Truman Show Moments and Doublethink on the Road to Deep Capture

You may remember Peter Weir’s 1998 film, The Truman Show, in which the protagonist (Jim Carrey) is enjoying what he perceives as a picture-perfect life in the idyllic town of Seahaven, but which is in fact a 24/7  TV show being broadcast globally from an enormous Hollywood sound stage.  The process by which he comes to recognize that he lives within a constructed and ersatz reality provides the narrative arc of the story. One seminal moment in his awakening occurs in this scene:

My long crusade (or Mitzvah, or Jihad, depending upon what side you’re on) against Wall Street corruption has seen similar  Truman Show moments. As is described in Mark Mitchell’s The Story of Deep Capture, in November, 2004 a fellow calling himself “Bob O’Brien” called me to explain some wild-sounding theories about Wall Street criminality. I did not pay  much attention to him, because he opened the conversation candidly letting me know that “Bob O’Brien” was not his real name, and that he was living out of a backpack in foreign lands for fear of getting whacked by Organized Crime. He sensed my disbelief, so before he signed off he told me he was going to make four long-shot predictions, and when they came true, to get back in touch with him. His predictions were as follows: a specific set of journalists (from whom, incidentally, I had never previously heard) would all be calling to do hatchet jobs on me; that Overstock stock would be getting listed on numerous obscure foreign exchanges; that I would become the target of a federal investigation; and that the SEC had recently adopted a regulation, Reg SHO, mandating that starting in January 2005 (two months hence), US exchanges would have to start listing stocks which were seeing excessive failures to deliver (a sign of market manipulation), and Overstock would be one of them. I thanked him and hung up, chuckling to myself.

A day or so after “O’Brien” called I received a call from the first of the journalists he named, and over the following two weeks, all of them called me. Our stock became listed on exchanges in Stuttgart, Munich, Berlin, Bavaria, Hamburg, Bahamas, and Australia. I went under the first of numerous federal investigations (when one ends another immediately starts in its place, and through litigation discovery and FOIA requests we have confirmed the existence of a minor industry of hedge funds and hedge fund choagies who perpetually lobby various government agencies to investigate me on trivial, obscure, and even Kafkaesque matters: remarkably, those government employees compliantly obey, in some cases shortly before taking jobs with the hedge funds who requested such concierge service). And in January, 2005, NASDAQ stared publishing its Reg SHO list of manipulated stocks: there are almost 3,000 firms listed on NASDAQ, a few dozen of which were on the Reg SHO list, and OSTK was one of them.

It was a minor Truman Show moment: if the world is organized as it appears on the surface, it should not be possible for a spotlight to fall out of the blue sky onto the street. And it should not be possible for a guy to make four wild predictions and have them all come true. The philosophers of science tell us that the power of any theory is its ability to make predictions. This guy made some far-out predictions, they all came true, and it would have been intellectually dishonest of me to dismiss him just because he said he was calling from a payphone at a Guatemalan bus stop to keep the Mob from whacking him, and was laying down a rather heavy rap about market manipulation, Organized Crime, and some of the major players on Wall Street.

So I began studying the issue he had been describing to me, that is, our capital market’s stock settlement system and its various loopholes.  Over time, I came to understand that it was not just sloppy, it was sloppy to an almosst inconceivable degree. I could not imagine how it had been designed to tolerate that much slop, unless someone wanted it to be sloppy.

But the real Truman Show moment came in April, 2005, from the SEC itself, which never lets me down. It came in the form of a memo they posted on their website. It has been taken down, but thanks to the wonders of the WayBack Machine we can still visit it in archived form. In it, they described their purpose in implementing Reg SHO, what it did and did not mean, and crucially, why they decided to “grandfather” (that is, forgive) all the failed trades that were in the system at the time of the passing of Reg SHO. If you are paying attention, you will have the same reaction to this as Jim Carrey did when the spotlight fell from the sky onto the street in front of his home:

Division of Market Regulation:

Key Points About Regulation SHO

Date: April 11, 2005

F. Grandfathering Under Regulation SHO

The requirement to close-out fail to deliver positions in threshold securities that remain for 13 consecutive settlement days does not apply to positions that were established prior to the security becoming a threshold security. This is known as “grandfathering.” For example, open fail positions in securities that existed prior to the effective date of Regulation SHO on January 3, 2005 are not required to be closed out under Regulation SHO.

