Categorized | The Mitchell Report

    The Growing Gap Between Reality and the Media

    Following is a very partial list of people who have said abusive short selling must be stopped.

    Then Secretary of Treasury Paulson

    Former Chairman of SEC Harvey Pitt

    Then SEC Chair Christopher Cox

    Then Senator Hillary Clinton

    Presidential Candidate John McCain

    George Soros

    The members of the American Chamber of Commerce

    Charlie Munger, Vice Chairman Berkshire Hathaway

    John Mack, CEO Morgan Stanley

    Dick Fuld, then CEO Lehman Brothers

    Members of the North American Securities Administrators Association

    Robert Shapiro, former Undersecretary of Commerce

    Harvey McGrath, former chairman of Man Group, world’s biggest listed hedge fund

    ___________________

    Following is a partial list of mainstream media outlets that have yet to deliver a single comprehensive story about abusive short selling:

    The Wall Street Journal

    The New York Times

    The Columbia Journalism Review

    BusinessWeek Magazine

    The Chicago Tribune

    The Los Angeles Times

    Fortune Magazine

    The Washington Post

    CNBC Television

    CNN Television

    ____________________

    This week, Eddie Lampert, the hedge fund manager and Chairman of Sears, became the latest to speak out against the problem. Here’s what he had to say…

    “…the level of “naked” short selling of our shares was significant. The activity can be measured by the number of shares sold short as disclosed twice monthly by the NYSE and Nasdaq as well as by the reported number of instances of failure to deliver securities by short sellers to purchasers of Sears Holdings stock….

    …the SEC has taken further actions to enforce “naked” short selling rules that had been in place, but not enforced, for a significant period of time. This is an important protection for shareholders and for property rights. The sale of property (shares in a corporation) that a seller does not own and can’t deliver (naked short selling) is an affront to property owners, and a destroyer of confidence and trust. Much of the commentary around short selling ignores this simple fact.

    While I understand (and often appreciate) the urge to critically evaluate possible regulation, it is interesting that there has been protest by those on the short side with regard to some of the rules that have been suggested. For example, the reinstatement of the uptick rule, which would require any short sale to occur at or above the last sale price on the stock exchange. Such a rule had been in place for over 70 years (to prevent “bear raids” in which short sellers aggressively sold stock at ever lower levels, undermining confidence) until it was repealed in 2007. It has been suggested that, because stocks are now traded in decimals rather than in 1/8 point increments, such a rule is obsolete or unnecessarily difficult to implement. However, what the opponents fail to point out is that companies who repurchase their own shares are advised to adhere to a rule that forbids those companies from initiating a plus tick when repurchasing shares. Why policymakers would favor an asymmetric application of a rule like this in favor of short sales and against company repurchases is a mystery.

    Similarly, the SEC has required short sales of securities to be reported periodically beginning in the second half of 2008. Short sellers have prevailed on the SEC to allow this disclosure to be done privately on the basis of a claimed need to protect their investment strategies. While I respect this privacy right, investors who purchase and own stocks, however, are afforded no such privacy in their holdings. In fact, holders of securities are required to publicly file their holdings on a quarterly basis. Such public disclosures have been known to attract the interest of short sellers when institutional investors and hedge funds have found themselves under performance or redemption pressures. Again, it is a mystery as to why those who are owners of publicly traded companies are required to disclose their holdings while those who sell short those very same securities are permitted to keep their positions private…”

    * * * * * * * *

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    61 Responses to “The Growing Gap Between Reality and the Media”

    1. al says:

      On CNBC’s Fast Money they reported on Lampert’s comments with the headline, “LOCO LAMPERT”

      It is almost reminiscent of the McCarthy era communist witch hunts.

      If you come out against NSS, you are labeled in the media as a loon, or nut case.

    2. Lara Braveheart says:

      Mark & Patrick,

      I just got to say, I admire your courage and tenacity in your investigations on these issues. I really do. Me thinks you are a form of modern day Wyatt Earps…

      As for the Stock Market; my views on Stock Markets’ are kind of very extreme. I consider the entire Stock Market, all Federal Welfare programs, whether Medicade, Social Security, 401K; Pension funds, et al; to be forms of Ponzi Schemes; not of the outright fraud Madoff type, but in the big picture, in my view (I recognize others disagree; and I respect that; but I wouldn’t invest one penny in any publically trated Corporation; not even at gunpoint; and definitely not based on Bernays Psycho-Babble PC BS ‘Public Relations’.

      I consider this a good defintion of a Ponzi Scheme:

      In 1920 an Italian immigrant Charles Ponzi introduced an investment scheme in Boston that amounts to an expanding game of musical chairs, in which one must buy a chair for someone else in order to join the game, the price of a chair is ever rising (so that eventually, it will be unaffordable), the last people to join the game never get a chair, the number of players always far exceeds the number chairs, and none of the players create anything of worth by way of participation.

      In my view sooner people wake up to the reality of Stock Exchanges, and their massive role in the economic ratrace debt slave matrix prison paradigm, the sooner we shall be capable of conversations about new paradigms of living. And perhaps that may be a role you could play. But I am aware there be many who are addicted to Stock exchanges, as if they are things that have always existed, and are required to exist, and that humanity couldn’t live fine without them.

      And in my view, I’d say before da white man hit the North American continent, da red man probably had a far higher quality of life (in terms of his psycho-emotional socio-economic balance) than has been the case since then; and they didn’t have one stock exchange, as far as I am aware!

      At a 9.1% exponential rate of oil production reduction; maybe we be there sooner than many of those Fortune 500 CEO’s be thinking….

      We shall see.

      Thanks again, for your inspiration.

      Lara

    3. John Allen says:

      Yeah, don’t forget about Eddie Lampert’s just published comments in his annual letter about naked short selling and the double standard between long investors having to report their positions and short sellers not having to. He also mentions how companies buying back their stock have to wait for a down-tick but short sellers no longer have to wait for up-ticks.

    4. John Allen says:

      Nevermind, I hadn’t read the post. 🙂

    5. mhelburn says:

      Really good article on economics and the market by ex-treasury official..

      This should be included here.

      http://www.gata.org/node/7197

    6. n-tres-ted says:

      I think Steve Forbes is a notable worthy of mention in your list. He has hammered repeatedly in recent months on the need to eliminate NSS, including a new article today. Thanks again.

    7. irieblue says:

      Here is the Fast Money segment on Loco Lampert..

      http://www.cnbc.com/id/15840232?video=1046834381&play=1

    8. sean says:

      Could it be the beginning of the end for these criminals or is it just window dressing..

