AS a citizen of Alabama, I feel very violated by Senator Shelby's lack of attention concerning my investments.
Is there any way I can hold him responsible, outside of not supporting him in the next election?
I feel he has failed me as a Congressmen, and I am sick of his political bias concerning his duties.
I’m not sure how you can hold him responsible, but if you are a citizen of Alabama, I’d suggest you craft your dissatisfaction into a letter and send it as a topic to every talk radio station in the state. Exposure is how to deal with this. Crooks can only misbehave under the cover of darkness. A president learned that. A Congressman has way less juice than a president. Exposure is the key. Get people talking. If you believe your rep is a lying, cheating “gangster,” make it your mission to bring him down in the next election. There’s nothing like one committed guy. Take my word for that.
How can we make the public better aware of the problem of naked short selling?
Talk Radio. That’s the most accessible. A book is the next. The web is the third.
I started writing Symphony of Greed because there is no book a guy can carry onto a 4 hour flight, and walk off understanding how he is being fleeced and what it all means. I think that knowledge is power, and I believe that a good book that explained how the market works, what its history is, what the rules say should happen, and what actually goes on, would get the average smart business guy furious and scared, and that would start a mass movement to fix the problem.
As long as it all seems obscure and mysterious, most will just throw it in with death and taxes – something they can’t do anything about. That apathy, borne of ignorance, is what the bad guys count on. And they are largely right. It’s a good bet. Most don’t really care until they lose a bunch due to this issue – and by then, it’s too late for them, as they are in survival mode. I’m an exception. Byrne is another. We need the average investor to have it explained in nuts and bolts terms, and have them follow the story and why they should care. No such volume exists. That’s why I wrote what I did. Unfortunately, I need to finish it, and I need to find a publishing company with the balls to print it. That’s not as easy as it sounds, even with guaranteed buyers out there. Every movement needs a manifesto. This one lacks one. More’s the pity.
Explain the loophole of the I.O.U system in the stock market, that Patrick Byrne referred to in his recent radio interview.
How is it possible for stock to be sold continuously when it does not exist?
See my summary at the intro.
Trades are put through, security entitlements are put into investor accounts representing shares of stock, and then the stock never shows up. By then the broker has gotten his commission, so he doesn’t want to break the trade, so he just acts like everything is great. You have no idea, because you think that the 2000 shares of IBM your statement tells you is in your account is actually in your account. IF you question the broker, he will roll his eyes, and point out you can sell it whenever you wish, so of course it’s there. It’s a confidence game. When you demand your certificates and then he starts stammering and stalling, that’s when the music stops and there are no chairs.
Just rinse and repeat every day. Ma and Pa Kettle won’t ever have the smarts or the juice to figure it out, and we can always afford more and better lawyers, so shame on them for being degenerate gamblers. More for us. They can eat dog food.
The SEC rarely does anything, and when they do, it’s to fine fractions of pennies on the dollar, so brokers would be crazy not to fleece you this way. The system rewards it.
How do reporters and journalists get away with some of their antics? Do their bosses have someone in their pockets?
If I danced around on national television like a gerbil on crack, being disrespectful and belligerent, while antagonizing a Federal agency by doing everything but taking a dump on a government issued subpoena, would I be out of solitary confinement yet?
If I called Chris Cox into the "House of Pain", asking him to bring his pooper scooper and clean up my mess, would he be so quick to act upon my request, considering I am the average "Jane"?
Again, the parasites that prey on America are so emboldened by their stranglehold over the SEC and the Beltway no misbehavior is too outrageous or outsized. Who’s going to do anything about it? What actual action has taken place? Look at Reg SHO as an example. Why grandfather delivery failures, where brokers refused to deliver shares they were paid for? What possible legitimate justification is there for favoring the interests of Wall Street over the investors who paid and were cheated? There isn’t any. Section 36 of the 1934 Act only allows an exception if it safeguards the public interest and is necessary to protect investors.
