Japan needs 100kbd oil demand as replacement for nuke power.

C1 Energy (Shanghai) – Mar 16, 2011 ---Japan's Fukushima- Daiichi and the Fukushima-Daiini nuclear plants, whose combined capacity takes up 10% of Japan's total nuclear power capacity, were severely damaged and closed and may potentially remain offline for years or permanently, this will mean a loss of about 70% of Tokyo Electric Power Company's (TEPCO) total nuclear power capacity and long-term replacement fuels demand in the region.
According to data from TEPCO, the accidental-broken Fukushima- Daiichi and the Fukushima-Daiini nuclear plants has an installed power generation capacity of 4.7-mil kW and 4.4-mil kW respectively (details in below table). Their operation rates in 2010 were recorded as high as 80-85%.
As C1 estimate, when the industry recovery and post-disaster reconstruction take place, and increasing power demand come back, the sustained loss of a significant amount of nuclear power capacity will have a significant influence for the oil, LNG and coal markets. C1 expect that Japan is likely to boost fossil fuel imports in order to offset the loss of its base load power source.
If the oil-fired power plants and peak load shaving power plants in the quake-hit area restarted in the future, Japan may need about 400,000-500,000mt of sweet crude or LSFO per month as replacement.
If shut-down refineries in Chiba resume operation at the same time, these refineries can meet 60-70% of the demand, but Japan may still need to import 100,000-200,000mt of fuel oil or crude per month.

link:

http://www.c1energy.com/common/3301138,0,0,0,2.htm

$LPH: Asian oil prices to rise due to Japan crisis. If so, then crude oil prices should rise a bit in China and as refinery prices and retail prices are allowed to rise every 22 days, LPH can make a little extra profit from selling what is already in their tanks (originally purchased at lower prices from refinery) as prices are notched upwards. This is a potential time to take advantage of upwards movement in oil.

C1 Energy (Shanghai) – Mar 16, 2011 ---Oil product prices in the Asian market are expected to get support from possibly less supply from quake-hit Japan.
Japan shut about 30% of refining capacity after quake, as a result of which its oil product output might decline, according to international traders. Additionally, the country's demand for oil products would rise amid disaster-relief, the traders said.
Due to production suspension of some Japanese refineries, buyers had to purchase oil products from refineries outside Japan, said a source with the Formosa Petrochemical Corporation. South Korean refineries, which had been running at high rates, would become more likely sources, the source denoted.

Link:

http://www.c1energy.com/common/3301131,0,0,0,2.htm

So much for theorizing about justice being served.

Thanks a bunch for the charts, looks promising.

So with any luck my 20,000 shares might do a bounce from 4$ to around 6$ or 7$, then decline if the outcome is pink sheet punishment for fraud.

If the outcome is just a forensic audit and a restatement of related party transactions, but real earnings similar to those originally stated in the 10Qs, then the outcome might go upwards by 50 percent -- intial drop to 6$, followed by bounce to 9$ or $9.50, then decline.

Management, BOD would've skipped town if totally fraudulent, given China's strict laws, don't you think?

CCME - an advertising Media company installed on buses everywhere, their name almost a household name... therefore extremely high visibility to PRC government, especially in this time of company crisis. Therefore, their CEO would quite likely be arrested for embezzlement and fraud since there is a chinese subsidiary company incorporated there, as well as the US company, which is contractually related.

That tells me there may be a bit less of a fraud than previously thought. If it was 100 percent or even 60 percent fraudulent or embezzlment with ficticious cash balances, then the entire management and board of directors would be scared to death and would have to be on board a flight by now to save themselves from arrest and execution.

Not too long ago two executives of a Chinese company were EXECUTED for embezzlement. In addition, just one month ago 2 other executives from China Gas Holdings were arrested by the PRC for embezzlement.

I am quite sure the PRC government is aware of who CCME is, given their faces present on buses everywhere, and given the incredible media attention going on now in the US media. Heck, CCME is even advertising itself on its own TVs every few minutes.

So company management is FULLY aware of China's strict laws and would have left the country last Friday if indeed they had embezzled a huge amount of money. Seriously, think about it for a minute. (So I wonder where they are located right at this moment.)

