An Overview of Deep Capture
My argument, which I have been making publicly since 2005, has been widely misreported. Therefore I am stating it here, in Deep Capture, as nine straightforward claims that will be difficult to misunderstand or misconstrue. I have grouped these claims so as to describe two Perfect Storms that are colliding over Wall Street, and the result, a third, a Mega-Storm, unlike anything in living memory.
Chapters 1-3: The First Perfect Storm - The Setting
1. Over the last twenty years Wall Street has come to be dominated by a group of players who first pushed the laws to their limits, then openly flouted them until they became blurred beyond the possibility of enforcement.
2. Over the last fifteen years the standards of professional journalism have been eroded by a group of reporters who have tried to appear as players, but have become pawns. We have reached a point where a significant fraction of the financial press, especially journalists on the hedge fund beat, have become the shills of a handful of hedge funds.
3. The Securities & Exchange Commission, regulator of our nation’s capital markets, has been captured by financial elites to the point that it favors Wall Street over Main Street.
Chapters 4-7: The Second Perfect Storm - The Crime and Its Effects
4. A crime is routinely occurring in our capital markets. Small loopholes created to provide “fault tolerance” in our nation’s stock settlement system are being exploited by Wall Street brokerages and their hedge fund clients to steal billions of dollars. This crime has created side-effects for the rest of our economy.
5. One side effect of this crime is that corporate governance in America has been shattered.
6. Another side effect of this crime is that many companies (often innovative tech and biotech companies) have been damaged or destroyed, while the Americans who invested in them were robbed, generally with no awareness on their part beyond the loss of their savings in the stockmarket.
7. A third side effect of this crime is that it has created in our country’s financial system a crack so deep it could trigger a systemic collapse.
Chapters 8 and 9: The Mega-Storm
8. The financial media are incapable of bringing a critical mindset to this issue because of their too-cozy relationship with Wall Street (several financial journalists actually seem to be engaged in blue-smoke-and-mirror attempts to obfuscate issues on behalf of the financial elites who turn up wherever this crime is occurring). As a result, the crack in our financial system has reached catastrophic proportions.
9. Within “social media” (blogs, message boards, and wikis) evidence for the preceding points has been pieced together, but there is a campaign to hijack the social media discourse, organized by the same people who are profiting from the crime.
To many, the preceding will appear a bald and unconvincing tale, too fantastic for even the loopiest Hollywood thriller. When I first began discussing these claims, the New York Post ran a photo-shopped picture of me with a flying saucer coming out of my head. For two years the profession of financial journalism has demonstrated that in its view there are, in fact, two subjects beyond critical examination: Wall Street, and the profession of financial journalism.
In the chapters of Deep Capture that follow I will examine evidence that has emerged over the last two years and the degree to which it confirms or falsifies these claims.
I thank you for the courtesy of your visit and the gift of your attention.
Respectfully,
Patrick M. Byrne, Ph.D.
Posted in Introduction: An Overview of Deep Capture |
December 6th, 2007 at 11:56 pm
do you know Steve Tryon, from Las Cruces, NM????
January 5th, 2008 at 1:27 pm
I have been a happy customer of OVERSTOCK.com for a couple years.I admire your willingness to be open about your political views. I just happened to read about your tiff with FOX and support for Ron Paul.
FOX news is a joke. But I heard Ron Paul interviewed by Bill Moyers and was very impressed. I found myself agreeing with him. However, I understand he is against Medicare and Medicaid. I have been an advocate for health care reform for a long time and believe we need to do something more like the Europeon counries have done.
January 5th, 2008 at 3:16 pm
Hi Patrick,
Thanks for your kind words about Congressman Paul. I must admit that I found it amusing you donated to McCain, author and co-sponser of McCain-Feingold, the very law you mentioned disdainfully, that limits the amount you can contribute to a political campaign.
I also thought you might like to know that your name comes up quite a bit in discussions about American financial reforms among libertarianan minded Republicans like myself, so it was indeed pleasing to see that you were aware of Congressman Paul. His supporters were aware of you vs Wall Street long before this Fox debacle.
