day" for
shares of Morgan Stanley. "The total for the three days before the attacks
was 2,157."
---Independent, 10/14/01
http://news.independent.co.uk/business/news/story.jsp'story=99402
*
* *
Merrill Lynch & Co. (A major bank whose headquarters
were in the World Trade Center)
The
Independent of London reported that Merrill Lynch, reportedly "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."
---Independent,
10/14/01
http://riews.independent.co.uk/business/news/story.jsp'story=99402
* * *
Statistics
for both Morgan Stanley and Merrill Lynch
Trading
volume in Morgan Stanley and Merrill Lynch put options surged "12 times to
more than 25 times" in the days preceding the Sept. 11 attacks.
---Bloomberg
9/18/02
http://www.themodernreligion.com/terror/wtc-unusualtrading.html
9/19/02
http://www.suntimes.com/terror/stories/cst-fin-optlg.html
*
* *
Unusual
trading 'in the stocks of a reinsurance company which lost billions as a result
of the 9/11 attacks:
Reuters,
9/20/01 http://www.completetime?line/2001/reutersO92001.html
reported that
according to German bankers, there had been "brisk activity" in the
trading of shares of Munich Re during the weeks leading up to the attacks.
The company announced in late September that is stood to lose about $1.95
billion as a result of 9/11. Its
shares also fell significantly lower after the
---Dow Jones
Business News, 9/20/01
http://www.completetimeline/2001/dowjonesO92001.html
* * *
The
stocks of numerous other companies may also have been traded by people
possessing advanced knowledge of the attacks:
The
Securities and Exchange Commission published a list that included
the names of some 38 companies whose stocks may have been traded by people with
advance knowledge of the Sept. 11 attacks.
In addition to the companies already mentioned above, the list included
General Motors Corp., Raytheon Co, Boeing, Lockheed Martin, Lehman Brothers;
Bank of America, Marsh & McLennan, Continental, Delta, Northwest, Southwest,
US Airways, Carnival Cruise Lines, Royal Caribbean Cruise Lines, American
International Group, AXA, Chubb, Cigna, CNA Financial, John Hancock and MetLife,
American Express, Bank of New York, Bank One, Bear Stearns, Citigroup, Hercules,
L-3 Communications Holdings, LTV Corp., Lone Star Technologies, Progressive
Corp., Royal & Sun Alliance, XL Capital and W.R.Grace.
---San Francisco
Chronicle 10/3/01
AP
10/3/01
http://www.detnews.com/2001/business/0110/03/bO3308879.htm
AP 10/4/01
http://serendipity.magnet.ch/wot/sec.htm
* * *
Suspicious
trading also occurred in the bond market:
The Wall Street Journal
[Wall Street
Journal, 10/2/01. [http://www.completetimeline/2001/wallstreetjournallOO20l.html
] reported, "Investigators from the
U.S. Secret Service contacted a number of bond traders regarding large purchases
of five-year Treasury notes before the attacks, according to people familiar
with the probe. The investigators, acting on a tip from traders, are examining
whether terrorists, or people affiliated with terrorist organizations, bought
five-year notes, including a single $5 billion trade, the people say." The
Journal added, "Five-year
Treasury notes are among the best investments in the event of a world
crisis."
* * *
Countries
where these trades were executed.
Singapore, Hong Kong,
Italy, France, Switzerland, the
---Centre for
Research on Globalisation 4/21/02
http://globalresearch.ca/arficles/HEN204B.html
*
* *
Brokerages
used.
TD Waterhouse, NFS, Alex
Brown/Deutsche Bank, Goldman
---Centre for
Research on Globalisation 4/21/02 http://globalresearch.ca/articles/HEN204B.html
CBS
News, 9/19/03
* * *
Were
the unusual trades being monitored by the CIA?
From the Wildeness magazine
noted, "It has been documented that the CIA, the Israeli Mossad and many
other intelligence agencies monitor stock trading in real time using highly
advanced programs reported to be descended from Prosecutor's Management
Informational System (PROMIS) Software. This
software can be used to alert national intelligence services of irregularities
in the markets that might predict attacks such as the ones that happened on
9-11. PROMIS was reported as recently as June 2001 to be in Osama
bin Laden's possession, and as a result of recent stories by FOX, both the FBI
and the Justice Department have confirmed its use for the U.S. intelligence
gathering through at least this summer. This
would confirm that the CIA had additional advance warning of imminent
attacks."
---Quoted from the Wilderness Timeline. http://www.fromthewilderness.com/free/ww3/02-11_02_lucy.html
.
Detailed
info on Promis Software available at From the Wilderness 5/24/01
From
the Wilderness 12/06/01 http://www.fromthewilderness.com/free/ww3
/12 06 01death_proffts_ptl.html
The Canadian daily reported
that U.S. authorities apprehended many of the suspected terrorists "through
use of the state-of-the?art computer software program PROMIS."
---From the
Wilderness 12/06/01
http://www.fromthewilderness.com/free/ww3/12_06_01_
* * *
Ernst Welteke, president of
the Bundesbank, was quoted by the London Telegraph [Telegraph,
9/23/01 http://www.portal.telegraph.co.uk/news/main.jhtml?xml=/news/2001/09/23/widen23.xml
] as saying, "There are ever clearer signs that there were activities on
international financial markets that must have been carried out with the
necessary expert knowledge." And the Miami Herald reported that
according to Mr. Welteke, "his researchers came across what he considers
aimost irrefutable proof of insider trading." 9/24/01
http://web.archive.org/web/20011109160700/www.miami.
---New York Times
9/29/01
* * *
John Kinnucan, a principal
of Broadband Research, an independent telecommunications research firm, told the
San Francisco Chronicle. "I
saw put "call numbers higher than I've ever seen in 10 years of following the
markets, particularly the options markets. When one sees this type of activity,
the first thing one does is ask oneself, "What is the explanation?
What are people worried about??"
---San Francisco Chronicle, 9/19/01
http://www.sfgate.com/cgibin/article.egi?file=/chronicle/archive/2OGi/09/19/BU184559.DTL
* * *
Jonathan Winer, an ABC News
consultant stated, "It's absolutely unprecedented to see cases of insider
trading covering the entire world from Japan, to the U.S., to North America, to
Europe."
---cited in From
the Wilderness 4/22/02 http://www.fromthewilderness.com/free/ww3/042202-bushknows.html
*
* *
Don Radlauer, an expert in
electronic banking and cash management, pointed out, "No similar trading in
other airlines occurred on the Chicago exchange in the days immediately
preceding Black Tuesday."
---The
International Policy Institute for Counter-Terrorism 9/21/01
http://www.ict.org.il/articlesiarticledet.cfm?articleid=386
*
* *
Dylan Ratigan of Bloomberg
Business News, in a Sept. 20 interview on Good Morning Texas, said,
"This could very well be insider trading at the worst, most horrific, most
evil use you've ever seen in your entire life.
This would be one of the most extraordinary coincidences in the history
of mankind if it was a coincidence."
---From the
Wilderness 5/16/02
http://fromthewilderness.com/free/ww3/051602?_liewontstand.html
##
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