The grandfathering provisions of Regulation SHO were adopted because the Commission was concerned about creating volatility where there were large pre-existing open positions.

Why that explanation struck me as so bizarre is because the SEC passed Reg SHO only under intense and unprecedented public pressure, insisting the whole time that it was not needed because naked shorting was not going on and there were no significant failed positions in the market. Then, they passed it with a loophole saying that it “does not apply to positions that were established prior to the security becoming a threshold security”, justifying this “grandfathering” on the grounds that: ” the Commission was concerned about creating volatility where there were large pre-existing open positions.”

If you are following along, the preceding statement by the SEC should seem Truman-Show-strange to you.  Think of it this way: The SEC was simultaneously arguing that there were no large open failed positions and even if there were they would not affect the market; but, they had to forgive all of them already in the system because if those non-existent large open positions were forced to cover it would create volatility. In sum: The large open failed positions do not exist, and if they existed they would not be affecting prices, but reversing those non-existent, non-price-affecting large open positions would crack the market.

To me, seeing that posted on the SEC website was like seeing a spotlight crash into the street out of a blue sky.

I am going to expand this story a bit, in a way that it will become even stranger.

Again, the SEC passed Reg SHO only under intense public pressure in 2003-2004. My source from inside the SEC has told me that never in his career had there been an issue that Wall Street’s lobby fought with such intensity, and that throughout that battle, the upper echelons of the SEC (e.g., Annette Nazareth, Linda Thomsen, James Bragagliano, Eric Sirri)  were carrying water for Wall Street. During that period, the SEC’s push-back to the public was that Reg SHO was not needed because there naked short selling was not going on, and hence, there were no significant delivery failures in the market.

Under the Administrative Procedures Act (APA), before making final decision is reached about the wording of a new regulation, a US regulator has to propose to the public the regulation that is being considered, in order to give the public time to comment.  Following this process, in 2004, under this intense public pressure, the SEC proposed a version of Reg SHO that had tiny teeth in it. After a period of public comment that was overwhelmingly in favor of making Reg SHO tougher, the SEC adopted a version that had no teeth at all.  Even within the SEC this was regarded as a transparent legalistic bait-and-switch, one that let them thwart public pressure yet keep the SEC in technical compliance with the APA.

In early 2005 the exchanges (such as NASDAQ and NYSE) began publishing Reg SHO lists. The persistence of names on these lists demonstrated that failing to deliver stock was, in fact, a regular feature of our capital market, the SEC’s protestations notwithstanding. In response, the SEC began arguing that, while yes, it was occurring after all, it was minor, inadvertent, and random, a result of random human error. Then in June, 2005, a consulting economist they hired, Dr. Lesli Boni, published Strategic Delivery Failures in U.S. Equity Markets, which told just the opposite tale. In her summary she wrote:

“Using a unique dataset of the entire cross-section of U.S. equities, we document the pervasiveness of delivery failures and provide evidence consistent with the hypothesis that market makers strategically fail to deliver shares when borrowing costs are high. We also document that many of the firms that allow others to fail to deliver to them are themselves responsible for fails-to-deliver in other stocks. Our findings suggest that many firms allow others to fail strategically simply because they are unwilling to earn a reputation for forcing delivery and hope to receive quid pro quo for their own strategic fails.”

People who were calling for transparency on this issue found themselves fighting the SEC to obtain even the most basic data. Many resorted to Freedom of Information Act requests, and even then, had to fight for each morsel of data. The SEC stuck to its guns, insisting that this was a non-issue, yet opposing the public release of data that could instantly determine who was right.

