Update: Alessio Rastani: "Leading Trader" Claims You Can Make Money in Down Market Now

Update February 3, 2012: Late last September, I reported (below) on the publicity that major European media outlets (such as the BBC) were giving a fellow named Alessio Rastani who was predicting the collapse of stock prices and the Euro due to the sovereign debt crisis. I warned you that Rastani was a hack and a charlatan and that these media outlets should be ashamed of themselves for giving this man any air time.

Turns out his predictions almost perfectly timed the recent bottom in stock prices! Since then, global stock prices have soared about 20 percent in just over 4 months. Too bad for anyone who followed his advice and hit the eject button on their stock holdings.

Wow - what passes for journalism these days is simply stunning!

The BBC bills itself as the "largest broadcasting organisation in the world" and boasts that, "Its mission is to enrich people's lives with programmes that inform, educate and entertain."

Well, I think they recently fell a wee bit short of that lofty goal!

I was stunned to watch the recent "expert" they interviewed - Alessio Rastani - regarding the European sovereign debt crisis and state of the financial markets. In the interview (below), Rastani proclaims that he's very confident that no rescue plan will work in Europe (because Goldman Sachs and not governments control everything) and that the Euro will crash. He also says that the stock market is "finished" and "toast" because the big/smart money traders (he cites them as hedge funds) say so. Investors who don't take action, he ominously warns, will see their money vanish in the next 12 months.

It's pretty clear watching this video that Rastani is nothing more than the latest in a long line of hucksters trying to dupe the public into believing that he can predict the next crisis and that he can teach them how to profit from it.

The BBC clearly didn't do much homework checking out Rastani. In less than half an hour, I could easily discern that he has an unremarkable background at best (more on that below). There are hundreds of thousands of folks in the New York metro area alone who work in the financial services industry who know more and have more informed opinions than Rastani.

Lazy media producers who invite hacks and charlatans onto what should be important programs are unfortunately not a new thing. And, the unsuspecting public pays the price.

"I'm an Attention Seeker Not a Trader"

In a subsequent interview on the U.K.-based Telegraph, Rastani confessed that he's a publicity hound (and I would add an accomplished one since he duped the BBC). Here are the excerpts from their article:

"The soundbites won Mr Rastani instant fame. He became a viral hit and was trending on Twitter. BBC business editor Robert Peston was among the fans. "A must watch if you want to understand the euro crisis and how markets work," he told his army of 82,000 followers on Twitter on Tuesday.

The interview contained such gems as "Governments don't rule the world, Goldman Sachs rules the world [and] Goldman Sachs does not care about the rescue package."

But on Tuesday night the BBC was left facing questions about just how qualified Mr Rastani is to speak about the markets.

In the interview Mr Rastani described himself as an independent trader. Elsewhere he claims he's an "investment speaker". Instead of operating from a plush office in Canary Wharf. Mr Rastani works and lives with his partner Anita Eader in a £200,000 [$310,000] semi [townhouse] in Bexleyheath, south London. The house, complete with a mortgage from Royal Bank of Scotland, belongs to her not him.

He is a business owner, a 99pc shareholder in public speaking venture Santoro Projects. Its most recent accounts show cash in the bank of £985. After four years trading net assets are £10,048 - in the red.

How a man who has never been authorised by the Financial Services Authority and has no discernible history working for a City institution ended up being interviewed by the BBC remains a mystery.

The incongruity led to some commentators speculating Mr Rastani was a professional hoaxer. The BBC denied the allegation: "We've carried out detailed investigations and can't find any evidence to suggest that the interview with Alessio Rastani was a hoax."

However, the BBC declined to comment on what checks, if any, it had done prior to the interview.

Mr Rastani was a little more forthcoming.

"They approached me," he told The Telegraph. "I'm an attention seeker. That is the main reason I speak. That is the reason I agreed to go on the BBC. Trading is a like a hobby. It is not a business. I am a talker. I talk a lot. I love the whole idea of public speaking."

So he's more of a talker than a trader. A man who doesn't own the house he lives in, but can sum up the financial crisis in just three minutes..."

Trader or Prankster?

Forbes columnist Emily Lambert wonders if Rastani is the same fellow who fooled the BBC into thinking he was actually a Dow Chemical spokesperson taking responsibility for the Bhopal disaster.

While there is some resemblance, it is even more amazing that the BBC producers who put this guy on the air were fooled into thinking that this guy is actually a Dow Chemical spokesperson. A minute into the interview, it should have been clear that the guy is a fraud!