Saturday, December 15, 2012

Carson Block Chased by Chinese Gangsters

Finally I have some moments to myself and I can take a break from the stressful events of the past few hours. I look at the time and it is past lunch. I realize that I have not yet eaten all day and call my personal assistant into my office. She walks in with some paperwork and places several reports on my table which include updates on developing stories.

She looks at me and examines me for a few brief moments before she picks up the phone and orders a large Hawaiian pizza with extra pineapples and cheese, Pepsi with extra lemons and Tiramisu for dessert plus Irish Coffee with extra Baileys. I smiled at her and she returns the smile and said that I looked like I needed it. I thank her as she walks out of my office. She turns on some classical music and closes the door informing me to get some rest over the next 30 min until my food arrives.

I put my phone on silent and my assistant will make sure that no calls will be send to my extension while I get some much needed rest and enjoy my lunch. I lay down on my couch and close my eyes as I drift away for what appear only moments, but I did manage my 20 minute power nap until the soft voice of my assistant awakens me after my food arrived.

I ask her partially joking partially serious what I would do without her and she looks up at me and responds that I should be happy that I don't have to find out. She asked if there is something else she can do for me and I ask her to join me for lunch. She sits down across the table from me and I ask her to help herself. She asks me what I think about the latest developments out of Muddy Waters. I swallow a bite of my pizza and tell her that I did not know she followed events surrounding Mr. Block and his firm.

Since she seems to be so much more informed about the current situation I ask her to get me caught up on the situation. She seems rather excited to be the source of information for me on a topic that slipped off my radar screen. She tells me about Mr. Block's latest short recommendation which is Olam International, a commodity giant responsible for roughly 90% of the planet's peanut trade based in Singapore and backed by the government.

Block compared Olam to Enron and said the company is doomed to fail. After Block's report on Olam its U.S. listed shares dropped 20%. 48 hours later Olam filed a suit calling the allegations scandalous. Block was the first to report on Sino-Forest which is now bankrupt and his first report on Chinese companies was Orient Paper. In total Block helped China wipe off $7 Billion in market value.

Block stated that he stopped short selling Chinese companies after his employee were harassed at a storage facility he owns in Shanghai. Tattooed gangsters were looking for him as well and the government has hindered his analysts from performing their due diligence. Block is accused of spreading fear and panic in markets.

So far Block's research is responsible for the collapse in share price in excess of 60% in eight different companies. Olam is the latest victim of Muddy Waters and their Singapore shares have lost 16% since Block first mentioned his concern about the company. Olam has much further to fall if it will face the same fate as the other eight companies. Olam's second biggest investor is state owned Temasek Holdings.

Block has made plenty of enemies and usually refuses to disclose his location when he joins conference calls or interviews. Some call his research as well as allegations ludicrous and Block claims China has used the Ministry of State Security as well as the Public Security Bureau in order to deter research by Muddy Waters into Chinese companies.

She asks my about my opinion about Block. I tell her that I do have respect for the work he does and his fearless approach. He likes to dig deep and is not afraid to step on the wrong people in order to validate his research. He may not always be right with his conclusions, but he stands up for what he believes.

I look at the time and she informs me that I need to get ready for the next conference. We finish our meal and I decide to take m time in order to enjoy dessert. I don't see the point of rushing through with everything I do and do take my time to enjoy the things I like. Sometimes the world has to wait a little.


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