Anyone want to explain to me how grandfathering Wall Street’s refusal to deliver what investors paid for protects investors? It’s a cheap sham. You should be disgusted. I am.
People just can’t believe that the system is actually as bad as it is. Their hopes say that it can’t be. They see evidence of it everywhere, but their worldview demands that it not be so. I don’t play that. I am opinionated, and fairly smart, and I can see what is going on. A group of rich white men have co-opted the nation’s financial system, and are running it as a kelptocracy. These men are not just Americans – in fact, the quaint notion of nationalism is one that serves to obfuscate that this is a power/class issue, not a national issue. They are a power structure that has a long experience with ripping off investors – for at least a hundred years. The latest generation has just fine tuned it. The Internet makes it simpler for us to share info and see the actual outline of the beast as it is, rather than as it presents itself via the media. I think that is why over the last few years so much info has presented itself, that forces us to confront ugly reality for what it is, rather than for what we would like it to be.
For all Cox’s posturing, the subpoenas were shut down, and any investigation kicked in the throat by the SEC political appointees. That is just one concrete example where Aguirre’s charges gain weight. We saw, live and real time, as a real, active investigation into the miscreants we all know have been part of the problem was shut down. There is no way to misinterpret that. Lots of tough talk, and complete inaction. It is BS. We all know it. And it is what we have as a regulator – the conceit that they are protecting us, and not the bad guys, is a hollow one, and provably untrue. The SEC should be abolished, and a special prosecutor from the DOJ appointed to hunt down the vermin. It will likely never happen, as the miscreants own the political appointees who decide that.
Long answer, but the short answer is that miscreants will wipe their bottom with the symbols of authority from the SEC, because that agency is understood by them to have no teeth. End of story.
How does Patrick feel about his critics? Does it bother him when he reads negative articles about himself?
Parick Byrne is one of the most secure individuals I’ve ever met. My theory is that he was born that way, and that years of excelling in highly competitive sports solidified that character trait. Then, battling life-threatening cancer for three rounds likely eliminated any concern over the opinions of others. Here’s my take. Unless someone is going to take your bullet to the head, what the F do you care what they think about you? He and I are somewhat kindred in that regard. I believe that things happen for a reason, and our intersection and involvement in this battle seems a bit too fortuitous to be random chance. If I hadn’t met him, I would have had to invent him as a creature of fiction, although nobody would buy a wealthy academic CEO putting it all on the line for what is right. They’d redline it in any script as being hackneyed and implausible.
I can’t speak for him. I don’t know if it bugs him, but I suspect not – he actually seems to revel in the pathetic swats his critics deliver. Like, is that all you got? You hit like a girl. What a wuss. And he means it. The miscreants likely can’t imagine someone not so beholden to their own image that they would endure mockery of the sort he’s taken. That’s one of their big mistakes. That, and not imagining equally/brighter and committed adversaries engaging them because it is the right thing rather than the lucrative thing.
Here’s my favorite pet thought: If they are so smart, then why do they have to cheat? At the end of the day we are dealing with cowards who believe that their accumulated wealth will shield them from everything. Never forget that. Cowards. Cheaters. Thieves. Well educated, but incapable of building things; more suited to destruction. These are cerebrally-driven predators, pencil-necked geeks accustomed to insulating themselves from the repercussions of their actions with phalanxes of attorneys – and kidding themselves that they aren’t making billions from their anemic superiority in being willing to cheat and abuse rather than from any ability to create.
Don’t get me wrong – I’d love to have their money. That isn’t the point. A rich scumbag is still a scumbag. Take away the money, and you have a scumbag. A class act is a class act with or without the money. Cheating retirees and widows is an activity for scumbags.
Put them in cuffs and they will mewl like kitties. They always do. Patrick has scraped better than their best off his shoe. I suspect he sleeps well.
We have witnessed several companies on the otcbb and pink sheet markets call for their shareholders to request certificates in order to move forward with either a dividend ,or some other company incentive or distribution.
It appears as if the brokerages are either dragging their feet, or having difficulty with many of these requests.