So if any of the managment is remaining behind to run the company, it doesn't just show they have balls, it actually would indicate they do not believe they have committed massive fraud. No one in their right mind who was guilty would just remain behind at CCME and just sit there and wait to be arrested, tried, and executed.

So I think there is some or even a lot of real cash flow from the operations and perhaps even the bank balances will show that the company itself owns the cash they claim to own, otherwise management is sitting ducks for prosecution for fraud and embezzlement, and that is clearly the wrong side of the trade to be on if you want to live to see another day.

LCD TV Media company - High visibility to PRC government. CEO would indeed be executed for violating China laws.

That tells me there may be a bit less of a fraud than previously thought. If it was 100 percent or even 60 percent fraud, the entire management and board of directors would be on a flight by now to save themselves from arrest and execution.

Not too long ago two executives of a Hong Kong company were EXECUTED for embezzlement. In addition, just one month ago 2 other executives from China Gas Holdings were arrested by the PRC for embezzlement.

I am quite sure the PRC government is aware of who CCME is given it's well known status in US media and given how many buses are out there with CCME TVs installed.

These folks are well aware of China's strict laws and would have left the country last Friday if indeed they had embezzled a huge amount of money. Seriously, think about it for minute.

I can find Hi/Lo/Close, I want to see the curve and volume and compare to number of shorts versus float.

That is the only way to compare two cats thrown out of a building.

With that many resignations, Nigel, the probability goes down by a factor of 1/2 with each additional resignation that there is much left of viable cash to run the company. But I will try to stay neutral just in case. Nevertheless, this is the story of my lifetime. Just too bad it's happening to me instead of watching it on TV.

RINO halt/reopen timeline for shorts buyback bounce:

I cannot find an intraday that far back for 12/8/2010, which seems to be the day RINO reopened pink.

Anyone have a free link to older intraday charts?

OK time to cut back spending.

Anything is possible between Rato's versus Zaudio's theories.

Still have my health, although reading sickens me.

Focusing on this size of total losses could easily give me and everyone else ulcers at this point.

I will be monitoring each evening to see what the status is and if it goes pink will try to catch the microsecond shorts bounce.

Advice appreciated.

Count me in, you already have my name and address.

Second letter RE: offensive strategy should go to different addressees: CCME's legal firm and CCME's PR firm. The reason it should go to their PR firm is specifically because they are EXPERTS in advising for crisis management. We need to bend their ears a bit, even if they don't reply to us

Thanks for the more even-tempered reply. Several points:

1) Toups is probably more experienced that Crane, first off. Yeah, two-bit bashers on Yahoo message boards have occasionally bashed Toups regarding lack of experience in the oil business - one of his prior CFO jobs was with a China lighting firm, but in reality it does not mean he is not experienced for the job at hand.

2) What I meant for experience making a difference -- LPH's CEO really has his act together, having been in the business since 1995, and he has connections to all the refinery suppliers and knows people in government for acquisitions and licenses. In short, he has the experience to both run the company profitably and efficiently, as well as to be able to acquire and expand.

3) Actually paying with shares is not excessive compared to some of the RTOs out there. Check the filings to be sure, but I recall that the old CFO Crane and RedChip were paid with a lot more shares in the early days, as a percent of float, than Toups is taking nowadays. Compare management shares of total outstanding shares as a percentage for LPH, versus a company like LLEN, where management is paying themselves with 10 percent of the company's net revenue in stock value every year. What you want to look for is eroding shareholder value via dilution if management issues themselves new shares, or selling off excessive percent of float in shares each year, as if they don't trust the company. Management owns 70 mil shares, yet only once (last December) did they sell 3 mil shares. Before that I didn't see any share selling for over a year as far back as I was looking.

4) Prepaid inventory - they list this on each 10Q and it is an advance to suppliers. The auditors should be verifying directly with these suppliers, most of whom are in fact owned by the Chinese government. So yes, if we had a breakdown by individual supplier, then we could more easily say for sure, X percent of the total advances is from a refinery with >50 percent ownership by the PRC government. And if the auditor calls one of these PRC-owned supplliers, they seriously have to give out an accurate number on their record books for payments from LPH as an advance to supplier, since Chinese laws are VERY strict - they could be executed for financial fraud.

