Comments on: Washington Mutual: Price versus Failures-to-Deliver

By: Andrew J. S. Cols Ohio

Andrew J. S. Cols Ohio — Mon, 15 Nov 2010 04:06:00 +0000

If the FDIC insured these people, why would they need to withdrawal their money in the first place??? IMO, the run, if there truly was one, was one coordinated to coincides with the massive naked shorting of WAMUQ. They WERE literally under attack,…financial.

By: Bill

Bill — Wed, 26 May 2010 22:50:35 +0000

Jim. Me and you both. It seems the system is set up for the thieving ‘nakeds’ to cheat us long term investors after telling us how great the market is. They should be exposed and the law needs to be crystal as well as the penalties for this crap.

By: Jim

Jim — Sat, 01 Nov 2008 03:07:40 +0000

One easy solution that I still do not understand is why all trades (covering the shorts) do not have to be completed one the bankrupcy is announced. This is a material point that would make it dangerous to short by the MM’s. I still hold my WAMU shares. At this point, I am not even sure if I ever owned them, as no one will ever have to acoount for them.

By: AMG

AMG — Mon, 29 Sep 2008 18:18:35 +0000

House Rejects “Wall Street” Bailout . . .

In today’s new world, that makes the score:

Main Street – 1
Wall Street – 0

. . . and we’re just in the first inning.

By: PRESS JUNKIE SAYS

PRESS JUNKIE SAYS — Mon, 29 Sep 2008 10:48:29 +0000

The 2008 Bailout:

http://i.cdn.turner.com/cnn/2008/images/09/28/ayo08c04_xml.pdf

By: Loophole

Loophole — Mon, 29 Sep 2008 05:27:11 +0000

Dr. D, when the DTCC says they can’t do something, that’s because they are a holding company.

Their subsidiaries, the NSCC and DTC can definitely buy in rogues – it’s right in their filings with the BIS (google it), but they can still factually say that the DTCC can’t buy in to mislead you.

These crooks use words very precisely, so you have to pay attention and follow what shell the pea is under.

By: AMG

AMG — Mon, 29 Sep 2008 04:18:16 +0000

Patchie,

That is but one of the techniques used by Chanos and others with respect to their illegal practices of short selling. Any claims against the several potential defendants in forward looking litigation will require a matching of counterparties proving, beyond a shadow of a doubt, a conspiracy which, if illustrated correctly will meet the standards of a RICO claim. The hedge funds conspired together under the watchful eye of the prime brokers who made more money from these clients over the period in question than ever before and hopefully after.

Case law in this area goes back as far as Ross v. Bolton (1988) which involved our dear departed friend Bear Stearns. The Second Circuit, often a proponent of Wall Street found against the plaintiff in this matter. The only case I remember that trumped the standards held in Ross v. Bolton related to, again, Bear Stearns with respect to their association with A.R. Baron. They had no possible defense and settled the matter for I believe about $37 million if I remember correctly.

These are the levels that must be reached to garner a decision for those defrauded. With the underlying body of work that Deep Capture and its associated parties have unearthed, it is my opinion that a day of reckoning is on the horizon for Wall Street.

Main Street needs to take back the street but the information necessary to get the cases to court and to prosecute remains in the hands and control of the very market participants Main Street seeks to catch. They controlled the trades and control the people who are the depositories of the data as well as those who allegedly were responsible for regulating the industry. Talk about letting the wolf into the hen house, these people held the keys yet simultaneously remained blind, deaf and dumb to the harms created therein. The release of the short interest numbers from the biggest hedge funds will make the task a little easier but you can count on Wall Street participants to fight the release of any information that ties together the conspiracy that has controlled the street for years.

By: patchie

patchie — Mon, 29 Sep 2008 02:35:25 +0000

Agressive day trading short sales: short sellers such as James Chanos wil execute aggressive short sales intent on creating market chaos in a fragile market. They will execute short sales in volume and use the same locate multiple times through multiple brokers to overload the maret with sales. they can not cover the shorts sold with the locates used but never intend to either. The rapid trading moves a market and then, through program trading, close out the trades same day thus cancelling the settlement under CNS. The fraud is that the same share located is used multiple times through the loophole between sale and settlement.