      Recs: 1 FBI arrests Stanford Financial Group exec
      Allen is still free….appears FBI hoping to turn Laura into a rat…..maybe let him go another 13 years while they or “another agency” watches him?

      FBI arrests Stanford Financial Group exec

      Thursday February 26, 8:45 pm ET

      Chief investment officer for Stanford Financial Group arrested on obstruction charge

      HOUSTON (AP) — FBI agents have arrested the chief investment officer of troubled Stanford Financial Group, accusing Laura Pendergest-Holt of obstructing a Securities and Exchange Commission fraud investigation.
      The SEC has been investigating allegations of an $8 billion investment fraud involving Texas billionaire R. Allen Stanford’s financial group.

      Pendergest-Holt was arrested Thursday in Houston. The FBI said she was taken to the federal detention center and will appear in court Friday morning.

      The government alleges in a federal complaint that Pendergest-Holt obstructed the investigation with some of her answers to SEC investigators’ questions.

      Attempts to reach an attorney for Pendergest-Holt were not immediately successful.

      http://biz.yahoo.com/ap/090226/stanford_exec_arrested.html

    9. Fintas says:

      Ok, Mark another great post that simply confirms what most here know. So what’s it take to enforce the law? What’s it take to simply have those responsible do their job?. And lest we forget that EDDIE LAMPERT was helpful in taking down KMART So what’s it going to take? Snow flakes/ pitch forks or other?

    10. Anonymous says:

      sean,
      The moral to the story about involvement with the likes of Mr. Stanford is this:

      You bed with the crooks who do knowing business with even more dangerous bad crooks for the love of money one day, if you live long enough, you’ll regret the day you made that decision to participate and fear for your life…..rightfully so. !!

    11. sean says:

      OK so would all care to respond to this question..How come no investigations,arrests, indictments, based on all the data provided by this website? No libel suits, no outrage by the NY Media, nothin almost like they can ignore Deepcapture, but they can’t. And finally you mean that with all the proof Eagle Tech, Overstock, Taser, Colonial Bank,FairFax, Sedona, Jag Media and the many others that I have forgotten not one has been able to win against the very “Apt” SEC and non-corrupted FINRA? Something is very fishy here. I think settlements are being made behind close doors so these rich mucket-mucks won’t have to serve time in jail. The info. is out there and too incriminating not to send some very rich people to jail. Dr. Decosta I read how the SEC blocks the lawsuits against them and other colluders but with all that has happened recently to damage their credibility I think now would be the perfect time to hold these sons of- bleeps feet to the proverbial fire!! Lets get it started. Thanks Mr Lambert a crook in your own right as Dick Fuld was and Allen Stanford and Bernie Madoff is!!!

    12. rtway says:

      Sean, how do you tell a slimy fly he smells like a pile of s–t while you are sitting on the pile of s–t next to him. There is no Elliot Ness in the town to kill the flies or even hit em with spray. Ain’t no fly gonna push the button on the whoop ass fly killer without doing himself in. Therefore your observation is probably dead on. Great job as always Mark. Thanks.

    13. tommytoyz says:

      I think more and more that the solution will have to come via the states. All it would take to get the rock rolling would be for one state to amend its UCC (Uniform commercial code) which Wall Street must rely on to make book entry transfers of securities possible.

      The SEC has also relied on the UCC’s “securities entitlements” to clainm that that brokers can credit securities to accounts before the actual security is obtained. While this is true, it is not true after settlement date – something they leave out of the statement.

      So the UCC should be made perfectly clear and amended to state that “securities entitlements” are only valid up to the contracted settlement date and not after that date.

      A further amendment should state that voting and other rights conferred by customer securities should be held by brokers in at least the number as are settled and credited to customer accounts.

      Finally, the UCC can be amended to add that all financial intermediaries that are counterparties to unregistered FTD and FTR type securities must report their daily holdings in them to the state, as these are not securities covered by any federal statute. FTD and FTRs are considered “uncovered” securities by Section 18 of the Securities Act of 1933.

      These are all things the states can do by amending their UCC. The feds will never go to these lengths – because as Patrick said – it’s turtles all the way down. But we need one large state to do it and it’ll force change.

      Just as a reminder, only the states can amend the UCC and the UCC governs:

      1. The transfer of securities (think book entry transfers)
      2. The rights securities confer
      3. The obligations of financial intermediaries (think brokers)
      4. The definition of securities
      5. Securities entitlements
      6. Much more………

    14. jbod says:

      Why hasn’t anyone proposed or, preferably, implemented a requirement to hold in escrow payment for stock sales until delivery is made and, perhaps, include a condition to cancel the purchase at the discretion of the buyer for any failure to deliver after ?? days?

    15. Jimh says:

      Weiss is the DTCC’s Man in Black.

      Running around fervently trying to disabuse investors that they’ve been witness to blatant naked shorting in the market.

      Claiming that anyone who believes it has a spaceship orbiting their heads.

      The more he opines…

      Have we really become so corrupt we can’t stop this?

    16. Fintas says:

      What does it take?

      It takes contacts. It takes those who are in position to use their stroke. Now we know Patrick is involved. A crusader for sure who orignally knew his company had been attacked and then broadened it to educate and protect the system. Yet along the way it’s take YEARS to get to this point. Yet Patrick has his contacts. One of them is Buffet. And Buffet knows the game but in the past his view was that results would eventually be the heat seeking missle that would find the bad guys. Except even ol Warren’s Berkshire is under attack as Jimmy C and Doug K now have their BUFFET WATCH as they now diss him and his holdings. So Berkshire holdings are under attack. So Buffet is tied to GE and there we have IMMELT and as most should understand GE is under attack. Now here’s a novel idea. Buffet has the ear of the new president elect. Immelt has the ear of the new president elect. Mack who has been protected has the ear of the new president elect. Maybe this coeterie can use their stroke to get those now in charge to do a simple thing. Do their jobs and ENFORCE the law. Yes a novell idea. Yet make no mistake there are ENOUGH WHO KNOW. It’s time for them to ACT! At the root of every corporation is the corporate policy. Find it/read it and then one KNOWS what the policy is. At the root of the govt is our constitution and the laws based upon that constitution. Last I heard the Federal govt is still in place and so too the nuances of the govt. SEC etc. It’s really a simple matter of having those in power do their job. Again there are ENOUGH that KNOW and yes I understand at this moment it is very difficult to just do the FORCED BUY INS as they continue to try to save the BRIDGE aka financial system. Yet at some point. Cmon Warren/Immelt/Munger/Pitt/McCain/Patrick B and your coeterie, use the stroke and your PATRIOTISM and STOP THE INSANITY.