5) You may be mistaken on the source of funds of the 20 million downpayment. The S3 in December was made effective by the SEC in February, and AUTHORIZES LPH to issue $50M of shares. However, it hasn't happened until you see another SEC filing. The $20M therefore came from cash on hand. The letter of intent is not a final deal, and the balance for the acquisition will be a combination of bank loans and shares issued per the S3. So at least they are spreading out the financing better than in the 2009 acquistion when it was 100 percent financed by PIPE shares/warrants issued. This time some is cash on-hand, some will be share issuance, and some will be bank loans, which is more fair to shareholders.

6) Please explain in detail with sources of information as to how you concluded operating expenses dropped 40 percent. We are happy to share due diligence and work with each other to improve upon each other's research on this board.

Any SmokingGun? versus general reasons CCME targeted by shorts:

I don't think there was a definitive smoking gun as to any insider information known far in advance which could have driven the very high short interest far in advance of hit pieces. Rather, CCME just appeared to be an excellent red flag candidate for the following reasons:

CCME was an ideal short candidate among US-listed China stocks - initially, CCME passes on several criteria which are on the red flag screeners list for good hedge fund short: (1) BIG PPS rise in the last 6 months; (2) PPS well above 10$/sh; (3) P/E well above the average among the universe of US-listed China microcaps; (4) a HUGE increase in revenue over last 12 months; (5) a HUGE increase in bus count over last 12 months.

Items 1, 2, and 3 just mean it has less resistance and lots of downside room to fall if they short it. Items 4 and 5 are hints that just maybe something was exaggerated or overstated.

That merely explains why hedge funds asked Muddy Waters (or vice versa) to do some "research" or digging. The results of this research may only provide further suspicions but it is a more focused "company-specific" red flag suspicion, not definitive but lets call it "red flag level 2".

In this case "red flag level 2" might have been the following: (1) comparison of much greater margins of CCME versus its peers - part of the "too good to be true" hypothesis; (2) initial phone contacts with paying advertizers did not often result in confirmation of contracts with CCME - again while this is a great red flag, there can also be explanations - the contracts with manufacturers are not direct but instead indirect between CCME and third party advertising agencies. Still, that is a great short candidate because of FUD factors. (3) Difficulties in verifying on-the-ground bus counts - so many companies involved, that phone contacts often reveal an undercount of claimed buses. Again, some of the reasons are that subcontractors are involved - but it is another "red flag level 2". Since it is almost impossible for any third party to quickly and accurately verify a high percentage of the claimed buses - imagine tracking and trying to tally moving ants in your backyard - this also has a very high FUD factor because it may take weeks or months to refute any discrepancies claimed in a "research article". (4) There may be more specific factors in related party transactions that Rato alluded to, but so far none of the major hit pieces thought those were worth anything as far as talking points in hit pieces. Plus, many, many companies' executives commonly try to get a little piece of their own company stock profits without red-flagging the general retail investors with an SEC filing of a stock sale, it's just part of compensation.

So there you have it - basically CCME is a B+ on the short screeners list, and an A- on the FUD factor hard to verify category of followup research. Basically, it can take weeks or months to counter certain allegations, which is why it has to be halted for a more detailed audit.

Welcome to I-Hub after you created this alias yesterday and bashed two stocks right off the bat with expletives, generalized innuendo about scams, and without even offering any evidence to cry about fear, uncertainty, and doubt.

First, no one will listen to your sheep-scaring run-on sentences with expletives on I-Hub. You will likely be banned by your third or 4th post. Your post did not contribute anything and didn't not even ask any specific questions. Kind of a waste of your I-hub membership dollars unless you use it to learn something. Maybe try reading up on LPH a bit, you will find they are a reliable company in business with the same CFO since 1995, and who executed an acquisition in 2009 that doubled their EPS. And they just signed on another acquisition using $20M cash down payment.

Nice work. Maybe add something about when the audit is finished, management should consider whether appropriate include details in a press release statement, such as, all cash balances were fully verified via forensic audit, all contract bus counts were fully verified, and it was found that allegations related to income and bus counts were completely unfounded, and all advertising billing was based on information correctly representing the contract terms for the period in question (this would prevent advertisers from thinking they were over-billed for bus-airtime-minutes per period).

FYI: CBEH had hit pieces last year, too. They had a facility they were paying rent for to a related party. Not a game-changer, but enough to knock price from $8 to $6 as I recall.

