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Monday, May 23, 2011

FOX News promotes pump-and-dump stock-jockies (Update)

This is huge damn story; I hope you'll share the gist of it with others. For many viewers, the real story will begin about six-and-a-half minutes into the video.

(The YouTube version is at the top of this post; the Vimeo version is at the bottom. Vimeo videos look better but don't always load up.)

I didn't know about the National Inflation Association until a friend to this blog sent a link to one of their well-produced videos, called The College Conspiracy. This lengthy documentary -- offered to the public free of charge -- has already received over 400,000 views.

I created this video as a response to some of the false data propounded by that film -- data concerning the national debt and the nature of the Wall Street bailout. The NIA is yet another Ayn Rand fan club -- and, as is common with Randroids, they do not balk at telling lies for propaganda purposes.

(As long time readers might guess, another reason I made this video has to do with my ongoing effort to acquire some chops when it comes to creating motion graphics.)

The first six minutes of this video argue against the libertarian viewpoint. But the "weltanschauung wars" are only part of the story.

I felt compelled to take a deeper look at the NIA itself. Who are these guys? Why have they suddenly received such respectful treatment on various FOX News program -- and not just on Glenn Beck's show? (Update: Alex Jones is also heavily tied in with NIA. Not surprising. Not in the least.)

This turned out to be one of those stories that becomes quite astounding, once you do a little digging.

Like a preacher who knows how grab headlines with bone-chilling tales of an imminent apocalypse, the NIA hooks audiences with frightening stories and shocking videos. Their primary shtick is to warn people about hyperinflation. You know: $12 for a cup of coffee, nine bucks for a candy bar, that sort of thing.

Do you see any hyperinflation around here? I sure don't. Home prices are still going down. Wages sure as hell aren't going up -- and without rising wages, you can't talk about inflation.

Oil and food prices have gone up. That's because the NIA's buddies on Wall Street are treating the commodities market the same way they treated housing during the Bush years. The commodities market is the new bubble. Matt Taibbi discusses this phenomenon in Griftopia, which I highly recommend. Of course, the NIA kids will blame everyone but the Wall Street speculators.

Let's cut to the chase.

The NIA is in the business of giving away a newsletter which advises people about stocks. Their videos (such as The College Conspiracy) serve as advertising vehicles for the newsletter.

By now you must be asking: If the videos are free, and if the newsletter is free, how does the NIA make money?

Simple. Do you know the term "pump and dump"? The newsletter advises people to buy little-known penny stocks. The price becomes inflated. When the stock reaches its zenith, the original holders bail out -- that is, they dump their holdings at an unsustainably high price.

Near as anyone can tell, the NIA makes its money when companies pay them to be listed in the newsletter. Cynics have suggested that some of these companies don't actually do anything; in other words, they exist for the sole purpose of attracting investment.

The person listed as the CEO of the NIA is a fellow named Gerry Adams. However, the real power behind the group may be Jonathan Lebed. Remember him? He was the 15 year old kid who got into trouble with the SEC when he hopped onto various internet chat rooms to pump up penny stocks. He made a lot of money that way.

Then there is the strange case of the third player in the NIA story, a man known only as George4title. (I don't mention him in the video, mostly for reasons of time, but also because I'm still researching his part in this tale.) He once claimed that the National Inflation Association was his baby. All I know about George4title is that he (unlike Lebed and Adams) lives on the west coast -- and he seems to have followed the Lebed playbook. In George's case, however, he frequented the YouTube community, not AOL chat rooms. (AOL is, like, so yesterday.)

Within the YouTube community, a lot of people have caught whiff of the smell of fish. These outraged individuals consider the NIA, Lebed and George4title to be scamsters. You can see some of their videos here, and here, and here and here and here.

More on Lebed: Until yesterday, the National Inflation Association website had an FAQ section which contained a lengthy apologia for the life and works of Jonathan Lebed. To my eyes, this hilariously unfair and unbalanced bio was obviously written by Lebed himself. The NIA website has scrubbed the FAQ (here's the Google cache version); however, I have preserved the Lebed bio so that future generations may bask in its glory.

You may read it for yourself -- in just a few paragraphs.

But before we get to that, let's engage in a piece of not-entirely-serious speculation. As noted in the video, Jonathan Lebed and Gerry Adams seem to be the same age, and they live in (or at least operate out of) the same town -- Newark, NJ. But the matter goes deeper.