    17. ron doc says:

      Fintas, sadly I am afraid of those you name only one does not dance at the ends of the strings of the master puppeteer. Or as Jim Sinclair refers to the master puppeteer as “the ‘One’ at top of the Pyramid”

      Patrick!

      And no, even though Warren has been a mentor to Patrick, I don’t think he is free of these same strings. I only hope I am wrong.

    18. Fintas says:

      Ron Doc. YOU HAVE EYES THAT SEE and EARS THAT HEAR. The point I was making is that the solution is SIMPLE. And there are those who are and were able to do such. They haven’t in the past for various reasons. And at this moment I’d submit most are scrambling to SAVE the SYSTEM that they can NOT do it at this very moment. However, the action taken re C today is another step to the fix. And at some point once the system/bridge is determined to be safe. Then we just might see those with STROKE do something. IF not then yes the markets will BOUNCE and those annointed the good guys will do the buy ins as they crush those determined to be bad guys. However you are correct too many got caught up in the puppet strings. Buffet will not live long enough to see his Berkshire recover to it’s high IMHO. Shame Warren you didn’t protect your investors as you should have and could have. Maybe your talking down the market a year plus ago to help to obtain change bit you in the butt. In your defense Warren you probably didn’t see it coming. BUT YOU SHOULD HAVE! It isn’t like you didn’t KNOW. Patrick had your ear. You knew. And now you and your investors pay the price along with the companies you own. TSK TSK..

    19. Anonymous says:

      They need to ban custody tricks such as repo agreements, etc. and require obligations to be 100% backed by real shares, but this is a start.

      Portugal last September banned “naked” short-selling of financial stocks, where an investor has no securities to cover a transaction.

      http://www.guardian.co.uk/business/feedarticle/8378695

    20. Anonymous says:

      You could completely ban naked shorting and you’d still have a problem with custody.

      What’s to stop any one entity in the custody chain from selling from his long position, so that he has less shares than he owes the next entity in the chain? They think it is fine to fractionally back shares the way banks fractionally back deposits and don’t understand what our complaint is.

      Naked shorting is like the portion of the iceberg that’s above water. The much bigger threat and the bulk of the danger is the custody problem below the surface.

      Since custodians are not banks, I think they are committing fraud under state law to send out statements implying a security is there under deposit when it isn’t.

    21. Peter says:

      http://globalresearch.ca/articles/HUD403A.html
      I just read this this morning and while I lack the expertise to judge the details, the general tone and explanation of the nation states joining with the crooks to achieve specific geopolitical ends on the one hand and safe haven for dirty cash on the other seems very symetrical with Deepcapture’s thesis. Do any other readers or Mark or Patrick have the expertise to comment?

      It all sort of resonates with an article I read years ago called “Narco dollars for dummies”

      That said, the host site is a tad left for my personal taste and I am not familiar with the author or the interviewee, so it could just be more hooey.

    22. Dr. Jim DeCosta says:

      The following quote is from an amicus brief filed by the SEC in an effort to get a case filed against the DTCC for naked short selling abuses to be thrown out of court. What was at stake? If the case went on to the discovery process then the existence of massive levels of naked short selling abuses in our markets and the existence of this massive “industry within an industry” may have been revealed. The SEC at the time simply could not allow this to happen.

      “The fact that a broker-dealer that is an NSCC member fails to receive
      securities that it purchased on behalf of a retail customer does not mean that the customer’s purchase is not completed until the member’s failure to receive is cured. Under Article 8 of the Uniform Commercial Code, a securities broker-dealer may credit a customer’s account with a security even though that security has not yet been delivered to the broker-dealer’s account by NSCC. In that event, the customer receives what is defined under the Uniform Commercial Code as a “securities entitlement,” which requires the broker-dealer to treat the person for whom the account is maintained as entitled to exercise the rights that comprise the security. See UCC Sections 8-104, 8-501.” (Note that 8-104 and 8-501 say nothing of the sort)

      Let’s go back to the example of “Acme” with 100 million shares “outstanding” and all of them being held at the DTCC in “street name”. Let’s assume that each of 10 NSCC participating clearing firms hold 10 million of these shares in their NSCC participant “shares” accounts. Let’s further assume that there are 80 million Acme “shares” currently held in a failure to deliver status with each of the same 10 firms holding 8 million FTDs.

      Above the SEC lawyers referred to “the rights that comprise the security”. In actuality a “share” of a U.S. corporation represents a “package of rights” attached to that corporation. There are about a dozen rights within this package. They include voting rights, rights to the assets remaining after dissolution, rights to dividends, rights to attend annual general meetings, rights to notice of meetings, rights to participate in financings known as “rights offerings”, etc.

      In no way, shape or form does the DTCC have the power to create out of thin air new voting rights and hand them to investors that bought yet to be delivered shares. Further, neither the DTCC nor its participating clearing firms operating outside of the DTCC have the right to diminish the voting power of those that purchased the 100 million shares being held at the DTCC in “street name”. The legal “ownership” of shares as represented on the books of the DTC is what conveys voting rights. “Ownership” is now strictly defined by Reg SHO. “Ownership” has nothing to do with the accounting measures denoting failed delivery obligations being held on the books of the NSCC participants.

      Legitimate “shares” can only be issued by the board of directors of a corporation and only via a director’s resolution. These “shares” then need to be “registered” by the SEC or they need to qualify for an exemption from registration before being allowed to trade. The “accounting measures” known as “securities entitlements” have no voting rights attached. They were designed by the authors of UCC Article 8 to be an IOU of perhaps the 2 or 3 day lifespan associated with a legitimate delay in making delivery by “settlement date”.

      Nobody has the legal right to “entitle” the purchasers of failed to be delivered shares to exercise any rights that compromise the security EXCEPT the right to resell this “security” at a time of one’s choosing. This one and only right was granted because of the assumed ultra short termed lifespan of these “securities entitlements” resulting from legitimate/unintentional delivery delays. Securities fraudsters noticed the granting of this one right and since it is indeed the most often exercised right within the “package of rights” they tried to sneak the rest of the package of rights in also and as you can see the SEC actually went for it.