To the poster above me, I would only point out that one of the main reasons that Europe can afford public health care is that we provide the majority of their military spending.
Our health care costs began climbing when the government began pumping money into it with the introduction of medicare and medicaid programs, and allowing the insurance companies. Allowing insurance premiums to be tax deductible sent medical costs sky rocketing. That will only increase when the government takes over all together.
Economics 101 says that controlled proces create shortages. Look at Japan’s public health system to see where EUrope’s plan is leading.
We’re Americans! We’re supposed to be proud, independent, and *not* reliant on some nanny state government beaucratic system to solve our problems. That is the American spirit that catapaulted us to the front of the globe in only 200 years, and the introduction of socialism is dragging us down into the muck of mediocrity.
Socialism is European. We came here to avoid that nonsense. If those plans were any good, participation woudn’t need to be mandatory.
Socialized medicine limits freedom of choice, and feeds the big corporate pharmaceutical lobby.
Fox News pundits also said that the government needs to start deciding how log people shoud=ld be allowed to live, because it simply costs too much to keep old people alive.
Scary stuff, giving those decisions to Washington.
January 6th, 2008 at 2:03 am
Sylvia Hampton,
At least he isn’t pandering to the people or full of rhetoric.
Dr. Paul votes for and openly speaks for what he has found to be true from his years of study and experience.
Thats real integrity. A desperately needed attribute in today’s government.
January 10th, 2008 at 10:16 am
[...] Curious? Read more here. [...]
January 12th, 2008 at 6:01 pm
Di Castle,
Yes, I know Steve from New Mexico. I work across the desk from him.
Patrick
January 27th, 2008 at 8:44 pm
Patrick,
Keep up the good fight. You are a true patriot and american hero. From kindling
and embers we are witnessing the ignition of a mighty fire storm. Many honest investors are with you and supporting you in your fight to end this criminal practice of intentional falure to settle on short sales aimed at looting value from ameican companies and investors.
January 28th, 2008 at 6:36 am
Thanks Michael. I fear you are right about the storm.
Spread the word. Help the good guys.
Patrick
January 28th, 2008 at 1:19 pm
Hi all,
I am new to this site but not new to this conversation. I grew up with a father who believed in what Patrick states above. I am posting now because i believe another company, AAPL has been targeted with the same game as OSTK, NFI, to name a few. I thought if anyone could convince Steve Jobs about what is going on and how it is affecting his stock Patrick and friends just might…look to GS and the reporter Bernstien …just thought Patrick might want another deep pocket beside him……Good luck all…personally i think we need another revolution for us to regain our country back,..hoping that it is a peaceful one of ideas and of our politicians doing the right thing…and yes i support Ron Paul
January 29th, 2008 at 9:11 am
Re: Guy from Kiplinger talking Apple on CNBC
Did you notice he said something like…..
WS knows what is going on, but fundamentally he can’t understand why AAPL went down…
….AAPL was intentionally taken down.
January 29th, 2008 at 11:55 am
Summer,
There are definitely signs that these guys, who have perfected their business model on lower-cap companies, are zooming in on Apple.
Patrick
January 29th, 2008 at 2:13 pm
Patrick,
I think what you’re doing is admirable. It’s obvious you’ve studied the subject thoroughly. After reading the first chapter, admired the amount of supporting research, but it seems like this is whole subject is self evident. The various self-interested factions that drive our economic and legal systems will, of course, do whatever is in their power to protect their own interests. This is why our government works. I’m sure you’ve read the Federalist Papers. This debate has raged on since Aristotle, at least.
You said you’d have contributed more to Dr. Paul’s campaign if you hadn’t been restricted by MF. That makes a good case in point. We’re all interested in our own interests. Corporations are entities created for the sole purpose of furthering the interests of a faction. Of course, factions will sometimes take over governing bodies. Of course WS has significant control over the SEC. WS is the weather vane for our economy and the WS elite are the ruling class who are, by far, the most influential class in determining who will make laws.