They look alike. They sound alike. They sure as hell act alike.

Are they the same guy?

My ladyfriend has studied these photographs and she says no way. I suppose she's right. But still...well, have a look. Just for fun. I'll tell you this: If Adams has a traceable history, I have not been able to discover it.

Back in 2008, Lebed (who has his own newsletter -- although I sure as hell would not take his advice!) received a blistering interview from FOX business journalist Cody Williard. If you click on the links given above, you'll see the interview. In my view, Williard had Lebed dead to rights. Interestingly enough, Williard was taken off the air shortly afterward. Nowadays, FOX gives the National Inflation Association its full backing.

As promised, here is the Jonathan Lebed bio, which (until two days ago) used to be available on the NIA home page. Was it written by Lebed himself? You tell me:
Jonathan Lebed learned at a young age of 15 years old from first hand experience why Americans should never believe the propaganda that is in the mainstream media. His life experiences made him uniquely qualified to write 'End of Liberty' and we believe he did a very good job. If you want to read a very fair and unbiased article about Jonathan Lebed's activities from when he was 14 years old, we suggest reading the following article written in 2001 by best selling author Michael Lewis:

This article appeared on the cover of NY Times Magazine and Mr. Lebed believes out of thousands of articles written about him, it was the only article that portrayed him accurately and fairly. A longer version of this article was released in a book by Mr. Lewis called 'Next: The Future Just Happened'.

After writing his fair and balanced article and book about Mr. Lebed, Mr. Lewis' career took off. This year he released the book 'The Big Short', which spent 28 weeks on the NY Times bestsellers list. Last year, Mr. Lewis' book 'The Blind Side' was made into an award winning movie that grossed over $300 million. Currently, another book written by Mr. Lewis called 'Moneyball' is being made into a movie starring Brad Pitt.

To the contrary, Cody Willard, who unfairly and unprofessionally bashed and attacked Mr. Lebed in a 2008 interview on the FOX Business Network television show 'Happy Hour' (by rudely talking over him and not giving him a chance to respond), has been fired by FOX Business Network and is no longer on the air on any network.

In fact, on June 20th of 2009, Mr. Willard wrote an article entitled, "Sell gold now - it’s headed below $500/oz". At the same time, Mr. Lebed was telling subscribers of his newsletter that gold was going to $1,500 per ounce and it is nearly there already.

Jonathan Lebed is one of many dozens of people who contribute to our organization. He no longer trades in the stock market and has never bought or sold a single share in any of NIA's stock suggestions.
Poor Jonathan! Why does the world conspire against him? All he wants to do is help people...!

Update: Peter Schiff -- for whom I have some respect even when I can't agree with him -- also calls the NIA a pump-and-dump scheme. Turns out the NIA made The College Conspiracy as a vehicle to sell shares in (get this) a gold mine -- an "inferred" gold mine, at that. Since Fox News obviously made a corporate decision to push the NIA -- well. As I said, this is a big story.

They do look eerily alike!

Thanks for the heads up on this Randian stink tank.
Alex Jones is pushing the College Conspiracy now. "Exclusively for Prison subscribers."
Good old AJ. He never disappoints.
Nice work on the video.
It is amazing what plucking your eyebrows, a little dental work and hair dye can accomplish.
Now that I've looked more closely, Adams has earlobes and Lebed doesn't. Still, it was fun to think about, eh?
Excellent story Joseph. I doubt it will ever see mainstream news, or even much alternative press (which is strange, since a lot of Liberal sites should be eating this up). Don't let it get you down. I'll certainly be keeping an eye on this one.
I first became aware of NIA (whose logo looks as though it should be pronounced "PID" to this aging classicist) back in March when a friend sent me a link to this post:

A cursory examination led me to conclude that they were just scammers hawking gold to the paranoid and I never pursued them in more depth. As always, your thoroughness is much appreciated.
Lebed is a pump and dump scammer with ties to NIA.
These clowns are NOT from Newark, NJ. They are from the burbs in NJ. Lebed grew up in Cedar Grove, pretty affluent town in Essex County, and I believe Adams grew up in Belleville.
I am a personal friend of both Gerard Adams and John Lebed aka "the wiz kid" and I can assure you they are not the same person. However they share a common bond $$$. Gerard adams is most certainly John Lebed's protege. Gerard's 28 and recently has purchase a new Bentley he must be doing something right.
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