      Let’s go back to the Acme example. There are indeed 100 million paper-certificated shares being held in DTC vaults to back up the 100 million electronic book entries held by the 10 NSCC participating clearing firms. Being that there are 100 million shares of Acme “outstanding” then from the limited view of the NSCC (and Acme management) everything APPEARS to balance out nicely. But what about those 80 million FTDs being held by the 10 NSCC participating clearing firms OUTSIDE OF THE NSCC? What does the NSCC say about those? They don’t say anything; they go out of their way to blindfold themselves as to their existence.

      When asked about them the NSCC management will pull a “see no evil” from underneath their blindfold and disavow any knowledge of them and refer you to the clearing firms holding them on their books. That’s rather odd behavior for an SRO (Self-Regulatory Organization) acting in what the SEC refers to as “the first line of defense against naked short selling abuses” which is, as an SRO, mandated to create and enforce regulations associated with the “business conduct” of its participants. Wouldn’t the selling of massive numbers of nonexistent shares to unknowing U.S. citizens and refusing to deliver to them that which they sold qualify as the “business conduct” of its participants?

      So just where are these missing 80 million “pseudo-shares” being classified as “securities entitlements” which requires the broker-dealer (THEORETICALLY) to treat the person for whom the account is maintained as entitled to exercise the rights that comprise the security? In reality, they aren’t anywhere. They are “accounting measures” known as “securities entitlements” on the books here and there denoting missed delivery obligations but there never were any “shares” that were legally “owned” that were sold.

      Note that each of the 10 NSCC participating clearing firms will send out monthly brokerage statements to its investors “implying” that it is “holding long” these 18 million “securities”. Apparently the 8 million “securities” above and beyond the 10 million legitimate “shares” being held in a vault at the DTC are only being “held long” as failed delivery obligations on the books. The DTCC management can almost with a straight face say that they truly did not know of their existence on their participant’s/bossses books. That doesn’t mean that they shouldn’t know of this “business conduct” they are mandated to monitor as “the first line of defense against market frauds” and be regularly buying them in on perhaps 3 or so days after the previously agreed to “settlement date” came and went.

      Let’s test the insanity of the SEC’s statement by having Acme declare and issue a 100% share dividend to its shareholders. For each share “owned” the legal “owner” would get a free share. Note that the share price would obviously be cut in half. Acme’s transfer agent seeing that all of its shares were being held in “street name” at the SEC would then issue a certificate for 100 million shares to the NSCC to be distributed to the “owners” of the 100 million Acme shares on a 1-for-1 basis. How are the 10 clearing firms going to distribute the dividend shares owing to the purchasers of the 80 million failed to be delivered shares? There’s obviously only one way and that would involve the 10 firms going into the open market and buying 80 million real “shares from existing Acme shareholders and then handing them onto their clients, right? Wrong! Those 10 clearing firms will merely credit 80 million more “accounting measures” known as “securities entitlements” to the accounts of those investors whose purchases never got delivered. They’ll put these on the monthly brokerage statement of their victimized clients right next to the other debt that never got paid.

      But wait a minute; the dividend that was declared was for real Acme “shares” with voting rights and other rights attached. Anybody short a stock on a dividend record date is obligated by law to cover that dividend not to post another IOU that has already proven itself to be credit unworthy. Note that covering the dividend is independent of covering the original naked short position so the least you should do is cover the dividend. In fact the very nature of the dividend process would have pointed out to the clearing firm the existence of that archaic FTD that has never been addressed by a buy-in.

      Let’s go back to that statement made by the SEC to the appellate court judge cited above in regards to “securities entitlements” ,” which requires the broker-dealer to treat the person for whom the account is maintained as entitled to exercise the rights that comprise the security. So what just happened? The purchaser of the yet to be delivered shares must (theoretically) be allowed to exercise the rights that comprise the security. One of these rights is the right to receive dividends. Therefore (theoretically) by extrapolation these securities fraudsters are trying to proffer the argument that as long as you keep “entitling” the purchasers of nondelivered shares to exercise any rights that become available to exercise then this Ponzi scheme can go on forever or until the NSCC finally buys in the delivery failure. Due to the fact that the NSCC management continuously proffers to be “powerless” to buy-in the delivery failures of its bosses/participants then this is in essence “forever”.

      But this still doesn’t address the fact that the dividend declared was for legitimate shares with voting rights and all other rights attached. Now do you see why the SEC chose to include that line cited above even though it is 100% bogus and has no backing by UCC Article 8 as advertised? In order to bring this entire abusive naked short selling “house of cards” crashing to the ground all a corporation under attack would have to do is to issue a 100% share dividend to force those trying to kill the corporation to cover their naked short position. If that were to happen then these crooks would be forced to deploy the funds they stole from U.S. investors back into the market to be able to finally deliver that which they sold them inordinate amounts of time ago as well as the dividends earned since that time. We couldn’t have that now could we?

    23. Dr. Jim DeCosta says:

      Note that all abusive naked short selling frauds are predicated on the concept/excuse that what got sold couldn’t quite be delivered on time due to a legitimate delivery day. The NSCC says to the purchaser of nonexistent shares go ahead and give me your money now because delivery of what you paid for is just around the corner. Trust me! At least there’s a semi-plausible “excuse” because there are indeed legitimate reasons for 2 or 3-day delays in delivery. This reality is the foundation for this whole family of abusive naked short selling frauds.

      In the case of matching dividends when you’re short a stock there is no such excuse. There are no theoretical delays in delivery occurring. There’s no “excuse” not to cover the dividend when it is due.

    24. Dr. Jim DeCosta says:

      What is an investor actually buying when he pays for nonexistent shares being sold by a crook? He is buying the “entitlement” to exercise the rights associated with legitimate shares. Unlike what the SEC told the apellate court judge in that amicus brief nobody had the right to sell that “entitlement” in the first place.

      Google “nanopierce” and read the amicus brief yourself. See if you can find all 11 of the misrepresentations/lies told to that judge by the SEC. You’re going to need a copy of UCC 8 also to identify all 11.

    25. davidn says:

      This guy is short treasuries (see the disclosure at the bottom). Why are we allowing people to bet against our own government borrowing? What’s the benefit to Americans in allowing this activity?

      To me, this is the real reason treasuries are risky, many of them fail to deliver and you are actually lending money to 17 Wallstreet firms at near zero interest rates.

      http://seekingalpha.com/article/115259-treasuries-true-risk?source=yahoo

      The majority of analysts today believe Treasury prices will fall when the appetite for risk returns. That is certainly one way to justify the fact that the price of Treasuries hovers at historical — and dangerous — highs. But there is another more volatile, yet less scrutinized potential outcome to this tale: Treasury prices may succumb, not because an appetite for risk drives capital to other asset-classes, but because Treasuries — the yields of which are commonly referred to as the “risk-free rate of return” — are finally exposed as, perhaps, the riskiest assets around

    26. Anonamiss says:

      Nice piece of work. At first, those who were involved in exposing the NSS crimes were cast as people who wore tin foil hats. As more light is shed on the prevalence of the activity and the overall corruption employed by a certain group of market players, you’re emerging as a credible force to be reckoned with.