Value1008: Nicely worded.

Mtnbiker: I agree fear induced sentiment is STILL what the shorts are banking on. Why do you think they are still bashing during the halt over on YMB? They want to make sure that no matter what the outcome of the new auditor's 10K, they still have a the long's feeling like a bunch of trapped sheep.

That being said, over a long period of time, like 3 months as was the case for NEP, the shorts kind of get tired too. So a halt kept in place for 3 months doesn't hurt longs and gives everyone a chance to let go of their emotions and step back and really be more objective when the 10K is finally released by a new auditor.

So I fully agree with you when you state, "I would suggest to them, keep the halt in place for as long as it takes, take your time and do it right, cover all your bases, and make your common shareholders a top priority."

cfgir that was NEP letter to Mr. Bruce, chairman of the NEP Board of Directors. Mr. Edward Rule was replying to the resignation of Mr. Bruce. He states, "I would like to thank you for your letter dated July 22, 2010. The Company very much appreciates the thought you devoted to the letter. I also want to acknowledge the hard work you have expended on behalf of the Company and your commitment to improving the quality and productivity of its business. I would like to take this opportunity to respond briefly to the concerns and assertions in your letter."

Link to IHUB post of complete letter:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=53388543

This was when Mr. Bruce just resigned: here is that news:

"Independent director, chair of the audit committee resigned August 8th. On August 9th a new Director and Chair of the audit committee was announced.
---------------------------
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


On August 8, 2010, Mr. Robert Bruce provided China North East Petroleum Holdings Limited (the “Company”) written notice of his decision to resign from the board of directors and his position as chair of the audit committee of the board of directors, effective immediately. Mr. Bruce’s resignation is the result of a disagreement with the Company, the bases of which are set forth in his resignation letter which is filed herewith as Exhibit 17.1.


The Company has provided Mr. Bruce with a copy of the foregoing disclosure and requested that Mr. Bruce provide the Company with a letter addressed to the Securities and Exchange Commission stating whether he agrees with the statements made by the Company in response to this item.

On August 9, 2010, the board of directors of the Company appointed Mr. Yau-Sing Tang as a director of the board of director the Company and chair of the audit committee of the board of directors effective immediately."

NEP forensic auditor: John Lees Associates:

This from an I-Hub NEP board post last summer:

"after the painstaking forensic audit of John Lees Associates (“JLA”), “no evidence exists to indicate that funds were misappropriated, stolen or otherwise misused” by anyone. I assume you also appreciate the substantial and costly efforts of the Company in assembling the restated 10Qs for the first three quarters both of 2008 and 2009, as well as finishing the 10K for 2009 and the 10Qs for the first two quarters of the year. Your input into these efforts was invaluable.

I also appreciate your express acknowledgment that, by suggesting certain action, you do not intend to imply or state “any knowledge of any violations” of the Foreign Corrupts Practices Act (“FCPA”). As you know, in its meticulous forensic report, JLA did not identify a single violation of the anti-bribery provisions of the FCPA or identify a single transaction in which such a violation even may have occurred. Nor did JLA recommend any investigation into any prior transactions.

Regarding the “additional steps” to which you allude, we wish to make some brief comments. As you know, the Board of Directors has now received a confidential memorandum from company counsel, the Crone Law Group, that recommends certain action and changes for the Board to consider regarding the FCPA. The Board will duly consider the recommendations at its upcoming meeting.

I anticipate that the Board also will undertake, at the appropriate time, through the appropriate personnel, a review of the Company’s financial filings prior to 2009, although based at least on the JLA report, it seems unlikely the review would necessitate any material changes. Nor does it appear that such an undertaking is urgent or at all time sensitive. The Company is focused on the goal of completing the compliance plan that NYSE-AMEX has approved and thus ending the current trading halt of its stock. I believe this goal is in the best interests of our shareholders, and see no basis to jeopardize this goal with a review of the 2008 and 2007 filings at this time for the reasons stated. Further, as you note, you are unaware that any of the filings in those years contain any “materially misleading” statements.

