[The Working Man]

I ran across this and thought it was a well written piece. Mainly in that it involves my BIGGEST pet peeve with the Stock Market.

Naked Shorts and stock price manipulations by the insiders running the Market.

Have fun reading and if you are so inclined drink your Maalox first.

[1rudeboy]

Apparently, you do not realize who Matt Taibbi actually is/i>.

[Reaganite Republican]

Get rid of naked shorts AND the dark pools and that would be most of what’s wrong with Wall St fixed overnight

[The_Reader_David]

I have no objection to naked short selling per se. I do object when the tactic is used by investment bankers or fund managers.

If an investor (by your leave there is no sharp line between investor and speculator) wishes to expose his own portfolio to unlimited losses, that is his own business. If a banker or manager decides to expose others' portfolios to unlimited losses, that is an abrogation of fiduciary responsibility and probably should be subject to prosecution.

[kenavi]

The part you snipped isn't compelling as to your peeve about naked short-selling (what other kind is there?) and that "insiders run the market".

Even with short-selling, as in any transaction, there is a party on the other side who perceives a benefit from the transaction. Why shouldn't he be allowed to do it?

[SueRae]

Yup. Been on the receiving end of naked shorting many times over the years...read th “Dendreon Effect”. By Mark Mitchell.

Patrick Byrne is an American hero, so is Angela Merkel ( she stopped shorting in Germany).

I hope Patrick nails them to the wall.

This is NOT our fathers’ stock market...you have to tread carefully.

[Tublecane]

What is “naked” short selling, exactly, and how is it different from regular short selling? I presume it’s akin to “naked aggression,” or something like that.

[Hostage]

Let’s define terms.

Naked shorting is not shorting.

What is shorting? Shorting is where one borrows shares from another to sell but they must be bought back again and returned to the original owner of the shares.

How does one make money by shorting? One makes money by selling borrowed shares and buying them back cheaper.

______________________________________________________
Paul lends shares —> Peter sells Paul’s shares —> Market

Market tanks.

Market sells back shares —> Peter returns shares —> Paul

Peter has ‘shorted’ the market.

All short transactions are ‘cleared’ through clearing houses.
______________________________________________________

What is ‘Naked’ Shorting?

In the above scenario there is no Paul and there are no shares. Peter just makes up shares out of thin air much like the Federal Reserve creates money out of thin air.

But regulations allow the Federal Reserve and only the Federal Reserve to create money from nothing. Not so with stock market shares, regulations require shares to be real.

So Naked Shorting is a form of counterfeiting and if the big brokers like Goldman Sachs can counterfeit shares to inject into the exhanges, then they can drive a market up and down at will.

Overstock has been after Wall St. and the Naked Shorting issue for a long time because more shares have been shorted against the company’s stock than exist in the first place. In other words certain bankster gangsters on Wall St. have launched short attacks on Overstock.com.

Naked Shorters on Wall St. can launch short attacks on companies and drive them to bankruptcy. Then predatory hedge funds like Romney’s Bain Capital can move in and offer ‘help’ to the victims of the short attack. But ‘help’ means buying assets for pennies on the dollar, lies about assuming debt burdens and taking over cash assets.

It’s a racket for sure and it does involve the mafia who have infiltrated banks and hedge funds. The SEC is bought off. The criminals control the markets and answer only to politicians who tell them to manage the talent pool of High Frequency Traders and to keep the markets spiked for retirement accounts so as not to cause unrest.

[WoofDog123]

this reminds me of the nasd report on nasdaq mm’s from the mid-1990’s. they are pretty blantant about intentionally making ftd’s. wonder if it will get any mainstream financial press coverage.

[wardaddy]

I used to day trade for a living in the 90s

a sizable war chest picking off whatever I could on a full throttle apparatus

screens everywhere actual mini market maker trades.....i think it was a TNT system and I could buy direct from a maker like GSCO or AAH or MSCO or thru SOUS....my only limit was ISDN feed instead of T3 which did prove deadly on the ELOAN ipo pop and subsequent cliff dive

i shorted as much as I went long but I never naked shorted...never even heard of it

naked options yes but I rarely placed options and only thru my broker not as a market buyer myself

but I just read up on it...sounds like a poor practice but i agree with rude....it did not bring down the houses

poor mgt, a very faulty home mortgage market ..mostly from govt crap and leveraged thru derivatives was the biggest culprit..and then it just snowballed

only reason Lehman went down is they were first

these big houses inhabit a universe of their own...and truly are like independent world economies all their own but like the girls they are they run to us to bail them out when they collapse

i hate it...same for the banks

we shoulda let them run their course...no question

what woulda arisen from that woulda have been far superior to now which really is crony capitalism