      “First they ignore you, then they ridicule you, then they fight you, then you win.” – Ghandi
      Go you!

    27. Atlantic says:

      Ladies & Gentlemen. Leon Panetta has been reporting to the new American administration about Financial Terrorism. Small reports in print news and on web sites on this material have occasionally surfaced. Perhaps Chuck Grassley would care to visit this issue at his next hearing. The Obama team is no help. Mary Schapiro ??? Good Lord, no company will ever float an IPO again. Only to have their business value shorted to death. The only answer to the new CITI deal is if on Monday at 9:29 am; they announce the uptick rule has been reinstated – for all stock/bond listings. But that will never happen. Conflicts are too deep in the Obama team. Mutual Funds are keeping their few remaining clients in gold, bonds, commodities; only inflating the next bubble. The recently passed “stimulus package” helps the states now with expenses; medical/police. OK, fine. But will there be any Companies or Voters left here in America ? Maybe that was the goal…

    28. Anonymous says:

      Can you imagine if all the money from selling IOU’s went to the companies themselves?

      Think how many jobs those trillions could have invested and how much could have been reinvested into new plants, infrastructure, R&D, etc.

      Instead, the financial parasites suck the companies blood until it dies of bankruptcy and the laid off workers are unable to make their mortgage payments.

      Where did the money go?

      Scroll down to the house party pic.

      http://www.nowpublic.com/tech-biz/its-milken-madoff-mafia-markopolos-world?comment_sort=recent

    29. sean says:

      Please read this Blog and then watch the video and realize that CNBC and Larry Kudlow caters to ALL Hedge Funds and this confirms it again!!!

      MFA Spokeswoman Gaffes it on Shorting in Kudlow Interview of Richard Blumenthal
      Location: Blogs Bud Burrell – Front and Center
      Posted by: bburrell 2/27/2009 12:02 PM
      Today, Larry Kudlow interviewed Connecticut State Attorney General Richard Blumenthal on his demand for registration of hedge funds in that State.

      Kudlow, who is normally quite sharp, misconstrued his initial impression that registration would require full reporting. Not so, said Blumenthal.

      Anticipating the opposite position from Blumenthal, his producer arranged to have a talking head spokeswoman from the MFA (Managed Fund Association) split screen with Blumenthal.

      When Blumenthal said this was registration only and not reporting, she blurted out “We are fine with simple registration, but we don’t want our short positions to be opened up.”

      Opening up short positions was not a subject prompted by either Kudlow or Blumenthal.

      The MFA needs to keep this bimba right out front. I award her the both horns, the ears and the tail of the MFA for this gaffe.

      http://www.cnbc.com/id/15840232?video=1047490447&play=1

    30. Fintas says:

      Given the timing of the Citi announcement, the dividend cuts recently to B of A, JPM and today GE it would seem that a strategy is being implemented and soon we should see a few tactics be deployed. This is NOT going to stop the ANSS. It will allow for a bounce and the destruction of a few that have probably been determined to take the hits. IMHO. We shall soon see.

    31. Fintas says:

      Sean. I’d have to agree, Mr Kudlow seems to have strings attached to him that make it difficult for him to fess up. It was very apparent that he and many others were doing the Kansas City Shuffle after they banned Naked Short Selling. I remember almost gagging when they had KASS on many a show and he was using the DTCC without breaking a smile. Unfortunately most listeners were doing the What’s DTCC.

    32. mhelburn says:

      Catherine Austin Fitts has been in the good fight for a couple of decades. Knowledge is power and she has a syllabus for teaching economics. For anyone who wants to understand or teach same, here is the link.

      http://solari.com/archive/economic_101/

      Her story is recorded at http://www.dunwalke.com and she was abused by the system in the worst way and managed to survive. Taking on the system is not for the frail. Had she not been attacked and her work destroyed, things would be different today.

      The person who persecuted her is now in a very high position making headlines and going after the “bad” guys. No doubt he has his eyes on the Governorship of NY. By bankrupting her company, destroying her work that revealed where the money was being stolen and wasted at HUD, he was able to curry favor and money that got him elected to his current position. Can an official who tried to destroy a person working for the common good ever be trusted? He can be trusted to repeat his behavior.

    33. skoov says:

      Catherine Austin Fitts Here/Hear

    34. ANH says:

      Dear Patrick, Mark, or Judd,

      Your presentations which use Articulate (businessjive.com, deepcapturethemovie) are not compatible with Flash Player 10. They no longer load on my computer and many people who I have directed to these particular sites cannot load them either. You can resolve this problem by going to the Articulate web site and following the instructions at this link:

      http://www.articulate.com/support/kb/002567.php

      Please do so. I think the businessjive presentation is the most effective introduction to these issues for the common person (of which I am one). In my humble opinion you should update the material in that presentation to include how NSS has not only destroyed smallcap companies, but has been a major factor in bringing our economy to the brink of disaster. Thanks for everything you are doing.

    35. narco says:

      Mary, Catherine Austine Fitts wrote this. Scroll down to the picture of Grasso and ask yourself why he received the highest compensation of any NYSE CEO in history?

      http://www.narconews.com/narcodollars1.html

      Are all of these traders that make billions smarter than us or do they just cheat and steal?

    36. floatingpoint says:

      Back in the early 2000’s many of the large tech companies (MSFT,INTC,CSCO,QCOM for example) had tens of billions of dollars in cash on their balance sheets. To the banksters these giant piles of cash, totally outside their (the banksters’) realm, were probably perceived as a huge threat. Had the big techs thought outside the box and played their cards differently, hundreds of promising new tech startups could have been completely capitalized by this internal hoard of cash, severely impairing the banksters’ lifeblood.

      Enter Larry Kudlow on CNBC. First paired Jim Cramer on “Kudlow and Cramer” and then going solo on “Kudlow & Company”, Kudlow’s mantra, day in and day out, was for a company to pay dividends. Dividends, Kudlow suggested, might be regarded as a measurement of a company’s success – and maybe a larger dividend would lead to a higher share price. Kudlow’s elixir – wink wink nod nod to all of the above cash rich techs – linked company success (high share price) with paying dividends. And of course, behind the curtain, the banksters watch with glee as the cash stores of these large companies disappear as dividends are paid out.