I also do not believe, however, as you apparently do, that taking action that results in the delisting of the Company from NYSE AMEX is in the best interests of our shareholders. You suggest that rather than focus on completing the current compliance plan that NYSE AMEX has approved, the Company instead conduct an FCPA investigation, which you project could last as long as a full year and cost the Company as much as several millions of dollars, notwithstanding that a recent forensic audit did not find any basis to presume the likelihood of a single FCPA violation. And, you admit that this action “would likely lead to the Company’s delisting by NYSE AMEX and possible additional shareholder litigation.” As you know, a delisting could destroy shareholder value. Thus, the course of action you recommend that the Board pursue seems at odds with the prudent discharge of duties to the shareholders.

I look forward to discussing these matters further at the next board meeting


Very truly yours,



/s/ Edward Rule
Edward Rule

Chairman of the Board of Directors

China North East Petroleum "

Look at who did NEPs forensic audit - think it was Ernst & Young was it not?

I dunno if they are big 3 or big 10 or top 50, but they have the balls to go after a bigger mess than CCME when they took on two years of resubmitted 10Qs and 10Ks. And very successfuly managed to resubmit all of them, I might add.

There were a bunch who bought more after the hit pieces, myself included

Maybe Deloitte asked for advertising customers bank statements to prove that there wasn't collusion - money from black pool flowing into advertiser account, then flowing back from advertiser's account to CCME's account to be recorded as revenue.

This is my response to WCTBills log quote: "Jacky Lam either resigned on his own or was fired for failing to retain Deloitte and negotiate properly to Deloitte's audit demands. I also heard that Deloitte's demands were highly unreasonable."

That would be consistent with WCTBills earlier diagram of the concept of an SAS99 investigation, where the circle of examination is expanded outside of CCME to entities having financial transactions with them.

That would be considered an "unreasonable demand". Almost a guaranteed way to really, really piss off a customer if CCME demanded to see THEIR bank account statements.

Another possibility is that "unreasonable demands" involved the personal bank account statements of other related parties - the board of directors of Star, Hank Greenberg himself, or others.

A third possibility is that they just wanted too long to finish the forensic audit due to time required to chase down 20,000 buses in person - perhaps another 3 to 5 months to physically verify VIN numbers - which cannot be faked unlike license plates.

A fourth possibility is Deloitte wanted to triple or quadruple the amount they were going to charge CCME. Doubt this is the issue since CCME's revenue stream and market capitalization would dwarf any audit costs I could imagine.

Comments/arguements?

Hopefully filing alludes to relative magnitude of problem in terms of how much revenue could be affected. Hopefully it is worded as inadvertent errors because intentional fraud could get them to the pinkies, even if a large portion of income is real.

If the restatement process can be completed and they can avoid pink sheet demotion, then at least the stock makes money and may live to see the light of day like NEP did when trading resumes. However, like everyone else, I have no ability to predict anything either way. GLTA.

For real, that doomsday? I would think those TVs are still installed and working all over China bus routes, aren't they? So there is cash flowing in.

But your statements do conjur up Roddy Boyds images of going into dark hallways and finding no one works there anymore except the janitors. Reminds me of CEU's video a few months ago.

Idea: make our money back: message board realityTV.
We can have BURRPP drinking on the night the auditor resigns, but next morning staring at 13 LCDs while he talks on PalTalk, JoeNatural with 3 telephones in his hands calling all the PR firms in the country, and WCTBills as himself racing around China like in the Amazing Race show. Lastly, we need hidden camera footage of the evil Muddy Vaters in a darth-vader falsetto constantly cutting and pasting scanned documents using Photoshop and arranging phone calls in a disguised voice with a blurred out facial image talking to chinese people like it was one of the TV cops' child porno sting operations. Oh yeah, that can be Carson's day job, making fake porno movies with microsoft movie editor.

I don't blame anyone, just myself for overweighting.

After first hit piece I set up a buy order at 3:56pm for a few shares.

Then AFTER execution I realized I had added an EXTRA ZERO to the number of shares -- was distracted watching level 2 and trying to pick a bid price during volatility that day.

So right off the bat I owned 10X the number of shares, but didn't want to sell it after hours.

Next day I wanted to sell the excess on catching the dead cat bounce, but I missed the peak while I was taking my son to the bus stop.

Attempting to sell again later that day, I could not come anywhere close to making back my buy-in price, so I sold merely 1/3 of my position at a small loss. I thought I could always sell another day.

