Over the past few months I have read (as well as you have) countless stories about Bernie Madoff and Allen Stanford and the Ponzi schemes they ran over the past decade. The term "Ponzi Scheme" is a simply a catch all for paying returns to investors not by actual investment gains, but from capital raised from other investors . . . sort of robbing Peter to pay Paul. In every market downturn like the one we are currently experiencing there will be blow ups at investment-related firms from investment banks, to hedge funds, to private equity funds . . . shareholder capital and life savings will be lost, and reputations will be tarnished forever. However, I must say, the amount of capital stolen or squandered - $50 billion and $8 billion for Madoff and Stanford, respectively, is pretty staggering. The media and the investment communities have focused on the details of "how" and "why" Madoff and Stanford orchestrated these schemes.
Brooklyn Cable Access Television's (BCAT) In the Zone featuring the Shock Exchange appeared on its March 14, 2009 Segment. Go to the 3/14/09 segment also featuring Winky Wright. BCAT is the main source of television in Brooklyn and reaches upwards of a million Brooklynites each year with visual arts, performing arts and media. With the ubiquitous Mr. Bellamy, In The Zone covers local Brooklyn stories and sporting events. Ralph Baker and Dave Neverson discussed everything from the origins of the Shock Exchange, how they incorporate investment management into the program, to the club's nascent expansion efforts. Keep reading to watch the video.
The Washington Post is reporting that Under Armour is about to enter the crowded sneaker market and take on the big boys - Nike, Adidas and Reebok. Under Amour created an untapped market when it created T-shirts that would not retain moisture and marketed them to football players. The company recently made a big splash in basketball circles with its endorsement deal with Brandon Jennings, the first player to jump from high school to play professionally in Europe.
Our website offers advertisers the ability to reach a large, loyal, and growing audience. If you are interested in building brand awareness or buzz about an upcoming event, the Shock Exchange offers distinct advantages and a cost effective avenue to reach a wider audience. For advertising rates and/or additional details please contact Ralph Baker at
The Wall Street Journal is reporting that AIG is seeking to overhaul its $150 billion government bailout package that would substantially reduce the insurer's financial obligations. The crux of the plan is for the government to swap about $60 billion in debt in exchange for certain AIG operating businesses. The first question that arises is how do you value the operating companies being sold? The second question is why should taxpayers make more bets on an AIG turnaround? AIG does not appear to be a going concern reqardless of what the government does. Do you know of anybody pressing to purchase AIG insurance policies? Me either. Here is the article: http://online.wsj.com/article/SB123543559972054331.html
(Picture from Associated Press) At our March 2008 investment meeting there was some sharp debate over the merits of Sirius Satellite Radio and its business prospects. We cited Sirius' pending merger with XM Satellite and its higher than normal churn rate as concerns. Mr. Baker added that when Don Imus did not bolt to Sirius after being fired by MSNBC, Imus' lack of confidence in satellite radio did not bode well for the industry. Since March 2008, Sirius' stock has declined from $2.73/share to 6 cents/per share as of February 12, 2009. Moreover, Sirius is contemplating filing for bankruptcy as it lacks the cash flow to repay its $3.25 billion of debt. The following link describes Sirius' current financial straits. http://online.wsj.com/article/SB123440851532776029.html
The Shock Exchange had its last investment meeting of the summer on August 16th and Drew Cary, a former bond salesman at Bear, Stearns and Dreyfus was there. Drew gave us an overview of the life of a bond salesman and his personal journey from the University of Connecticut to The Street. [Please visit the Shock Exchange Fund webpage in a few weeks for the details of the meeting]. As an aside, I have received about 30 phone calls from friends and family asking for my opinion on the recent financial crisis and what to do with the money they currently have in the Market. The short answer is . . . GET OUT! There may be short-term upticks in the Market due to current or future stimulus packages, but I cannot think of any reason why corporate earnings and ultimately the Market should rise long-term.
Drew (4th from left) Talks Credit Markets With Shock Exchange
In November 2006 our website went live, presenting the team and the concept to a wider audience. Around May 2007 I Googled the term "New York Shock Exchange" just to see what was out there and to my surprise, the website for a men's roller derby team came up. Some team in New York has been calling themselves the "New York Shock Exchange" and their logo is . . . Eureka! You guessed it . . . man in a suit and tie, carrying a briefcase, and instead of spinning a basketball on his finger, he is wearing rollerskates. I was literally in a state of shock (no pun intended) at such brazen swaggerjacking.
To my further dismay (i) when one Googles "New York Shock Exchange" the roller derby team's website pops up ahead of the team's site, and (ii) kids through the NYC were questioning who the real Shock Exchange was --- a travel basketball club or a roller derby team. If "imitation is a true form of flattery" then the Shock Exchange is flattered to death. We are travel basketball's version of James Brown --- the most sampled, imitated, and copied team in sports history. Thank-you for the backhanded compliment! (Picture courtesy of NYSE rollerderby team website).
Bring the top travel teams on the East Coast to City College with its rich basketball history, have them play in front of that NYC crowd with Harlem as the backdrop and some fly gear (with the Shock Exchange Baller Boy logo affixed) as the pay off, and what do you get? You get, Shock Exchange Comes to Harlem, of course. Friday, the first day of the tournament, began as more of a curiosity. Everyone wanted to know who the Shock Exchange was and if the tournament would live up to the hype. Well it did, and then some. The turn out was absolutely crazy, the atmosphere electric, and the teams and coaches all rose to the occasion. By Saturday, everyone was "in it to win it", scouting the competition, checking standings, calculating the road to the Chip for the 5th time, and trying to gain every edge possible - from handpicking courts to handpicking game times - hey if you ain't cheatin' you ain't tryin'.
As everyone looked for an early indication as to where their teams ranked, the Harlem Kings put everyone on notice that they are a force to reckoned with - sweeping the 13U, 14U, and 15U divisions - a feat we will probably never see again. Kips Bay tried to get greedy, taking the 16U Chip and falling just short to Sam Casell All-Stars (who let him back in the NYC) in the 12U finals, while the Playaz had second place finishes in the 16U and 14U divisions. The full results are below:
2008 began with Shock Exchange Comes to Harlem, one of the top tournaments in Manhattan this season. No longer able to fly below the radar, the Shock Exchange had to step up its game and get exposure for the team and the players beyond Brooklyn. We began the season undermanned as we lost a few players from the previous season.