      That $30B dividend really worked for MSFT.

    37. Paul says:

      This is another red flag to support DeepCapture’s conclusion that a few “prominent” hedge funds have captured the mainstream financial media and financial regulators. The evidence is voluminous and undeniable yet there nothing but silence by these so-called watchdogs of our democracy. Only Bloomberg, Forbes, Euromoney, and a hand full of journalists – such as yourself – have the guts to report about this massive fraud against taxpayers and small businesses.

      This fraud is much bigger than Madoff because it involves the broker-dealers, regulators, and the financial media playing their parts to spread rumors and artificially drive down stock prices by selling phantom shares to destroy companies that actually contribute to society by creating products, services, jobs, and tax revenues. The very fact that these miscreants counterfeit stock should bring the CIA and FBI swarming. What’s keeping them? It’s not like this is the first time that organized crime has committed stock fraud:

      http://www.fbi.gov/hq/cid/orgcrime/casestudies/mobstocks.htm

      http://laborers.org/nyd_Mob_WallSt._9-10-00.html

      It’s happening NOW, but on a MASSIVE scale. That, without qualification, is happening beyond a reasonable doubt.

    38. Mahmoud Ahmad says:

      So far ,it’s proven , the media is more influential than all those influential people on the list!

    39. Fintas says:

      NOW for those who really want to do something and ACT. This isn’t rocket science as Dr Jim Decosta points out. We know the rules. All that is needed is to PROVE it. And then run with the proof as one did with the BLUE DRESS or SECRET TAPES. So if there is one out their with the SKILLS and contacts.. Pick the company. Make it a well known company. Get the info. As has been said by Jammie Dimon. He is surprise no one has been taken down for BSC. The forensic types KNOW they can track things. So here and now. HMM want one where it’s blatant. GE. Want another? LVS. Want another? WYNN..Want another AMZN. HMM are we noticing something? It is not as if there are just a FEW examples and it would be hard to prove. HECK NO.. there are MANY examples. So pick one that is in the forefront of the publics mind.SHOW CORRUPTION/NEGLIGENCE/FAILURE TO ENFORCE and THEN TIE that EQUITY TO THEIR PERSONAL HOLDINGS/401K and show them the LOSSES that were incurred as BAD GUYS DESTROYED GOOD COMPANIES. YUP NOT ROCKET SCIENCE.

      Think ol Warren could prove such with AXP or GE or GS. YUP but tis hard to do if OL WARREN isn’t squeaky clean. However that doesn’t mean someone here or out there can’t do it for them. It’s just a simply act of getting the details/informants and then implementing. Othewise it’s all nice banter but do the congnizant really need to be told they’ve been robbed whether in a football game, baseball game, car sale or other. I’m sure there are MANY a MERRIL CLIENT that would LOVE to spill their gutts. Better do it soon before the new gang allows this market to rally and most forget the pain. Excpet those in WM/WB/and many others. shame shame

    40. Anonymous says:

      Where some of your money goes. Are these billionaire traders smarter than you or are they thieves who steal from your back pocket when you’re not looking?

      With a fortune estimated by Forbes at $8 billion, Cohen is the 36th richest American[6]. His $15 million house is 35,000 square feet (3,300 m2) and sits on 14 acres (57,000 m2) in Greenwich, Connecticut.[7] His 2005 compensation was reportedly $1 billion [8], considerably higher than his 2004 compensation ($450 million) [9], 2001 compensation ($428 million)[2], and 2003 compensation ($350 million) [10]. In addition, Cohen owns 7% of search engine Baidu [11].

      Cohen began collecting art in 2000, and over the past several years has become a prominent collector, appearing on Art News magazine’s “Top 10” list of biggest-spending art collectors around the world each year since 2002,[12] and Forbes magazine’s “Top Billionaire Art Collectors” list in 2005.[13] To date, Cohen has bought around $700 million worth of artwork [8]; in 2003, the New York Times reported that in a 5 year period, Cohen spent 20% of his income at art auctions [9]. He is reportedly building a private museum for some of his artwork on his Greenwich property [10]. In the winter of 2005 it became known that in 1999 Cohen had bought Edvard Munch’s “Madonna”. Reportedly this was for $11.5 million, a record price for any Munch painting to this date.

      His tastes in collecting changed “quickly” from Impressionist painters to contemporary art. He also collects ‘trophy’ art—signature works by famous artists[13][14]—including a Pollock “drip” painting from David Geffen for $52 million and Damien Hirst’s The Physical Impossibility of Death in the Mind of Someone Living, a piece that the artist had bought back from Charles Saatchi for $8 million. In the last two years, he reportedly paid $25 million each for a Warhol and a Picasso. He is a top patron of the Marianne Boesky art gallery.

      In 2006, Cohen remarked that repairing his suspended shark artwork, a cost estimated to be a minimum of $100,000, was an “inconsequential” expense. Since the shark itself is over 10 years old, it has begun to rot and requires replacement. [11] The replacement shark has already been caught [12]; once the exhibit is fixed, Cohen will have it moved into his SAC office [13]. Cohen has also placed a head sculpture made of frozen blood entitled Self in the SAC lobby [14].

      In addition, in 2006 Cohen bought a landscape entitled “Police Gazette” by artist Willem de Kooning for $63.5 million from David Geffen [15]. Also in 2006, Cohen attempted to make the most expensive art purchase in history when he offered to purchase Picasso’s Le Reve from casino mogul Steve Wynn for $139 million. Just days before the painting was to be transported to Mr. Cohen, Mr. Wynn, who suffers from poor vision, accidentally thrust his elbow through the painting while showing it to a group of acquaintances inside of his office at Wynn Las Vegas. The purchase was cancelled, and Mr. Wynn still holds the painting. Nora Ephron has written an eyewitness account.[15] In November 2006, Cohen purchased another Willem de Kooning painting, Woman III, from David Geffen for $137.5 million [16].

    41. Anonymous says:

      This guy does 3% of all trades on the stock market.

      There are just over 100 million households in America.

      Cohen makes $1 billion per year. People have trouble with large numbers, but that would be like every household in American sending him $10.

      What does this guy do to demand such a tremendous salary? Did he cure cancer? No. Did he invent perpetual motion? No.

      The answer is he is a hit man, that kills companies for a living. He steals from retirement accounts as he forces employees to be layed off, collapsing the American way of life.

      What does he do for a living?