Then Muddy Waters' hit piece came out, lowering the price dramatically from the mid-16s to low 11s, and at that point I made ANOTHER mistake to average down big time (despite being overweight beforehand).

Lastly, a week or two later I dumped a bunch of OTC.BB stocks that had started to show weakness, and then put that cash to work in CCME on a day when there was YET ANOTHER hit piece.

So from one starting mistake with a decimal place, then inability to catch the bounce, then following up with betting too much by averaging down, I ended up breaking all the rules. Thus, over merely a one month period, my CCME position went from 0 percent of portfolio to 74 percent portfolio.

Uggh

Global Hunter Suspends Coverage: Article:

https://ghsecurities.bluematrix.com/docs/pdf/18df7799-a237-4c27-99ef-fd5951c2e667.pdf

MARCH 15, 2011
"Suspending coverage."

"Summary: CCME announced the resignation of its independent auditor, Deloitte Touche Tohmatsu, and Chief Financial Officer, Jacky Lam. We are suspending coverage until the company takes action to protect shareholder interests.

Highlights

On Monday afternoon, CCME announced the resignation of its independent auditor, Deloitte Touche Tohmatsu (DTT), and Chief Financial Officer, Jacky Lam. The press release indicated: "The DTT resignation letter stated that DTT was no longer able to rely on the representations of management, and recommended that certain issues encountered during the audit be addressed by an independent investigation. DTT's letter also stated that these issues may have adverse implications for the prior periods' financial reports and that, in their view, further investigatory procedures would be required to determine whether the prior periods' financial reports are reliable."

The company indicated that it intends to authorize an independent committee to launch an investigation and engage a forensic accounting firm and independent legal advisors while initiating a search for a new CFO and new independent auditor. The company expects that 2010 final results and the filing of its 10K could be delayed for at least a month. In February, during our due diligence trip in China, we asked the company to present its bank statements, tax filings, advertiser and bus operator contracts for the last three years. From its customer and bus operator list, we picked 16 advertiser agencies and 17 bus operators, and asked the company to provide contacts and arrange meetings with them. These contacts were provided by the company’s Chief Marketing Officer, Chief Operating Officer and accounting manager. We also talked to eight senior and middle-level managers within the company to cross-check revenue and bus numbers. Our belief at the time was that we had checked 50% of the 2010 estimated revenue and total number of buses. We issued our February due diligence report based on these documents and interviews we had with the company’s business partners. If Deloitte’s resignation indicates the company is indeed a fraud, it likely means that the company has forged documents and colluded with these 30-40 parties. We have documented all of these companies and the names and telephone numbers of individuals we interviewed, as well as the notes of conversations for the purpose of compliance checks and in case of any investigation.

Unfortunately the company has not disclosed the specific issues raised by DTT. For the benefit of current shareholders, we urge the company to provide more clarification to the public. In addition to finding a new auditor and CFO and completing its investigation, we believe the company should use its cash to repurchase shares.

Until we get further clarification of the issues raised by DTT and see the results of the independent investigation, we are suspending our coverage of CCME."

Global Hunter Suspends Coverage: Link:

https://ghsecurities.bluematrix.com/docs/pdf/18df7799-a237-4c27-99ef-fd5951c2e667.pdf

MARCH 15, 2011
"Suspending coverage."

"Summary: CCME announced the resignation of its independent auditor, Deloitte Touche Tohmatsu, and Chief Financial Officer, Jacky Lam. We are suspending coverage until the company takes action to protect shareholder interests.

Highlights

On Monday afternoon, CCME announced the resignation of its independent auditor, Deloitte Touche Tohmatsu (DTT), and Chief Financial Officer, Jacky Lam. The press release indicated: "The DTT resignation letter stated that DTT was no longer able to rely on the representations of management, and recommended that certain issues encountered during the audit be addressed by an independent investigation. DTT's letter also stated that these issues may have adverse implications for the prior periods' financial reports and that, in their view, further investigatory procedures would be required to determine whether the prior periods' financial reports are reliable."

