A Record Number of Buyers Cannot Take Delivery of the US Treasuries that They 'Own'

Jesse's Café Américain ^ | 10/23/08

[AndyJackson]

In case anyone wants to argue, "who knew," the Gold Antitrust Action Commitee must be having a field day with this. They have been arguing that this was going on for years to depress gold prices.

[Toddsterpatriot]

You buy the shares I'm selling. I get your money, and then I'm supposed to ship you your merchandise.

Until you deliver the shares, you don't actually get use of the money.

[Toddsterpatriot]

so instead, I'll just not give them to you and give you your $10 back. I "failed to deliver".

LOL! That's funny. Where did you hear that's how it works?

[HangThemHigh]

Thanks. The ‘everyone shrugs’ part had (and still has) me baffled.

[4woodenboats]

Lots of good insight there. Thanks for the ping.

BTTT

[Wolfie]

That’s happening right now. It won’t be “worse”. It won’t be any different at all.

[Travis McGee]

Is there a better definition of a tottering house of cards?

[Travis McGee]

You may be short selling "hypothetical" shares that you not only don't own, but that don't even exist.

[dennisw]

Why doesn't the SEC enforce the rules better? Enforcing rules on the politically powerful may result in getting hassled from their pet congress-critters.

Chris Cox doesn't have enough staff to enforce even if he wanted to......So the story goes.........
The parties that are addicted to naked shorting (hedge funds and more) are politically powerful enough to keep it un-enforced

[dennisw]

So these “frat boys” have been naked shorting Treasuries?

[PapaBear3625]

Chris Cox doesn't have enough staff to enforce even if he wanted to.....

Cox wouldn't need staff to enforce, if he really wanted to. Just change the regulation so that sellers who fail to deliver by the T+3 date are charged an automatic penalty of double the value of the stock as of T+3 or the time of the trade (whichever is higher). I GUARANTEE that "failures to deliver" will greatly decrease.

Take a look at this comment letter to the SEC regarding Regulation SHO

[Pelham]

To sell short you are first supposed to borrow someone else’s shares.

Naked short selling is selling shares without ever borrowing them. It’s very much like counterfeiting, but the SEC and DOJ haven’t been enforcing the law. This has allowed naked short sellers to get rich as they destroy the companies they target.

[Pelham]

The decision to not enforce the law goes to the White House.