      Hint, he is a defendant in anti naked short selling suits.

      He jealously guards his privacy, even trademarking his image to keep it off google.

      http://kara.allthingsd.com/files/2008/05/guillotine.gif

    42. Anonymous says:

      “He is a top patron of the Marianne Boesky art gallery.”.

      You know, Michael Milken’s friend Boesky?

      Small world, Adnan Khasshogi worked with Valerie Redhorse, Michael Milken’s office manager to bring down 175,000 investor accounts on 911 (MJK Clearing) and now we see a tie between Cohen and Milken.

    43. sean says:

      Then you can talk also about George Soros who made 2.6billion and John Pausen who made 3.7billion in 2007, anyone who makes that kind of money is doing something illegal.Who was the trader that places 1.5 million in puts on BSC and in 2 weeks walked away with 240million? make a guess please? Still think something stinks? Well yes it does!!

    44. ron doc says:

      Lee M Webb is at it again on Stockwatch. A new hit piece on Patrick,Judd Mark and Deep Cature on the slimy Canadian NSS tool site.

      Looks like they are in the ‘Fight ya’ phase.

      Checking on slime ball Lee shows he does mostly hit storys on stocks and companies.

      Wondering if it is just another pen name for Gary Weiss to use in Canada as Lee seems to hold Gary in such high regard.

      Also, to me, Lee writes with more of an American style. I have several Canadian partners in mining deals spend a lot of time talking with them and reading Canadian business writers stuff.

    45. m says:

      are the feds watching all these miscreants are we gettign any closer to this illegal naked shorting to end once and for all.

    46. sean says:

      From the NOVS board at Investorsvillage..Not a bad thought eh?

      Recs: 0 An Interesting Article – from The Guardian & The Observer

      These bankers are lucky that they are not going to jail
      The government has been too timid about confronting these failed financiers. It’s time that it showed some teeth

      Assuming it is out of the question to hang, draw and quarter Sir Fred Goodwin, pluck out his intestines while they are still warm and wriggling, stuff them into his greedy mouth and then display his severed head on a spike at the Tower of London, could we settle for shooting him instead? Yes, I know, I’m going soft.

      http://www.guardian.co.uk/commentisfree/2009/mar/01/fred-goodwin-pension-rbs

    47. sean says:

      I’m sorry, but the piece on 60mins was very weak. Not one mention of a name at the SEC and or Finra and no mention whatsoever of the DTCC. This was a fluff piece at best. Where’s the meat? Not one person in jail or indicted and 30trillion has been stolen from the Global markets in the last 5 1/2 months, 7 trillion from te US Cap. Markets alone!! Something has got to give. The only bright spot was Markopolos” testimony!!

    48. Anonymous says:

      Another weirdness with the cracked settlement system is it is possible to take control of a company without owning any shares on a net basis.

      Imagine a company with 1 million shares out, all owned by insiders. Simply naked short 3 million shares to yourself in another account. All you have to put up is 2%, temporarily, as the sale is a wash.

      Each share is only worth 1/4 of a vote because there are 4 million entitlements outstanding.

      You would own 3 million x .25 = .75 million votes and the insiders would only own 250,000 votes.

      Use your votes for whatever evil you want, such as buying the company for a song, then reverse your trade and get your 2% back.

    49. n-tres-ted says:

      Anon, I’ve seen that done to a tech company. SAC and others acquire major positions in the company during low volume trading as the share price declines. Then they arrange a sale at a price that is half what it should be as a minimum. Then they blow out that deal and cut the share price in half again. There is no sheriff in Dodge City.

    50. Fintas says:

      I’m still seeing the comments off for Patrick Byrnes latest re the attack on Buffet. While here, let’s face it. They’ve been trying to take Warren down for years and in the past Warren could just do his thing and eventually the numbers would support the rise up and catch those naked. Here and now they are ATTACKING his holdings and as they do they are able to take Berkshire down for as the holdings drop so too Berkshire. Yet the key to all of this is NO ONE is ACTING TO STOP IT. And that would appear to be the end game as Patick suggests..Break the system OR take it low enough that you take the price down of many an equity so you can take the spoils for yourself.

      Here’s the bottom line. IF Parick who knows or a Warren who knows can NOT defend themselves…that what does that say for the avg investor. Keep in mind there are GOOD guys.Many of them reside on this board. Yet remember the names of the BAD GUYS. THEIR TIME will come.

    51. Dr. Jim DeCosta says:

      THE NSCC-THE “FORGIVING FRATERNITY”

      Our DTCC administered clearance and settlement system utilizes a system involving the legal concept of “novation”. “Novation” means “to create anew”. When a trade is executed the selling party owes the buying party the delivery of the securities it sold. During “novation” the delivery obligation of the selling party is “discharged” and the NSCC as the “central counterparty” (CCP) to the trade “assumes” this delivery obligation and promises to “execute” on it EVENTUALLY. The original selling party now owes the NSCC (and no longer the party it sold the securities to) the delivery of that which it sold and the NSCC then promises as the CCP to forward those securities on to the buyer.

      For 29 years I’ve been writing on how tricky “novation” can be especially if the selling party is a card carrying member of the party that “assumed” the delivery obligation it recently “discharged” and promised to “execute” on. If the CCP, the NSCC in this case, refuses to act in good faith in executing the delivery obligation it just “assumed” then the financial system supported by that clearance and settlement system is in deep trouble. Why?

      In slow motion what happens in “novation” is that an NSCC “fraternity brother” sells securities to somebody half way around the world. Two seconds later it now owes the CCP (the NSCC) the delivery of those shares. The NSCC also just happens to act as the “fraternity headquarters”. The seller of securities all of a sudden now owes itself as a fraternity member and its fellow fraternity brothers the delivery of that which it just sold.

      The NSCC just so happens to qualify as an extremely “forgiving fraternity”. A “forgiving fraternity” says to its fraternity brother debtors now that your debt is owed to yourself and your fraternity brothers you don’t have to deliver that which you sold previously as long as you at least collateralize the monetary amount of your failed delivery obligation. The clever part is that as all of these failures to deliver (FTDs) that give rise to readily sellable “securities entitlements” invisibly pile up in the share structure of the corporations targeted by fraternity brothers for destruction then the share price of the corporation predictably plummets. As the share price plummets so too do the collateralization requirements. Why? Because they are “marked to market” on a daily basis based upon the share price.

      As the collateralization requirements plummet the money of the unknowing investor on the buy side of that trade involving a failure to deliver flows to the selling fraternity brother despite the fact that he still hasn’t delivered that which it sold. In fact in a system with a “forgiving fraternity” that which was sold never needed to exist in the first place.

