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So much for that new “proudest moment”.  Easy come, easy go.  Ironically, Jim Cramer is bemoaning this reversal, having bought into the notion that the financials in question are helpless in the face of shorting.  Did he not get a memo or something?


I did promise last week to get to what the whole hubbub involving Jim Cramer and Herb Greenberg was all about, but as this section decides rather capriciously to wander into a side issue let’s start there.  Once Mitchell gets through reiterating his embellished descriptions of Cramer and Greenberg that fateful day, he moves on to the story of a high-level Overstock executive (to this day) named Stormy Simon, who despite her name is not and never was in the adult entertainment industry and shame on you for even thinking it.  Or so Mitchell effectively says anyway.

Mitchell attributes the story behind Simon to Jeff Matthews, another blogger who has done a lot of dissecting of Overstock’s performance as a company, particularly in 2005 and 2006 (even as his interest in that story has appeared to wane in more recent months), but strangely, no entry related to Overstock appears in his blog for the specified month, November 2005.  It’s possible the entry may have been deleted, or perhaps the discussion was restricted to the comments page (Simon is mentioned in the comments to a December entry that was Overstock-related, but I’ve neither the time nor the inclination to scan every comment section on that blog.)

Then again, it’s not as if Patrick Byrne himself hasn’t encouraged such a suggestion himself.  According to a story in Forbes from that month, Byrne claimed to have sent Simon to Rocker Partners, under the pretense of having damaging information about Overstock, a practice which Byrne described by saying, “she showed them some thigh”.  No, really.  Mitchell claims that Byrne has thoroughly debunked the notion of any lascivious past on Simon’s part, but once again, a source might have been nice.

There’s a lot more to the story (such as the panned Super Bowl ad referred to in one of the links above, which was put together by Simon herself), but by now Mitchell has moved on so I guess I need to do so as well and get back to what was eating Herb.

That, specifically, was a subpoena.  The SEC, in a rather unprecedented move, issued subpoenas to numerous journalists that wrote critically about Overstock.com, including Greenberg, and Cramer as well, it turns out.  Mitchell acts as if the whole thing is routine from the SEC’s perspective but it is far from that.  The subpoena asks for information about sources that Herb, Jim and others granted confidentiality to as part of their occupation as journalists.

It’s really rather appalling, and a little insulting too, that Mitchell, a man with so much experience in the field of journalism, shows so little regard for the sanctity of confidential sources to journalism here.  Especially given how, earlier in the piece, he made a big show of being protective of the “secret” identity of the “Easter Bunny”, even long after everybody else was satisfied that the secret was out.

But what it really goes back to is the central theme of this overall movement and that is the silencing of negative information about publicly traded companies.  Had Greenberg and Cramer complied with the SEC subpoena, their respective careers as journalists would have been seriously damaged.  It’s a complex and even rather controversial subject, so let me just refer you to a seminal 1994 article from the American Journalist Review on the topic.  Essentially, sources with negative information would no longer want to speak with them, for fear of reprisal should their identities be divulged.  A state of affairs that, again, would fall right in line with the true goals being sought here.

But the bottom line is, whether you agree or disagree with the principle involved here, it is something journalists — as Mitchell himself surely knows — take extremely seriously.  Thus, Mitchell’s pretense of incomprehension that this would become the story of the day on CNBC, Cramer’s on-again, off-again (but as of late very much on-again) employer is really quite grossly disingenuous.

Mitchell goes on to rather mockingly describe Cramer and Greenberg’s assertions that the subpeonas were effectively Byrne’s doing, although you’d think the way Byrne celebrated this action at the time would have been rather strong supporting evidence.

Regardless, not long after, the SEC responded to the outrage expressed by Cramer, Greenberg and others with, basically, a “never mind”.  Mitchell, for his part, attributes the SEC’s reversal to “cowardice and strange events”.  Although What “strange events” he means, as usual, he doesn’t say.  Indeed, Mitchell’s piece has by this point established rather a theme of making odd allusions to nothing specific.

Next week: Section Eight, and it has nothing to do with any military service on Patrick Byrne’s part.  What a rip!

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