Interesting article about short seller counterfeiting:
Short Seller Counterfeiting Alive and Thriving After Bulletin Board Genocide.
Friday, October 5, 2012
People observing the wholesale slaughter of the Bulletin Board's markets might incorrectly conclude that the short sellers had achieved their objective of destroying all of the companies listed there.
They are not only wrong, but wrong in a major way. The professional short seller manipulators are now attacking the OTC markets, lower priced NYSE and such stocks, and yet more. It has been so profitable for them, they are now taking their short selling expertise not only to new stock in new markets, but to many other places. Today, their target rich environment includes not only stocks, but bonds, currencies, commodities, futures, options, physicals, forwards, Treasuries and more, including private assets.
Having made Billions on the genocide conducted against the NASD/FINRA "Market of the Future" (per their propaganda in 1998), they now seek to take control of all markets and assets. With the not so tacit endorsement of the SEC and FINRA, brokers and hedge funds domestically and internationally are seeking the right to sell everything, whether they ever actually own it or not.
I have spoken with very sophisticated friends, and even they don't understand that the controllers of custody, clearance and settlement have found a great way to collect a continuing river of financial baksheesh providing huge amounts of cash flow they can divert to the health of their personal pocket books without actually doing anything. A "Locate" of a security that might be actually delivered if a buyer demanded it, has been supplanted by an accounting book entry representing such an asset, whether of not it exists. The numbers accounted for by issuers in their record books as legally issued securities now has no meaning.
The capital formation process for equity and debt issuers is decimated. It won't be re-invented in our lifetime unless a man like Romney, who has actual experience with profiting from stocks being fairly priced, puts a stop to the grotesque manipulations now extant. I have never known a private equity investor who wanted his investments' shares and debts to be counterfeited wholesale.
Many naively hoped that having destroyed the Bulletin Board, the pigs would be satiated. The facts are just the opposite. Wasn't it enough that no type of funding was left from institutional sources that wasn't a PIPE format? Were there ever any PIPES deals that were not shorted, the vast majority before they were even offered, much less closed? Reports on PIPES reflect this crisis. Rodman was one of the biggest PIPES players, but they stopped doing these deals with minor exceptions many months ago.
So many of these things have been said before by many, it now seems that perpetual optimism over-rides common sense. My last point is of the uselessness of Reg T. It reportedly bars shorting any security under $5, or accepting any order to buy or sell a security under $1. I can't remember this rule ever being enforced in the last 20 years. Stocks owned in cash accounts were never to be loaned. Forget that today.
The NYSE and other senior markets had attacks on their stocks, but they were limited by the Exchange's rules, now a thing of the past. Even the NYSE is not allowed to protect its own listed companies. Everyone cheered when the SEC and FINRA demanded 3 day settlement with an exception for 10 delivery. Hoorah! So what happens now? Thirteen day settlement if at all, and literally oceans of multi-month and year fails to deliver that overwhelm the supply sides of all securities.
Until someone gets thrown in real jail for life, and I am not talking about Madoff's prison retreat, Butner, then nothing will change.
DOJ has fallen on its ass for these scum. Not a single banker has been indicted for the abuses of mortgage backed securities, or banking margin requirements. If they ever are, they settle for some meaningless punishment, with no jail time. Recently, David Kotz said the SEC might never have caught Madoff had he not turned himself in. And Sir Allen Stanford's Chief Compliance Office was a protege of SEC Chair Mary Schapiro, the former head of the Dallas NASD office.
Enough said. If you are getting "handled", SPEAK UP. Too few have.
Posted by Bud Burrell at 1:13 PM