In the years following that I became part of a movement that fought skirmishes with the SEC.  I funded the deployment to Washington of entire legal and lobbying teams who tried to convince Congressmen and Senators of the seriousness of this problem, and take even the most obvious, commonsensical steps to address it (not for the company I happen to run, but for the marketplace as a whole). We tried to get Congress to pressure the SEC simply to disclose the data, or better yet, to eliminate the grandfather clause and the option market maker exception, and (our greatest hope) enforce a pre-borrow requirement on all shorting. Throughout this period, I was frequently made aware that lobbying on the other side of the table were the Wall Street banks, and the SEC itself.

Then, in 2008, our financial system began imploding, and the SEC immediately passed an unprecedented emergency order (“SEC Enhances Investor Protections Against Naked Short Selling“) granting the most aggressive form of protection we had been seeking (imposing a pre-borrow requirement on short selling), yet extending it only to the 19 most significant financial firms at the heart of Wall Street. That seemed odd on many levels, not the least of which was that many of those firms were prime brokers who had been enabling hedge funds to do it to other publicly traded companies.

Then, in September, 2008, the SEC rolled out a market-wide reform that was, once again, carefully designed to be toothless. It was around this time that I began publicly describing the SEC as bootlick of Wall Street (“Overstock CEO Comments on SEC’s New Rules Against Naked Short Selling: ‘Nerf penalties for financial rapists’ declares Byrne”).

In October and November of 2008, regulators around the globe began taking emergency measures:

September 21, 2008 Associated Press: “Dutch ban ‘naked’ short selling for 3 months: The Dutch Finance Minister is banning ‘naked’ short selling of financial stocks for the next three months to increase the stability of financial markets…”

October 28, 2008 Wall Street Journal: “Japan Cracks Down on Naked Short Selling: Tokyo: Japan moved Tuesday imposed new restrictions on so-called “naked” short selling of stocks…”

November 14, 2008Australia bans naked short-selling: CANBERRA: Australia moved to slap a permanent ban on the most controversial form of short-selling yesterday amid an historic fall in share prices, part of a crackdown that is also targeting hedge funds and credit rating agencies.”

November 21, 2008 – The Financial Times: “Regulators to discuss short selling rules: Global securities regulators will gather on Monday to discuss rules on short selling and disclosure of credit derivatives, the head of the US Securities and Exchange Commission said on Thursday.”

November 24, 2008 ReutersGlobal regulators focus on abusive short selling

Then, in December, while regulators in the rest of the modern world focused on cracks in their respective settlement system, the SEC switched back to dragging its feet:

December 9 – Reuters: “SEC urged to do more to curb naked short selling

Since then, settlement issues have been at the forefront of discussions of the financial crisis in Europe and the rest of the world.  Germany:  “Merkel sticks to her guns, calls for global market reform: Angela Merkel told a meeting of international financial leaders that the G-20 must work together to reform the finance system. Merkel is pushing for tougher market regulations….” Britain, March 7, 2011: “MEPs vote for ‘naked’ short-selling restrictions”.  European Union: “Merkel, Sarkozy seek EU ban on naked short selling, CDS”. Japan: “Japan to extend naked short selling ban to Oct”. Etc.

Yet in the US, the issue has, once again, disappeared. How utterly odd.