Our systems works because of the various forces applied by the interested factions. It seems to me that a PAC would be more effective in fighting SEC corruption than a lengthy treatise. Once such power is applied, you’ll be seen as a man of action instead of simply a very fervent thinker.
MF does not limit how much money you can pour into a PAC.
Best regards,
Joshua McClure
January 31st, 2008 at 11:51 pm
RE post #3 Angela. Maybe the millions of people without any health care would be happy to have “socialized medicine” rather than none. Unless you have experienced it you are not qualified to critize it. I would have been dead and buried back in 1963 without it.America not only does not have “the best” healthcare system in the world, it does not have a healthcare system. What it has are very high insurance premiums, plus insurance companies telling doctors what services a patient can have. Doctors know what the patients need , not insurance companies,
I would like to say to Patrick that I admire you greatly for the stand you take and also to congratulate you for not being afraid to speak your mind. We need lots more people like you.
February 3rd, 2008 at 2:01 pm
Josh,
Glad you think it is self-evident. It seems that way to me, too. But you would be amazed how hard it is to get some people (especially journalists) to see such self-evident things.
As for the rest: great minds think alike. Just think of this blog as just laying the groundwork for something bigger.
Patrick
February 8th, 2008 at 5:17 am
Re Health Care
Guys, take the time to have a look at the system employed in Australia. All systems have their problems, however this one works 95% of the time. Should you be interested I would be happy to give some detail.
Regards,
Graham
From Australia
February 8th, 2008 at 9:16 am
I am a Canadian. We have a health care system with problems. However the life expectancy for an average Canadian is more than five years longer than for an American.
Find a copy of Roger Moore’s movie titled ” Sicko”. From my perspective, it should prompt some hard questions.
February 9th, 2008 at 1:17 am
Good God! I feel that I’ve stumbled into a bastion of sanity, intelligence, and logic here!
What’s wrong, I’m wondering? Things like this aren’t supposed to exist.
February 9th, 2008 at 3:40 am
Roger that to what Graham said about the Aussie medical system. I’m an American hospital nurse who emigrated Down Under, partly for political reasons, and partly because I saw the financial disaster looming and wanted to get out with my money intact. I’ve worked in American and Australian hospitals, and the ones down here are as good i\as in the U.S. It’s just that here, every citizen can get in. But this isn’t a blog about healthcare reform.
In my previous career, I was a newspaper reporter for 10 years. Mostly smaller weeklies and dailies, but I saw how the biz worked. When you consider how financial reporters seem in cahoots with the institutions they cover, remember this — the idea of a “liberal media” is a myth. Newspapers, magazines and TV networks are big businesses. Big businesses are inherently conservative. Especially in the financial media. You don’t see any big-circulation socialist publications, now do you?
There might be some left-leaning reporters in the trenches at some publications like the New Yorker. But in the Wall Street Journal, Forbes, CNBC, you’re going to get people who swim in the financial waters. If they were leftists, they wouldn’t be in the business press. They LIKE the field they cover. And their natural inclination is going to be to suck up to it. No doubt they dream they’ll be rich players someday. You don’t get to be part of the corporate PR team with a portfolio of clips where you busted some Board of Directors’ chops.
The only honest reporters are found on the blogs. Problem is, there’s such a proliferation of them, the good advice is hard to find amidst the bad. And one person’s view of what’s happening will not be another’s. The trick is to sift out what’s good, and what’s BS.
And watch your back. Because I think the storm is about to break.
February 17th, 2008 at 3:12 pm
This is incredible, and brilliant. My issue has been with the permission given to short sellers to sell on the down tick. If you go back, you can see the dramatic increase in market volitility (and downward pressure on stock with high betas and sizeable puts) that immediately followed the SEC’s permission for such trading. Especially on low volume days, when the media (especially CNBC) has done its usual “market hysteria” number, this rule invariably pushes down high beta stock. Why was this rule change allowed? So the shorts could profit at the expense of long-term investors who want and deserve stability and the absense of market manipulation by the professional traders.
