Jim Chanos

And again, we just don't have complete transparency as to what's going on.

And given the news in the subprime auto space of defaults, bankruptcies, rising delinquencies, the fact that Carvana seems to be sailing through it with nary a scratch stretches credulity, in my opinion.

We're still short cut on it.

This is a really odd one.

We wrote about this with another firm, my brother's firm,

in February pointing out that this company was a real kind of unique animal in the US publicly traded insurance space.

They had set themselves up as a servicing company and had the insurance, all of the insurance operations, which were massive, I think the eighth largest insurer in the US, owned by the policy holders.

But those companies have no employees, no directors, and Erie itself handles all that for a flat fee of 25% of premium.

Well, last week, a couple things happened.

A lawsuit was given a go-ahead by policyholders who said they're being raped by the high fees.

But just as ominously, the National Association of Insurance Commissioners have now taken notice and saying, gee, we're gonna set up a working group to study this because the incentives are wrong.

There's incentives for you just to book business because your revenues come off the top line.

And we point out that

The company's earnings are supposedly $12 per share, but if you actually consolidated them, as you should, in our opinion, and as they've done in the past, post-Enron, the earnings would be 40%, 50% or lower.

It's a kind of one-off accounting story that has been under the radar for a lot of people.

And it just, again, this is kind of a simple, they control these insurance companies.

And the insurance companies have very cyclical up and down earnings.

They lost a lot of money in the last quarter, for example.

But Erie has smoothed it out by this construct.

And we just think it's an accounting game.