In turn, the shareholders who did obtain certificates wait endlessly on the brokerages who will not comply with the requests of the remaining shareholders.
Why does the SEC fail to step in and force compliance on the part of the brokerages?
How is it possible for any company to comply with SOX or Commission guidelines when the DTCC refuses to open their books and disclose the amount of shares available in the market?
Isn't this a typical double-edged sword?
It's as if the SEC is saying:
"If you don't comply with the guidelines, we'll get you."
"If you do comply with guidelines and the accounting is not up to par, or we find one error in your report, when it suits our need to meticulously research your filing, we'll get you."
I think I already answered why the SEC does nothing in terms of forcing brokers to comply with the 1934 Act and many of its own rules. I also think I addressed the double standards and why they exist. They are bullies focused on tackling company fraud and exonerating their future employers on Wall Street. I speak in the general here – there are no doubt many honest hard working folks at the SEC who are trying to make a difference. But my take is that the upper echelon knows its role in the game, and doesn’t rock the boat for the industry it is supposed to be policing.
To test this, one only has to look at all the scandals and who drove them – mutual fund frontrunning was ignored by the SEC until the states took it on, analyst scandal was the states, specialist scandal was broken by the media. The SEC knew about and had received complaints about some of these, and did nothing. That should tell you all you need to know. Is it unfair? Yes. Does it reek? Yes.
Do you believe it's possible in this present climate, that if a BOD's declare they are going to do a reverse split but will not increase their order share again without shareholder approval and they follow it up with regular, positive PR's re valuation, do you think it could work in CMKX's favour? (given that they trade again some day)
Depends upon whether the Street wants to comply with the rules. The SEC has demonstrated in the case of Global Links that you can reduce the market cap of the company by 99.7% if you are Wall Street, and that as of a year and a half later, it will do nothing.
Patrick did a good job in his radio interview talking about how many investors do not understand why their stocks flatline for no apparent reason. Can you review this with us? How has it harmed companies like Krispy Kreme?
Be happy to review it with you...
Hedge funds/manipulators take a large short position, and then launch a campaign to drop the share price by at least 50% or more. Once they have achieved their goal, most laymen think that they cover and move on. Not so. It is far easier to maintain a depression once the stock is battered by continuing to sell naked shares to break the back of any rally. We see that in many of the SHO list stocks – TASR, NFI, OSTK, KKD, etc. etc. etc.
The system allows those who sold all the naked shares to have the difference between what they sold the shares for, and what the mark to market price is now, to use however they like. So if they sold OSTK naked at $55, and it is now at $20, they can use that $35 as their own cash (actually they have to keep a bit on the table as collateral, but that is broadly waived or modified by the banks and brokers and there are countless ways around it). So why bother covering, creating a taxable event, when you can just keep the stock buried forever? Add in the fact that the large prime brokers are trading right alongside the big hedge funds for their proprietary house accounts, taking many of the same bets, and you begin to see how it is a systemic issue, and not just a few hedge funds. And then consider all the leverage the banks for these brokers give the hedge funds, and it is an entire system that has powerful financial reasons to see that once a company is targeted and depressed, they stay depressed.
Krispy Kreme had non-trivial accounting issues. So it is a bad company to use, as critics will simply say, “The stock fell and stayed down because management were a bunch of crooks.” I always use NFI – NovaStar Financial, a highly profitable company that has been on the SHO list since the beginning, with one 13 day exception. They make money hand over fist, pay out $5.60 per year in dividend and have for years. Have had record quarters even in the difficult interest rate environment over the last couple years, and are currently trading below where they were two years ago when they were earning almost half as much. There is no logical reason why they are the lowest valued MREIT in the industry. They should yield in the 8%- 9% range – they have carried-forward one year of Taxable Income, guaranteeing 2007’s dividend already. The only company that has done so. And yet they are chronically depressed.