I’ve added this site to my favorites and will go to Overstock first to buy anything.
Keep it up!
(Also, if you have a complex idea you’d like to contribute, what’s the best way to make your contribution?)
February 20th, 2008 at 12:13 am
I Have connections with PA Senator Arlen Spector,. If it would be useful, I would gladly arange a meeting or a conference call, to discuss ” Deep Capture” and related issuses.
FrontLine is PBS’s news magazine which would be an excelent avenue to reach the broad public on such a complex yet important issue.
Michael Moore in Hollywood may be very inteterested in producing a movie on this topic.
March 7th, 2008 at 2:02 pm
None…
None…
March 7th, 2008 at 9:58 pm
The revolution will render meaningless this trivia. Revolutionary justice will drop the greedy guilty where they stand.
Fear not, justice will come.
March 7th, 2008 at 11:58 pm
I am greatly encouraged by your willingness, your insistence, in fact, to speak out. My late father was a retailing CEO of a large iconic America company and I am glad he is not here to witness the chicanery, greed and complete lack of moral principles that rules Wall Street. My dad was a man of honor who believed that as successful as he was, he owed just that much and more to the country that made success through hard work possible. The financial climate today would just sicken him. I have myself considered leaving this country and would do so were it not for family.
March 8th, 2008 at 10:26 pm
Hey there,
If you ever decide to join the bad guys you could offer ftd_TV’s at Overstock. Perhaps market it to Wall Street Executives? “Hey guys, it’s a TV, but without all that annoying sound and picture stuff. It doesn’t take up any space, and really warranty service is gonna be a snap! Buy one for you, grandma, the kids, a neighbor down the street! Act now for FREE delivery!”
It’s easy!
I guess step 2 is to sell options on undelivered non existent TVs.
Then sell insurance on the options. Also sell insurance to those who deliver ftd_TV’s and also sell insurance to receivers of ftd_TVs.
And once you’ve developed a market. Let everyone sell their coverage or holdings.
And then
and only then,
look for the little guys who haven’t caught on yet.
and show them that there really is no limit to how many non-existent TVs you can deliver.
Well, so long as you just write them an IOU for the ftd_TV.
Oh, and make sure you get the credit card number…
Cause somebody’s gonna want to watch something happen.
And really they should pay for it.
March 9th, 2008 at 4:02 pm
Patrick:
Thanks so much for your input and insight. You have it exactly right!!!. The capitalist sytem that relies on explotatation of resources (material and human) has not much to offer in terms of long-term sustainability. Ron Paul, and Dennis Kucinich, have the future in mind. The rest of us are screwed by the likes of H Clinton and B Obama. We will, unfortunately, realize that when it’s too late. As for McCain, who in hell wants a 100-year war?
March 10th, 2008 at 4:44 pm
Hi Patrick,
I started listening to your files about a year ago and I am glad you have informed me about this stuff. The question is, though, what do we do with our money? I have purchased a substantial amount of physical gold (as you suggested in your interview with Teri Gilbert on KFYI) but I still have some money left.
I was thinking a investing the rest in individual gold and silver mining companies and then demanding the stock certificates. (But I guess having the certificates doesn’t necessarily protect me from these guys driving down the price suddenly with naked short selling.) Do you have any thoughts on that? (Gold mining companies will appreciate to a much greater degree than physical bullion gold, I am told.)
I was also considering investing some money in several gold mutual funds, including: (a) AIM Gold & Precious Metals Fund (FGLDX), (b) GAMCO Gold Fund, Inc. (GOLDX), and (c) the Fidelity Select Gold Portfolio (FSAGX). Do you have any thoughts on these funds? Wouldn’t it be harder to drive down the price of an entire mutual fund, since it is made up of many investments? (But I can’t demand the stock certificates with a mutual fund.)
So I am trying to figure out where to put my money. It is presently sitting in a CD account and that is not a safe place because the dollar appears to be eroding very quickly and I am afraid it will go off a precipice suddenly as well. I would appreciate your input.