In sum, then,  since 2003 the settlement system which underlies our capital markets has seen problems that disappeared, reappeared, disappeared, reappeared, and disappeared to suit the needs of the Wall Street elite and their handmaidens at the SEC. Initially, in 2003-2004, there were (according to the SEC) no problems in the settlement system worth speaking of. Then in 2004, the SEC passed a rule, Reg SHO, that did nothing of substance beyond drawing draw bull’s-eyes on firms already being manipulated: to do so, they danced within the outer limits of the Administrative Procedures Act, whose purpose is precisely the opposite of the use to which it was put by the SEC. Yet in April, 2005 the SEC explained that the rule they passed had grandfathered the problem “because the Commission was concerned about creating volatility where there were large pre-existing open positions” that until then they had insisted did not exist. Simultaneously, the SEC continued to claim that the problems in the settlement system were negligible and inadvertent, until in June 2005 their own economist, Lesli Boni, showed they were pervasive and deliberate. From 2005-2007 the SEC continued to insist that they were not significant, but fought tooth-and-nail to prevent being released to the public the data that would decide things one way or another. Then in 2008 the SEC suddenly considered it a massive problem requiring an unprecedented emergency regulation to stop it, but just for those Wall Street banks which had for years been enabling it against other publicly traded companies. Then while regulators in the rest of the modern world have spent 2009 -2011 figuring out how to fix holes in their settlement systems, the SEC has switched back to regularly scheduled Muzak on the subject.

The government and Wall Street lawyers who went along for this ride display a mentality best described in this passage from Orwell’s 1984:

“The power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them….To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies — all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.”

But the greatest Truman Show weirdness comes from the rest of us, driving away, listening to the radio.

  1. Keep shining a light on the cockroaches. I work in the casualty insurance biz helping policy holders get their due. I just try to tell the truth.

    2nd VP, Care To Live

      1. Dr. Byrne. Thank you again for not cutting Bobo off in that conference call. Keep up the fight. You have taken this to levels that tin foil hat wearers with an obscure blog site never could have. Been a strange journey through the looking glass. Hasn’t it.

  2. My Truman Show moment was when Refco went public, then something like a month later, went bankrupt, showing $10 billion in counterfeit stock (that’s ten billion dollars at the depressed prices).

    No one seemed to think it was odd that a criminal enterprise like Refco could successfully IPO, then go bankrupt and the regulators and media didn’t seem to care.

    Another Truman moment was when Adnan Khasshogi, relative of Princess Diana’s boyfriend, brought down MJK clearing on September 11, 2001 with actress Valerie Redhorse, Michael Milken’s office assistant. This affected 175,000 customers and was caused by a daisy chain of kited counterfeited shares, yet the media didn’t even give it a mention. You’d think just the coincidence of the date woudl make it newsworthy. Even after this incident and the Refco incident, the SEC continued to take a position that counterfeiting phantom shares didn’t exist, even though the fact directly contradicted them.

    It’s clear to me that there is a trillion dollar criminal cartel that sells counterfeit stock, commodities, debt and other securities to fund their control of the media, governments and the regulators and the world operates much more differently than most people think it does. Why does no one get arrested? Why do both parties support giving tax payer money to bail out the thieves?

    This is a big conspiracy that I think is tied to the whole way our fiat debt based money is introduced into the sysem by a private bankster cartel. The government borrows money and the act of borrowing let’s new money come into existence. The population is taxed to pay interest on this money which is conjured out of thin air by the banksters.

    As you dig into it, you can see this has been going on for a long time. Try reading some of the work by Richard Neys (Wallstreet Gang, etc.) and his Truman moment’s where his jaw literally hung open as mobsters expressed jealousy at the scam that is Wallstreet.

  3. Don’t stop PB. Expose the enablers publicly and brutally. Hurt their pocketbook and image. Though few are aware of your crusade, you’ll help many; all, except for the uber-powerful who perpetrate this diabollical, illegal practice of strategic fails. And try to assist those cases preceding yours all in the cause.

  4. Brusky100…Which one are you…

    This one

    Brusky100 says:
    March 13, 2011 at 12:56 pm
    Keep shining a light on the cockroaches. I work in the casualty insurance biz helping policy holders get their due. I just try to tell the truth.

    2nd VP, Care To Live

    Or this one…

    I’ve never seen more BS and misinformation in my professional life since Three Mile Island.