This is an example where some hedge funds targeted a sub-prime mortgage originator right before the largest housing boom in American history, and got in so deep they can’t buy their way out. But they also can’t kill the company as it is highly profitable. So they keep selling more and more naked shares to kill any rallies, and are stuck paying out the dividend on an increasing number of shares. The SEC could easily stop this, and they choose not to. Some shareholders filed a massive suit against the prime brokers for stock manipulation, and I think this will blow their little collusive game wide open when it gets to discovery. Particularly offensive about tackling NFI is that it is mostly held by older folks looking for fixed income – so these scumbags are destroying retirees in their golden years, so that they can get a new jet. It infuriates me, and is one of the main reasons I chose to fight this fight.
So short summary is that once a company has been slammed, the brokers have as much or more than the hedge funds if the stock climbs, so it becomes a Wall Street pile-on party to illegally manipulate the share price and keep it in the toilet.
For those who have not read your blogs from the beginning, tell us a little about the characters you talk about. Who are they? Why have they taken such a profound interest in this?
Where do I start?
You mean the hedge funds? Rocker Partners is widely considered to be one of the prime movers in NFI, so that is why they appear on my radar – coincidentally, they are also thought to be the prime mover is OSTK, KKD, NFLX, ALD, TASR, and a host of other SHO list victims. Boy, wouldn’t it be something if it was so obvious the SEC could figure this one out? But it’s not happening. SAC is Steve Cohen’s hedge fund, which is being sued by FFH and Biovail for the same sorts of tactics allegedly employed by Rocker – in fact, it is conceivable that a group of these funds form a loosely affiliated cartel that targets plays, and works in synch. Sort of like Milken did with Boesky and many of his other network of manipulators back in the 80’s – in fact, almost exactly like they did. Isn’t it fun how that was the modus operandi in the 80’s, but the press acts like it is wild-eyed crazy talk just a few years later?
There’s about a dozen journalists who appear beholden to these funds, as well as to the DTCC and the Wall Street apparatus, who routinely appear in the organized bashing of the targeted companies. Greenberg comes up a lot. Cramer does too. Eisinger, Remond, Alpert, the list goes on. Most got subpoenas from the SEC, which Cox couldn’t squash fast enough. That speaks for itself.
There are research firms who also play in this. Gradient is being sued by Biovail and OSTK for the same sort of shenanigans.
There are captive propaganda disseminators who work the blogsphere – Jeff Mathews and Gary Weiss are two of the more onerous – who act as apologists for the naked short selling scumbags, and attack anyone who takes them on. Both have been thoroughly discredited by now, so don’t have much clout, but they continue to do their bit in a very workmanlike fashion.
Milberg Weiss sued virtually all the targeted companies mentioned – I think OSTK is the only one they didn’t, and their prosecution for racketeering and fraud and a host of other offenses may have something to do with the timing issue with suing OSTK.
Is there anyway that CMKX, Overstock, and other company's that have been NSS'ed combine forces to fight this SCUM.
I think that by supporting activist organizations like NCANS you are doing so. By spreading the word about TheSanityCheck site you are increasing awareness of the issue. Increasing awareness is the number one thing you can do – we have more than enough folks who know what is going on - Patch, Faulk, Burrell, DeCosta, Trimbath, Shapiro, Byrne, myself; the problem is that the average person doesn’t know, or doesn’t care because they don’t think it affects them. They’re wrong. It affects everyone. If we allow a small sliver of NY to use the rest of the country as a Kleenex, then we have abdicated our financial future. Ditto for the small slice of the Beltway they control. These people own the system. They are the ones that are leaching the savings of America via interstitial exemptions. It has to have a draining effect on the country, and on the companies we are depending upon to act as the engine of our future prosperity.
Our ability to get the word out and communicate how the nation is being fleeced is the antidote. Eventually, politicians get shamed into doing their job, as the rank and file understand they are being screwed by a system the politicians allow to stay crooked, and boot the bums from office. That is our leverage. Our ability to mobilize outrage, and to boot those who believe that our country is composed of dimwits and sheep.