-Vincent
March 21st, 2008 at 9:35 pm
There is now a new SEC proposal regarding restricting and regulating naked short selling:
see:
http://cryptome.org/sec032108.htm
SECURITIES AND EXCHANGE COMMISSION
17 CFR Part 240
[Release No. 34-57511; File No. S7-08-08]
RIN 3235-AK06
“Naked” Short Selling Anti-Fraud Rule
AGENCY: Securities and Exchange Commission.
ACTION: Proposed rule.
———————————————————————–
SUMMARY: The Securities and Exchange Commission (“Commission”) is
proposing an anti-fraud rule under the Securities Exchange Act of 1934
(“Exchange Act”) to address fails to deliver securities that have
been associated with “naked” short selling. The proposed rule is
intended to highlight the liability of persons that deceive specified
persons about their intention or ability to deliver securities in time
for settlement, including persons that deceive their broker-dealer
about their locate source or ownership of shares and that fail to
deliver securities by settlement date.
DATES: Comments should be received on or before May 20, 2008.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission’s Internet comment form (http://
http://www.sec.gov/rules/proposed.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number S7-08-08 on the subject line; or
Use the Federal eRulemaking Portal (http://
http://www.regulations.gov). Follow the instructions for submitting comments.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number S7-08-08. This file number
should be included on the subject line if e-mail is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission’s
Internet Web site (http://www.sec.gov/rules/proposed.shtml).
May 10th, 2008 at 9:48 pm
Patrick, I’ve followed your battle for years. I turned a lot of people on to your “Dark Side of the Looking Glass”. As an old penny stock player and knowing how the game works, I’ve for years thought something like what you talk about has existed.
What has happened to the “Dark Side” web page? I cannot find it anymore….has it been ‘murdered’ by the PTB?
I just found this site and the “Deep Capture” site thanks to Bill Cara. Bill is one of the good guys who will push a lot of people your way which will certainly heat things up for the bad guys.
I am proud of your courage and tenacity. It is no easy [or safe] task you have undertaken. Best of luck….I’d like to join forces with you when I get a few things straightened out.
May 30th, 2008 at 10:00 pm
Hardrock,
Just go to http://www.BusinessJive.com.
Best,
Patrick
June 1st, 2008 at 8:12 pm
Dear Patrick,
Is there any way I could communicate with you directly, via email?
I would like to introduce myself, and a venture on which I have been working for about 5 years.
Respectfully,
Shea
June 24th, 2008 at 3:29 pm
Often times the omission of an action is more telling of a situation than what is said. You have publicly alleged that numerous parties have committed numerous crimes and to date not one of them has sued you for libel or slander. I think that this glaring void is more telling than anything. They should be defending their good names and suing you, but as far as I can tell are not. There is your smoking gun.
June 24th, 2008 at 9:39 pm
I called and made waves, today.
After reading your information, I got really angry.
I kept thinking about those put options on September 10, 2001. I kept thinking that these same players are running the demise of the Towers.
Follow the money, runs thru my mind.
Nobody has tried to follow that money, even yet. There is a paper trail.
So, the entire system has been drained by vampires?
That is the end of us, you realize this?
The last act of a failed government, is to loot, and the looters have already stolen the cow. It’s too late to lock the barn door.
This will make the New Orleans bubble look like child’s play. The French revolted, when there was no bread, and the investments in the company turned out to be fraudulent.
However, the French, in blind rage, murdered the King, but the finance minister Necker, was far from danger.
The finance minister is always out of the danger zone, along with the private corporate pirates.
Thank you for educating me,. I have been trying to put together the pieces in my mind, to no avail, ever since 9/11.
Peace, my friend. You are an example of what made America great, once upon a time. Let’s hope that more people will be educated, so that this practice will wither and die, with the glare of publicity.
July 4th, 2008 at 10:35 pm
Katz,
Thanks man. Anything you can do to spread Mitchell’s piece, the better.
Patrick