    First, the explosion was in the turbine building from hydrogen. Actually, hydrogen is used as a coolant for the generator portion of the turbine generator. This first unit is a Boiling Water Reactor. The reactor containment is such that most of the RADIATION is most likely tritium which not as dangerous as fission products which are contained in the uranium dioxide fuel
    rods. Heat from decaying fission products are what need to be cooled and are being done so with flooding of the reactor core in its reactor vessel. The other reactor is a mixed oxide core containing plutonium. This is a metal that does decay with an alpha particle that cannot penetrate a piece of paper. It’s danger is from inhalation which is probably not even out of the system reactor core, but in the fuel pellets.

    The first unit is 40 years old and is toast anyway.

    Remember, news media wants to create SCARE so you will watch their channel so their ADVERTISERS can be seen. $$$$$

    Bruce, BS, MS, Nuclear Engineering, University of Florida, Professional Engineer, Nuclear Engineering

    On another note…Patrick, as always, thanks for the effort.


  5. Thank you Patrick for keeping the issue alive…although it is real hard to KILL…Overstock and CMKX share some of the same problems and have both worked tirelessly to overcome the obstacles placed in our way by lobbyists and crooks alike…or maybe they are one in the same…keep up the good work and we may have a better market/world some day…Flying Moose(

  6. Patrick,

    Well done as always. I think that what’s becoming more and more obvious is that until a cathartic event involving the buying-in of all FTDs on the books of the various corporations under attack is mandated by Congress then the various regulators and SROs will continue to stay in “cover up” mode instead of shifting into robust provider of investor protection mode. By definition, you can’t provide robust investor protection until you voluntarily take yourself out of “cover up” mode and you can’t take yourself out of “cover up” mode until the archaic FTDs are dealt with.

    Until this catharsis occurs the readily sellable share price depressing “security entitlements” that have been credited to the accounts of those buying fake shares will continue to MANIPULATE share prices downwards. This is because of the MANIPULATION upwards of the “supply” of that which by law (UCC-8) must be treated as being readily sellable whether they be legitimate registered shares or mere unregistered and invisible “security entitlements” denoting failed delivery obligations.

    Until the buy-ins occur, the price “discovered” by the price discovery process which should involve an unmanipulated “supply” variable interacting with an unmanipulated “demand” variable to “discover” an unmanipulated share price will remain hijacked. Since the level of FTDs poisoning the share structure of a corporation must remain a secret due to its fraudulent nature then all U.S. investors are rendered to be buying a “pig in a poke” when they invest in our markets. The current attitude of the SROs and the regulators that FORCING (via a buy-in) those that have historically refused to deliver the securities they previously sold to finally deliver them so that these trades can finally “settle” as being too harsh of a punishment is unconscionable.

  7. One has to wonder which is the bigger crime being committed in abusive naked short selling. Is it the theft of investor funds by those manipulating share prices downwards by merely refusing to deliver that which they sold or is it the failure of the SROs and regulators to warn investors that the company they are about to invest in has so many “security entitlements” poisoning its share structure that an investment in that company may be already predestined to fail?

    It’s odd how a corporation is mandated to elucidate every tiny little grain of sand of risk associated with an investment in a given corporation in its prospectus yet the DTCC, FINRA and the SEC refuse to notify prospective investors in especially development stage issuers of the gigantic boulder of risk associated with enormous amounts of delivery failures and the share price manipulating “security entitlements” they induce the issuance of. Why don’t these SROs and regulators make these disclosures of such “material” information that they only are in possession of? It’s because of the repercussions associated with tens of millions of U.S. investors suddenly learning that their historical investments in many development stage issuers never did have a chance to succeed. Thus we remain in “cover up” mode and are stuck with the congressionally mandated providers of investor protection overseeing the leading of investors to the slaughter.

    Today’s WSJ reports on how Ernst and Young is being called on the carpet for covering up, from prospective investors, material information as to the damaged nature of Lehman Brothers’ risk levels in regards to their use of “Repo 105” transactions. How much more heinous is it when those covering up the damaged nature of perhaps thousands of corporations (not just one like Lehman) with enormous levels of “security entitlements” are none other than the parties with the congressional mandate to provide investor protection and to “promptly and accurately SETTLE all securities transactions” as per Section 17 A of the ’34 Exchange Act?

