saw dust memories

Remember what Smokey the Bear used to say, “only you can prevent forest fires,” but what of these financial conflagrations, destructive wild fires destroying a less than ideally pristine stock market environment where the forest rangers always seem to arrive after the bad guys have spilled the gas and lit the match. Another one bites the timber dust:

( see link) Sino-Forest, which has denied all fraud allegations against it, believes the report from Muddy Waters was defamatory, and it is seeking $4 billion from the firm and its founder Carson Block to recover profits. Sino-Forest attests it was hamstrung by the report, which it says had “catastrophically negative” effects on the company. Sino-Forest said its accounts receivable were more difficult to collect, its creditors demanded payments, its sales slowed and its assets were frozen, according to The Washington Post. …

---Artist: Hansen Date: 1949 Size: 18.5"x26" Comments: Charming Smokey the Bear U.S. Department of Agriculture Forest Service poster from 1949. Shows Smokey and adorable animals in front of devasated forest. Smokey posters are always popular and hard to find. Price: $295---Read More:

There has never been a single play by the Greek dramatist Meander to have come down to us in its entirety. Although he wrote more than a hundred comedies, almost all of his work was lost until a lucky discovery in Egypt in 1905 gave scenes from about a dozen of his plays, but not one single drama complete. To the highly civilized but war shadowed world of fourth century Athens, Menander ( 342-291 BC) was the very dramatist to hold up the mirror. The city was occupied by Macedonians and Athenians had lost their mettle and were prepared to endure a generous tyranny for the sake of comfort. Menander understood the temper of his times. One of his characters says, “Stay at home, a man is free nowhere else.”

I look at Carson Block, the man who got behind the smoke and mirrors of this arcane, paper shuffling entity that appeared to lack the purported value it declared, as a sort of find of leaves of Papyrus that make up almost the missing pieces, allowing one to complete Menader’s plays. The acute characterization of Block, a kind of anti-hero, hero, the forensic short seller, the new Sheriff in town in a post-modern context encompassing Menander’s humanity, naturalness of style and a certain broad wisdom; realistic ways of dealing with basic conflicts. But lie the recovered papyrus there is little punctuation, no division between words and frequent mistakes in meter and spelling; syllables and occasional words are lacking and there are some gaps of several lines in length. It is up to us to make a number of corrections and reconstructions, and fill in a few lines that are lacking.

…On Friday, timber company Sino-Forest Corp. announced it had filed for the equivalent of Chapter 11 bankruptcy in Ontario Superior Court, put itself up for sale and filed a defamation lawsuit against the firm Muddy Waters Research….

---Unfortunately for us, no play of Menander's has survived. * We have a few fragments of scenes; we have many quoted sentences; we have the Latin adaptations of Plautus and Terence: but we have not a single play complete by which we could make up our own minds as to his dramaturgical skill. * We can judge of him as a poet and a moralist by means of the lines preserved here and there by his admirers. But although we have one play of Terence's which seems to have been derived without admixture from Menander, this is really not enough to justify any judgment as to his play-making faculty.---Read More:

Sino-Forest, which operates primarily in China and also has offices in Canada, is currently under investigation for fraud as a result of the report by Muddy Waters released in June 2011 that accused the timber holder of exaggerating its assets. After the report was released, shares of Sino-Forest, listed in Toronto, lost more than two-thirds of their value before their trading was suspended, according to Timber Trades Journal. Read More:

In ancient times, Menander was celebrated as the chief creator of the New Comedy. He departed from the bawdiness and vilification of the Old Comedy and the rowdy burlesque of the Middle Comedy at its height and began to present situations that explored real human values and moved toward a reasonable solution, even when they involved standard characters in familiar plots.The qualities that made Menander’s reputation were above all, his truth to lofe. This was the poet who wrote, “think like a free man and you will not be a slave.” And again, “all that defiles a man comes from within.” And further, “Evil communications corrupt good manners.”

( see link) ….Block, in an interview with Reuters on Monday, said that it is “absolutely not” his fault that Sino-Forest, whose stock was halted

ug. 26, 2011 after dropping more than 70 percent following the allegation in a Muddy Waters report, is in such trouble.

“It remains to be seen how big a deal this becomes. First of all, resolutely we believe this is groundless. Without understanding Canadian procedure, I cannot comment on how quickly we can get rid of this,” Block said about the legal action the company said it is taking.

“If this business really were the business that the company had previously presented to the market, then it would be flourishing right now and probably would be free cash flow positive for the first time in its existence,” he said.

Sino-Forest was granted protection by the Ontario Superior Court of Justice under the Companies’ Creditors Arrangement Act, the equivalent of U.S. Chapter 11 filing.

Messages left with Sino-Forest’s investor relations department seeking its response to Block’s comments were not immediately returned.

The 35-year-old Block, who has never been sued before, is perhaps the best known member of a group of short-selling investors and financial bloggers who exposed fraudulent accounting practices among China-based companies with U.S. or Canadian stock listings.

The size of the announced lawsuit has brought some focus back to his life, he says. Before he had found himself drifting while trying to build a bunch of laptop toting analysts into a more formal research business with a permanent home following Muddy Waters’ series of reports in 2010-11 about Chinese companies listing in the U.S. and Canada.

Block said the size of the damages Sino-Forest says it is seeking was so huge that there was “almost a comic element”.

Sino-Forest is the most prominent among a series of recent accounting scandals that have tainted the image of Chinese companies listed in North America. The scandals have prompted trading halts, de-listings, lawsuits and regulatory probes in both the United States and Canada.

Muddy Waters has made an outsized name for itself in this small corner of the financial markets. It has issued reports on six companies and has raised a question with the management of a seventh. There were just two people, Block and a partner who has since ended his working relationship with the outfit, behind the first Muddy Waters’ report on Orient PaperĀ  in June 2010. The stock fell precipitously after the report’s publication but the management defended itself vigorously, later saying it felt victimized by Block. The stock has yet to recover.

By September 2010 Block, who speaks Mandarin, says he was living in Shanghai, with debts “in the low six figures”, traveling to New York on the cheap, flying economy and staying in low budget hotels. Block says since Muddy Waters began publishing its research on Chinese companies he has gotten at least five death threats or threats of bodily harm to either himself, his wife or his father, making him cautious about revealing his exact home base in the United States.

The same goes for information on his fledgling firm. He would only say that around 15 people are now working for Muddy Waters, not all of them full-time. A number are based in China but he declines to say where….

The firm does not have clients for its research, rather it runs itself much like the proprietary trading desks at major investment banks that trade on the firm’s behalf rather than investors. There is no hedge fund structure in place at Muddy Waters.”Why do people think we have clients?” Block said in answering a question on his business structure. “It is run like a prop house. Substantially all of the money that is involved is basically money from the people doing the research. A couple of friends have given me small amounts of money, it is in there as a favor,” he
said…. His debt now paid, Block said “no comment” when asked if he was now at least a millionaire. He pondered for a moment to add, “I’m not a billionaire and I don’t have $4 billion to pay Sino-Forest.” Read More:

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