The company indicated that it intends to authorize an independent committee to launch an investigation and engage a forensic accounting firm and independent legal advisors while initiating a search for a new CFO and new independent auditor. The company expects that 2010 final results and the filing of its 10K could be delayed for at least a month. In February, during our due diligence trip in China, we asked the company to present its bank statements, tax filings, advertiser and bus operator contracts for the last three years. From its customer and bus operator list, we picked 16 advertiser agencies and 17 bus operators, and asked the company to provide contacts and arrange meetings with them. These contacts were provided by the company’s Chief Marketing Officer, Chief Operating Officer and accounting manager. We also talked to eight senior and middle-level managers within the company to cross-check revenue and bus numbers. Our belief at the time was that we had checked 50% of the 2010 estimated revenue and total number of buses. We issued our February due diligence report based on these documents and interviews we had with the company’s business partners. If Deloitte’s resignation indicates the company is indeed a fraud, it likely means that the company has forged documents and colluded with these 30-40 parties. We have documented all of these companies and the names and telephone numbers of individuals we interviewed, as well as the notes of conversations for the purpose of compliance checks and in case of any investigation.

Unfortunately the company has not disclosed the specific issues raised by DTT. For the benefit of current shareholders, we urge the company to provide more clarification to the public. In addition to finding a new auditor and CFO and completing its investigation, we believe the company should use its cash to repurchase shares.

Until we get further clarification of the issues raised by DTT and see the results of the independent investigation, we are suspending our coverage of CCME."

If Hank's 90M really is in the game then I would guess that the lion's share of CCME revenues are REAL. But then again rich Wall Street tycoons aren't perfect, either, although they act on better informational inputs and inside details than you or I will ever have in our possession for something we are investing in.

At least that gives me some hope, but don't take that as a pump, either.

My first buys all AFTER the hit pieces. I hope my biggest holding somehow is vindicated in terms of most of CCME's earnings being real. That is the only way my portfolio can recover from this fiasco.

Here is how I was fooled: Reading everyone else's opinions, SeekingAlpha positive articles, Global Hunter's revised check of customer revenues, and WCTBills refutations, I really thought the hit pieces were not finding anything because they were all apparently based on fabricated and/or flawed evidence.

But I guess the point there is that Muddy Water's or their clients take the following approach:

1) They look for stocks that oddly have higher profit margins than their peers and stand out with a past 12 month history of huge PPS gains. They avoid 2 dollar stocks (not worth the trouble of shorting) but go for 10 to 20 dollar stocks that have risen a lot in the past 12 months

2) They collect as much speculation on what angle to approach the hit piece using input from sophisticated hedge fund managers - Don't think Carson Block's 5 years experience taught him what to fabricate -- the invisible hedge funds behind him are spoon feeding his thesis and approach to hit pieces.

3) They execute the approach to "investigation research". Whatever doesn't turn up, they just brainstorm with the hedge fund smart guys, and stretch the innuendo, stretch the evidence, or whatever is the best shot at a big impact hit piece.

4) The approach is tantamount to "slinging mud" at something and then waiting to see "what sticks".

They might be right in using (1) Good screening criteria for deciding what company fits the initial profile (#1), and are usually shooting bullets in the right direction with their advice from their clients as to what things may be wrong with the company in deciding in approach (#2). But where they fall short may be in whether they produce truthful or falsified representations in executing research reports (#3). Basically, it is hard to find proof unless you are an authorized forensic auditor, and therefore Muddy Waters almost never gets close enough to a company to prove anything. However, they stretch the evidence and fabricate evidence and take verbal opinions from people they talk to and use that to "throw mud" (#4). And even if much of the mud doesn't stick, if the probability of something being amiss in the areas that they focused on (such as bus count with installed LCDs) is pretty high, then all the collective hit pieces pressures the auditor to go through a very deep and comprehensive verification process that only an auditor can get close enough to achieve.

End of story. Sort of like the end justifies the means. I guess they are weeding out fraud, but the "throw mud until it sticks" approach is what makes retail investors think they are ALWAYS full of crap. In actuality the hedge fund clients are often quite smart in that they "smell something" and just don't have the authorization to look at the inside details to really find the truth, but sometimes the truth surfaces with enough mud slinging, enough lawsuits, and enough pressure on auditors.

Interesting.

Easy for a trader to say, Joe.

I don't watch screens day constantly, for one thing I have a day job, although I can monitor in the background while I work.

Second, I have no clue as to if I buy something at 10am if I am going to make or lose money by market close so I can go to cash before 4:00pm the same day, which is what many traders do, right?