  8. Continue to hammer at them P.B. Our voices seem to be lost in the wilderness, but those like yours, Patch, DeCosta, & Shapiro carry weight, far beyond that which we can muster.


  9. And of course, the recent release of the DoD report that 2008 was terrorism. That awful week, there were three articles, one from Ritholtz, one from Cramers’ former boss, the name escapes me, and Patricia at Ravensgate. They all said terrorism. And we know, especially since Dick Fuld came out and said he was being naked shorted, what it was. It was naked shorting. By enabling our own institutions to do it, when the bad guys morphed it, it was unstoppable. I could say it ‘almost’ put us over the edge. But it’s not over yet. It still may.

  10. Interestingly enough, Patrick makes a brief cameo appearance in a recently published book by a legendary intelligence officer and terrorism expert.

  11. I am proud to say I worked with the infamous Mr. O’Brien deluging and also learning the bashers and or journalist.After 10 yrs. I have drawn the conclusion that the existence of market manipulation will never be stopped, EVER, maybe slowed down at times at best. Mans greatest flaw or flaws is greed and dishonesty and there in better place to practise this dispicable human weakness than in the capital markets. The aftermath of financial and market manipulation are beyond our comprehension and the worst part is there is NO ONE who can or want to stop the crimes therefore making it the perfect crime or a literal goldmine if you will until the gold is gone, a sobering thought, for at that point we will no longer exist. I sure miss Bobo and wish he would write the book he often eluded to.
    Thanks as always Patrick,

    1. Markets in many other countries work smoothly, where shorted shares have to be borrowed and everything settles.

      It’s only because the DTCC is in a conflict of interest that counterfeit phantom shares are allowed to bloat the supply and depress the price. The delta in what the market cap. should have been and what it is pushed down to is pure profit to the industry as they are receiving real money for fake shares.

      It can be cleaned up, just as it is in other countries and it can be as simple as every investor calling for their certs. and causing a run on the system.

      I personally like to keep my property in my possession rather than trust an industry that has been proven to be stealing from me.

  12. Stay on them, Dr. Byrne. These miscreants need to pay for their criminal activities. Funny thing is that Madoff is the ONLY one who has been sentenced to prison time. In the “big picture,” he is just a small player.
    Thank you for being the voice of financial reform. That is why I ALWAYS try to find it first at Overstock. It is the least I can do.

  13. Rule 48 halts the requirement for market makers to send pre-opening indications, or bid and ask prices created in auctions used to determine a stock’s opening price. The regulation is used only when the “potential for extremely high market-wide volatility would likely impair floor-wide operations at the exchange,” NYSE Euronext said.

  14. Before you dismiss this guy as a crank, he was Forbe’s Asian head, he did one of the few interviews with David Rockefeller I’ve ever seen and he has a number of interviews with Japanese leaders, including their finance minister.

    The idea is that criminals that raise money through share counterfeiting, are able to operate the levers of power, including military power and they bribe and blackmail politicians.

    Before you dismiss it, think how far fetched it is that regulators allow Wallstreet to sell counterfeit, phantom shares, with no obligation to ever deliver real ones, buy they can still buy their yacht with investors’ money.

    Something funny is going on!

    These crooks are vulnerable to a “run on the bank”. Do what the strikers in Wisconsin are doing. Ask the counterfeiters to deliver the asset to you.

  15. I almost feel sorry for Einhorn:

    (Reuters) – Porsche SE (PSHG_p.DE) shares rebounded on Wednesday as traders brushed off a new lawsuit filed against the German sports car maker by hedge funds in the United States.

    Shares of Porsche were up 0.1 percent at 51.39 euros at 1036 GMT, recovering some of the 10 percent decline they posted over the past five days.