By: Reporter101

Reporter101 — Mon, 29 Sep 2008 02:27:50 +0000

Can almost safely bet we’ll never get to see the hedges short sale records in two weeks.

Hedge-fund managers are reluctantly preparing to disclose their short positions to U.S. regulators Monday, a move set to give a rare public glimpse into their secretive trading strategies two weeks later.

For shareholders who have blamed short sellers for driving down company stocks, it will be a chance to see who is targeting their firm.

It is also an experiment by U.S. securities regulators, putting short sellers briefly on a similar footing to large investors who accumulate stocks and are required to regularly disclose their positions publicly.

Under a temporary Securities and Exchange Commission order, big money managers will have to reveal the number and value of securities sold short each day last week.

The disclosures are part of a series of measures the SEC has undertaken to crack down on market manipulation with an eye to calming markets rocked by a series of bank failures and fears the credit crisis will worsen.
But hedge funds and short sellers have cried foul and one has likened the disclosures to forcing Coca-Cola Co to reveal its secret formula to its competitors.

Short sellers fear that once their positions are revealed to the public, other investors will copy their positions or reverse engineer their proprietary trading strategies.

“Let’s suppose a quant fund, another class of hedge funds has a large short position based on a computer model or algorithm, investors or traders could try to artificially squeeze the quant fund by buying what they are short,” said Doug Kass, a short-seller who is founder and president of hedge fund Seabreeze Partners Management.

Short sellers, who sell borrowed stock in hopes its price will fall, have been accused of driving down stocks in major financial firms like HBOS, Lehman Brothers and Bear Stearns.

Lehman filed for bankruptcy protection earlier in September. Bear Stearns was sold to JPMorgan Chase [JPM 48.24 4.78 (+11%) ] in an emergency sale brokered in March by U.S. officials.

The SEC and other regulators in the United Kingdom, Germany, Canada and Australia has imposed temporary bans on the shorting of financial stocks.

The U.K.’s Financial Services Authority has also imposed a similar disclosure rule and is requiring investors with an existing short position above 0.25 percent of a financial company’s share capital to declare the size of their holding every day.

The SEC will keeps its information private for two weeks.
After that, the information will be disclose to the public on via online Edgar filing system.

The Washington D.C.-based hedge fund lobby group, the Managed Funds Association, has urged the SEC to amend the order and keep the information private.

It is unclear whether the SEC will amend the order.

However, the agency is expected to consider permanent rules requiring short interest disclosure.

The SEC is requiring money managers to file a comprehensive form that includes their short position at the beginning of the day, the number of securities sold short, the value of the securities sold short and the short position at the end of the day.

The form also requires money managers to disclose their largest intraday short position and the time of day of the largest intraday short position.

“The degree of difficulty in completing the new form is related to the degree of short trading activity of each manager and the level of sophistication the manager possesses in capturing the required information,” said David Tittsworth, executive director of the Investment Adviser Association, which represents about 500 firms that collectively manage about $9 trillion in assets.

Travis Larson, vice president with Wall Street lobby group the Securities Industry and Financial Markets Association, said most firms will be ready by Monday. “Everyone recognizes it will be a lot of work between now and then,” he said late on Friday.

http://www.cnbc.com/id/26931679

By: AMG

AMG — Mon, 29 Sep 2008 02:02:19 +0000

The Conspiracy

. . . once main street realizes that the oversight was nothing more than friends allowing friends to operate as they see fit challenges to other related entities, transaction, clearing and regulatory based will come under fire. The question remains as to how the illegal gains, once expunged, will be returned to those harmed.

Wall Street is about to be exposed.

By: Fred

Fred — Mon, 29 Sep 2008 00:17:53 +0000

From what you say, it seems difficult to control fails in any pre-emptive way by jiggling the rules on up-tic, pre-borrow, T+3, etc. Maybe the thing to do would be to just install a circuit breaker. Establish a reliable way to count the number of fails, and enforce a limit on that. If the limit is reached, all short selling is banned until the fails are all settled and delivered.