      Now how clever is that? You sell something that doesn’t exist and two seconds later you owe the debt to yourself and your extremely forgiving fraternity brothers. As if by magic this then automatically results in the investment proceeds of the investor getting duped to flow into the wallet of the fraternity brother that just has to merely refuse to deliver that which he sold. But don’t you have to worry about the fraternity headquarters forcing the fraternity brothers to deliver that which they sold so that they can “execute” on the delivery obligations it “assumed”? No, that’s part of the deal with a “forgiving fraternity”.

      The fraternity h

    52. Dr. Jim DeCosta says:

      THE NSCC-THE “FORGIVING FRATERNITY”

      Our DTCC administered clearance and settlement system utilizes a system involving the legal concept of “novation”. “Novation” means “to create anew”. When a trade is executed the selling party owes the buying party the delivery of the securities it sold. During “novation” the delivery obligation of the selling party is “discharged” and the NSCC as the “central counterparty” (CCP) to the trade “assumes” this delivery obligation and promises to “execute” on it EVENTUALLY. The original selling party now owes the NSCC (and no longer the party it sold the securities to) the delivery of that which it sold and the NSCC then promises as the CCP to forward those securities on to the buyer.

      For 29 years I’ve been writing on how tricky “novation” can be especially if the selling party is a card carrying member of the party that “assumed” the delivery obligation it recently “discharged” and promised to “execute” on. If the CCP, the NSCC in this case, refuses to act in good faith in executing the delivery obligation it just “assumed” then the financial system supported by that clearance and settlement system is in deep trouble. Why?

      In slow motion what happens in “novation” is that an NSCC “fraternity brother” sells securities to somebody half way around the world. Two seconds later it now owes the CCP (the NSCC) the delivery of those shares. The NSCC also just happens to act as the “fraternity headquarters”. The seller of securities all of a sudden now owes itself as a fraternity member and its fellow fraternity brothers the delivery of that which it just sold.

      The NSCC just so happens to qualify as an extremely “forgiving fraternity”. A “forgiving fraternity” says to its fraternity brother debtors now that your debt is owed to yourself and your fraternity brothers you don’t have to deliver that which you sold previously as long as you at least collateralize the monetary amount of your failed delivery obligation. The clever part is that as all of these failures to deliver (FTDs) that give rise to readily sellable “securities entitlements” invisibly pile up in the share structure of the corporations targeted by fraternity brothers for destruction then the share price of the corporation predictably plummets. As the share price plummets so too do the collateralization requirements. Why? Because they are “marked to market” on a daily basis based upon the share price.

      As the collateralization requirements plummet the money of the unknowing investor on the buy side of that trade involving a failure to deliver flows to the selling fraternity brother despite the fact that he still hasn’t delivered that which it sold. In fact in a system with a “forgiving fraternity” that which was sold never needed to exist in the first place.

      Now how clever is that? You sell something that doesn’t exist and two seconds later you owe the debt to yourself and your extremely forgiving fraternity brothers. As if by magic this then automatically results in the investment proceeds of the investor getting duped to flow into the wallet of the fraternity brother that just has to merely ref

    53. vinstar says:

      dear mark and team,

      one thing i do find a bit confusing in your list is that it seems your listing people for example g. soros and paulson (who did not even consider it an option to bail out lehman) who have obviously directly or indirectly profited from nss?

      could you explain this please?

    54. Kevin says:

      http://www.wholetruthcoalition.org/2009/02/26/the-bankers-manifesto-of-1892-history-repeated/

      Congressman Charles A. Lindbergh, Sr. revealed the Bankers Manifesto of 1892 to the U.S. Congress somewhere between 1907 and 1917.
      Webmaster’s Commentary:

      This is the gap between the crash of 1904 and the start of WWI.

    55. Kevin says:

      Why North Dakota has a surplus and what it means for fiat banking.

      http://www.globalresearch.ca/index.php?context=viewArticle&code=BRO20090303&articleId=12522

    56. Diane says:

      The only way to hurt the big banks is in their pockets. Support your local banks and credit unions. Move your money.
      Right now FDIC is in trouble. We all know why. The banks that did not participate in the “loser loans” are being punished by having to cover for the predatory behavior of the loser banks. What we can do is to write to the FDIC complaining about the unfair treatment of the good banks.
      Also take every opportunity to use comments space at the end of articles to compel people to seek out DEEPCAPTURE.

    57. Diane says:

      The FDIC has a Toll-free number:

      1-800-378-9581

      Why not keep their operators busy ?

    58. davidb4700 says:

      here’s the article–

      “Cramer has for a long time been crusading against naked short selling. But that kicked up on notch on Thursday when he found out the Securities and Exchange Commission investigated just 2.5% of complaints about the practice.
      As if he didn’t have enough reasons to dislike former SEC Chairman Christopher Cox. Now he can virtually blame Cox for the collapse of both Bear Stearns and Lehman Brothers. After all, naked short selling is what brought them down.
      Just to recap, short selling is the practice of borrowing stock to sell at high price and then buying the shares back at a lower price so as to return what was borrowed. The short seller keeps the profits. When the stock isn’t first borrowed, that’s called naked short selling.
      Market manipulators use this tactic because more shares can be sold short than actually exist, and that can overwhelm the target company. Illegal or not – and naked shorting is against the rules – these manipulators do it anyway because they can make big money in the process.
      Here’s what the short selling in Lehman looked like just before the company went under: 32.8 million shares were sold short but never delivered, as is required, which is called fails-to-deliver. That means the seller never borrowed stock in the first place. And the 32.8 million is 57 times as many failed trades as there were on the prior year’s peak. Cramer says that can mean only one thing: Lehman was being manipulated down to scare off its shareholders.
      At the same time, rumors were circulating that Lehman would be taken out at a discount just as Bear was, and that the investment bank was losing two trading partners. This was more market manipulation, Cramer said. But with the stock price already down, Lehman couldn’t issue more shares in order to raise money and save itself. Instead, the ratings agencies jumped on the bandwagon and downgraded Lehman, making the situation even worse. In the end, Cramer said the failed trades caused between 30% and 70% of both Bear and Lehman’s declines.
      Of course, Cramer wants heads to roll. But more than that he wants the SEC to do its job and enforce the rules. Christopher Cox, he fell short. But Cramer’s hoping Mary Schapiro, President Obama’s handpicked replacement, will institute much-needed changes at the regulatory body.”

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