Third, if I did do that, I would be trading off of charts rather than off of company fundamentals. To me a company's stock's behavior over a 6.5 hour timeframe from 9:30am to 4:00pm is pretty much a crapshoot guessing game - how the heck do I know if I will make money buying and selling the same equity over just one day.

But if you can, good luck to you. It seems to require a different type of skill than picking an undervalued company, watching for a good price to get in with the least downside compared to the last few months trading range, then sit on the investment until I believe either (1) the investing thesis goes sour and I should sell; (2) Mr. Market tells me that macrosentiment is going sour and I should sell now or very soon; or (3) the stock rises fast and far making the probability of reversion to the mean more and more imminent, so I should sell. Conversely, I will add more if (1) the stock has a fundamentals change based on earnings or acquisitions or (2) market sentiment for that sector or industry suddenly becomes much more positive.

Joe, thanks for the advice, but a day trader I'm not. GLTA.

Now Joe, could you please use all your detective and smooth talking phone skills to give me and all CCME investors some advice number 2 - what does Ping Luo tell us we should do when CCME resumes trading? Just how thoroughly does she think she "verified" 50 percent of customer revenues? And do you think Global Hunter is going to do an about face with a forthcoming "sell" recommendation?

I like your style, Joe, but since you were part of the information feed channels in the past few days to support CCME, please, please use those same crafted skills to try and dig up some damage control stratgies for all of us. Thanks in advance.

Respectfully.

WCTBills: Don't blame the messenger, but who is he?

WCTBills - I believe I read he is a professional with an advanced degree who is just an investor in CCME, probably big allocation and obviously one of a few investors who actually have the time, inclination, and language skills to check things out on the ground.

Any further information - WCT should stop by and give a little info on himself and how/why he has come to doing extensive on-the-ground travel to research CCME.

Second, his verifications were very basic - he started out with looking at just Muddy Waters uploads to their website and claims, then tried to refute the obvious stuff that someone there in person could do. That was a great job for what it's worth.

WCT has not tried to replicate the work of a team of auditors, nor has he represented himself as such. Therefore, he cannot see payments from customers, bank balances, customer contracts, accounts receivable, nor can one single man count all 20,000+ buses himself.

For those tasks we have auditors, and since it is a large part of CCME's authenticity to verify those things, investors are anxiously awaiting all audit findings. The new auditor will have to not only pick up where the old auditor left off, but may also have to do deeper levels of verification, we don't know for sure what will be required because we don't know what inabilities to rely on management specifically led Deloitte to state they resigned.

So we can't blame this on WCT, nor can we blame it on message board posters. It is all about what the auditors can see with their eyes. Pretty good chance a lot of stuff with CCME is real because of the Global Hunter reports - Global Hunter is not a fly-by-night scam artist/pumper-dumper, and supposedly they have verified a few pretty critical aspects of the business.

All we can do is wait and see, just like happened with NEP last summer. I was not in the NEP halt by design - I got out months before the NEP halt. But with this CCME halt I got caught offguard - no advance notice that financials could not be relied upon, just an abrupt trading halt - it caught everyone at the same time, even shorts for that matter.

GLTA

How many people went through this drama tonight:

"Yes, dear, I didn't listen to you when I put too much into one company". "Yes, dear, i know it was greedy of me". "Yes, dear I won't trade stocks at work anymore because it could distract me from my job" and "Yes, dear I should have come home earlier instead of being on E*Trade and message boards at work.".

Funny how when you make lots of money the wives automatically expect you to share the rewards equally with them, but when you lose money in the market they lay all the blame squarely back on your shoulders.

Yep, fun day. A LOT easier losing money in the markets compared to coming home and being honest about what happened.

One day at a time.

Big, big percentage invested in CCME. Puts my investment horizon 10 to 12 years farther out, maybe more.

It remains to be seen is it smarter to sell at the open, dead cat bounce, or wait for the restatements.

LPH acquisition 500M to 925M revenue: 100K mt storage.

"partnership" with PRC

Picked up more shares today. PEG is laid in stone now

LOL ... you dry powder people are having a field day, aren't you.

I'll have to listen better the next time someone tells me to save some dry powder for the next crisis, LOL.