One possibility is that the number of fails can not exceed x% of the average volume for the trailing 30 trading days.

By: dr. d

dr. d — Sun, 28 Sep 2008 17:39:08 +0000

Jeremy, the problem is that there are indeed “legitimate” reasons why delivery cannot be made by T+3 and the system needs to accommodate these. The crooks just paint their “illegitimate/intentional” delivery failures as being of a “legitimate” nature. The DTCC holds that all delivery failures are of a “legitimate” nature until proven otherwise and the “proof” is not accessible to the investing public because of theoretical “privacy issues” associated with “proprietary trading methodologies” of hedge funds and market makers. Recall in the IOSCO article cited above how CCP’s provide “anonymity” which is good in one sense but bad in another since it can mask fraudulent behavior. From the DTCC’s now famous 1/27/06 press release:
”DTCC subsidiaries clear and settle trades. Short selling and naked short selling are trading strategies regulated by the marketplaces and the SEC. DTCC is involved after a trade is completed at the marketplace. DTCC does not have regulatory powers or regulatory responsibility over trading or to forcing the completion of trades that fail. As the SEC has stated, fails can be the result of a wide range of factors.” Thus the goal of the crooks is to get that “illegitimate/intentional” delivery failure into the DTCC where they can with 100% certainty rely on the DTCC management to proffer that they are “powerless” to do anything about it i.e. “powerless” to buy it in. But a “buy-in” is the only solution available when the selling party absolutely refuses to deliver that which it sold. The crooks will open up the champagne bottles on T+4 because that delivery failure is good to go for perpetuity. There are no monthly or annual reconciliations of delivery failures at the DTCC. Here’s where the smoke and mirrors kicks in. Technically that unfulfilled delivery obligation is owed to the CCP that intermediated the trade i.e. the NSCC. When the “surrogate” creditor of this unfulfilled delivery obligation claims to be “powerless” to force the seller to deliver that which it sold then you’ve got one of the most brilliantly designed frauds imaginable because this “surrogate creditor” (NSCC management)is the employee of the party refusing to deliver that which it sold. The NSCC management’s role is to play the “powerless straw man” that acts as the door man to allow the delivery failure into the safe confines of the NSCC”s “C” sub-account where they are hidden and nurtured. In the DTCC quotation cited above the DTCC claims that they get involved AFTER the trade is completed. That’s not true. The “settlement” of the trade i.e. delivery versus payment represents the completion of a trade. The DTCC’s mandate is to “promptly settle” all trades. These trades don’t legally “settle”. The “trade guarantee” of the DTCC is bogus. The DTCC’s assertion that: “As the SEC has stated, fails can be the result of a wide range of factors” is a red herring. Truly “legitimate” delivery failures are typically of a 2 or 3 day duration and are not the issue. In reality the NSCC has all of the power in the world to buy-in delivery failures once it becomes obvious that their abusive “participant” that sold the shares has no intention whatsoever in delivering that which it sold. In the words of Dr. Rob Shapiro the former Undersecretary of Commerce the DTCC willfully “chooses” not to do these buy-ins because they are not in the financial interests of those that own and administer the DTCC.

By: Lawrence

Lawrence — Sun, 28 Sep 2008 17:29:39 +0000

I believe Mr. Byrne is one of the Greatest American Hero’s EVER. I believe very strongly in his efforts of giving all law bidding Americans a Future.
I have submitted a story to CNN iReports on the matter myself. Pleasr feel free to view and pass it on.

http://www.ireports.com/docs/DOC-85097

ps..I am writing in Patrick Byrne & Lou Dobbs as my picks for Pres & Vice Pres in November.

By: Sean

Sean — Sun, 28 Sep 2008 16:41:35 +0000

LOL!!Thanks Jeremiah 9:24 I can’t stop laughing. I would have never guessed but it fits!!

By: Jeremiah 9:24

Jeremiah 9:24 — Sun, 28 Sep 2008 15:46:49 +0000

Sean,

May I suggest that Mr. Patch would approve substituting “man” for “?????”. Charlie wears a flowered skirt when his hedge fund masters come calling.