    Several New York hedge funds, including Greenlight Capital LP and Tiger Global LP, have filed a new lawsuit accusing Porsche of causing more than $1 billion of losses by cornering the market in shares of Volkswagen AG (VOWG_p.DE). [ID:nN15280232]

    The lawsuit, filed in a New York state court, follows the December dismissal by a Manhattan federal judge of a similar $2 billion lawsuit filed by hedge funds, including some that sued on Tuesday. [ID:nN30119446]

    There has been some concern in the past that legal issues could scupper a planned merger of Porsche and Volkswagen, but traders said they did not see it as very likely now that any hedge funds could throw the deal off course.

    “There were a lot of them (lawsuits) — why should it work this time?” a Frankfurt-based trader said.

    The hedge funds that filed this latest suit alleged they lost money through a “massive short squeeze of historic proportions” in October 2008.

    They contended that Porsche quietly bought nearly all the freely traded ordinary shares of Volkswagen as part of a plan to take over the company, contrary to its public statements that it had no plans to do so.

    When Porsche revealed its holdings, shares of VW soared, briefly making the company the world’s biggest by market value. This caused losses for hedge funds that had bet on a decline in the stock price.

    Greenlight is led by David Einhorn, who rose to prominence by making a prescient call on Lehman Brothers’ (LEHMQ.PK) accounting problems before the Wall Street bank’s September 2008 bankruptcy.

    Tiger is overseen by Chase Coleman, a disciple of legendary hedge fund manager Julian Robertson.

    Other plaintiffs in the case include Glenhill Capital LP, Glenview Capital Partners LP, Royal Capital Value Fund LP and various affiliates.

    Porsche has so far declined to comment. (Reporting by Maria Sheahan; Additional reporting by Harro ten Wolde; Editing by Mike Nesbit)

  16. Patrick,
    I never could figure out the “driving away listening to the radio” behavior of so many people that knew something. Like hyenas, not wanting to see, too much trouble, not my problem, etc…it’s sad especially when executives at public companies are involved and behave that way. I wouldn’t have believed it before, thinking surely people are more responsible than that. But that behavior has been my Truman moment.

    I am very happy that at least you and a few others do not fit this mold and push back against these destructive forces. Thank you for that,
    Tom Vallarino

    1. Warren Buffet driving away listening to the radio in June 2006:
      WB: As you know, we have a friend who’s been outspoken on naked shorting. I don’t have a great problem with it. If anyone wants to do that with Berkshire, more power to ’em.

      Charlie Munger driving away listening to the radio in May 2006:
      CM: One of the nice things about being an old man in a secure place is that I don’t have to think about many things, and naked shorting is one of them. My jihad calendar is full enough.

      Does anyone else get extremely nauseated watching Buffett and Munger enjoy being coddled by Bethany McLean and Becky Quick?

      The American financial Revolution was ushered in with Patrick spreading some common sense, then riding through the investment and political communities screaming the financial criminals are coming…

      Munger revealed himself to be a Benjamin Franklin in appearance only. What a disappointment.

  17. Good work Patrick,

    I’m sick how these scum get away with this Naked Short Selling,

    I involved in some chinese solar stocks and seems that WS has shorted all of china. I can’t understand some of the best performing stock out there and they lie, fake downgrades world is coming to an end etc stuff. These hedge funds need to be put in prison, No wonder America will not be a place to do business if this keeps going on.

    Stocks I’m in LDK, JASO, TSL, SOL, YGE, STP all very low single digit PE’s, Analysts come out and upgrade them with twice and 3x the value nothing happens then certain analysts come out with downgrade stock fall’s 10-15%. I can understand why some people stay away, but when you believe in a company why should you be shafted by WS scum..

    All stocks have huge short interest showing on reg sho, loads of basher’s on blogs,and paid shil’s and analysts doing hedgies work.

    I have been looking at all the Chinese stocks lately and noticed a similar occurrence across them all. WS not happy with China so the naked short it….

    I know it’s not the only stocks they short, you can see them all over the place..

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