Posted on 08/25/2010 12:40:27 PM PDT by unspun
In shocking news, the New York Times cites figures that investors withdrew $33.12 billion from domestic stock market mutual funds in the first seven months of this year when billions of dollars should have been expected to be flowing in.
The New York Times blames this unusual development on “economic uncertainty.” One explanation is that the financial reform bill pushed by President Obama and passed by Congressional liberals was a complete fraud. The bill failed to protect invested capital, did nothing to stop the devaluation of our homes, and didn’t reform Fannie Mae and Freddie Mac, the government-sponsored mortgage entities involved in the financial crisis.
As Accuracy in Media has consistently reported, the basic problem is that the regulations that protected investors and their capital were removed, beginning in 2007 under the George W. Bush Administration, and have not been restored.
Zubi Diamond, author of Wizards of Wall Street, has released a new YouTube video highlighting what needs to be done and how the nation got into this predicament. He has focused attention on the notorious hedge fund short sellers who brought on the 2008 economic and financial crisis that paved the way for Barack Obama’s election as president.
These short sellers, such as George Soros, made billions of dollars betting on the collapse of the subprime mortgage industry as ordinary Americans lost their savings.
“They subverted our capitalist system economy in order to achieve a regime change in America. They looted the country and visited financial violence on the American people. American families bear the brunt of the destruction of capitalism and the installation of socialism in their country with job losses, home foreclosures, and retirement portfolio wipe-outs,” Diamond charges.
The major media, he said, have concealed the truth about what has happened from the American people.
He explained, “Most Americans cannot even imagine the fact that this calamitous crisis was deliberately engineered by enemies and traitors within our borders.”
Diamond urged the media to start educating the public about what is happening: “Most people do not know how capitalism works, in terms of the safeguard regulations which protected our capitalist economy. Once you unhinge and unscrew the nuts and bolts, and tear down the underpinnings and remove the safeguard regulations, you have succeeded in dismantling capitalism and killing the economic engine of growth. They are killing the goose that lays the golden egg.”
In response to the Times article about investors fleeing the market, Diamond said, “Who wouldn’t flee the market when you are being robbed every day by the hedge fund short sellers? They are targeting and preying on the small investors. The reality is beginning to sink in as more people and more people realize that the economy is in terrible shape, and it is not going to recover.”
A recovery is possible, Diamond said. But the Congress and the President have to restore the regulations that “protect the invested capital that is needed to create jobs, and to protect the value of our homes and assets. You must restrict short sale transactions, end mark to market accounting completely, restore the old circuit breakers, and restore the old uptick rule to their original condition without any modification.”
His recommendations include:
Diamond explained how the looting and destruction of the economy have occurred. “To short sell a stock is to sell a stock you do not own. Such a transaction should be governed by a regulation, designed to protect the owners of the stock, their assets and invested capital. That regulation which governed short sale transactions is called the uptick rule or short sale restriction rule.”
He added, “The Managed Funds Association (MFA), the association of hedge fund short sellers, successfully lobbied regulators and policy makers to remove that short sale restriction requirement, meaning they now have the government’s approval to sell what they do not own unrestricted, when they know very well that selling what they do not own is stealing. The only difference is that they are stealing with the approval of the government.”
“Our stock market is a broken market,” Diamond added. “There is no investor confidence because the invested capital is not protected. There is no uptick rule, no circuit breakers and no trading curb. There are no legal protections for the capital. There is no capitalism.”
The stock market, he said, has become “a money manufacturing factory. The commodities being processed are the small investors, retirement portfolios, and mutual fund investors.”
As a result, the small investors are experiencing diminishing returns and losing their appetite for risk.
The Times should explain to its readers the real reason why investors are fleeing the stock market, he said.
“Our publicly traded companies can now be held hostage by the hedge fund short sellers as they continue preying on investors,” he said. “They can evaporate any of the publicly traded companies in short order. They demonstrated that capability in the ‘flash crash’ of May 6, 2010, when they drove down the stock price of Accenture (ticker symbol CAN) from $44 per share to one cent per share in a 15-minute time period.”
The SEC is supposed to be an independent regulatory body to protect the integrity of the market but it is under the control of the Managed Funds Association. “They have rigged and primed the market for manipulation,” Diamond said.
In the past, ordinary Americans could analyze the market and individual companies and invest accordingly. Today, the situation is different.
“Without the short sale restriction regulation, the fundamental attributes of the companies are rendered useless,” he said. “The effective use of technical analysis has been nullified. When it does seem to work, it can be used by the hedge fund short sellers to manipulate the market as they set traps for investors at each fulcrum, resistance or support levels.”
He explained, “You have a market that is very difficult to trade or invest in. This is a market that can do anything, reverse, go up or down, or reverse again with increased volatility as the manipulators are on a search mission, preying on small investors, searching for investment capital to steal.”
Diamond compared the stock market to a Las Vegas casino, where the house always wins. The MFA is the house in today’s market. “They own the stock market and the stock market police—the SEC. Everything is stacked against the small investors. They operate with impunity.”
Diamond said the hedge fund short sellers use various techniques to accomplish their insidious goals. These include “dark pools,” in which their transactions are concealed from the public; flash orders; front running; insider trading; and collusion. He explained, “They raid companies at will, shorting stocks fearlessly without an uptick, colluding to determine the direction of the market. They trade fearlessly without risk, and they transferred all the fear, and risk of investment losses and capital losses to the small investors, regular investors, retirement portfolios and mutual funds.
As if the situation wasn’t bad enough, the so-called financial reform bill which Diamond warned against but passed the Congress exempts the SEC from the Freedom of Information Act.
“The documents that I was available to see to help me write the book Wizards of Wall Street will no longer be made available to the public or journalists. The SEC will now only release documents to the Congress and the courts. The MFA made sure that its lap dogs at the SEC are shielded from scrutiny and criticism as they cooperate with the agents of George Soros in destroying America and capitalism.”
Cliff Kincaid is the Editor of Accuracy in Media, and can be contacted cliff.kincaid@aim.org
Please reply or FReepmail, if you want on or off this list.
Please ask your candidates and politicians The Three Sovereignty Now Questions.
The “Summer of Recovery” is soon to be followed by the “Fall of America”
Wouldn’t that be, “the Winter of our Discontent?”
Invest in precious metals: copper, lead, brass.
“They subverted our capitalist system economy in order to achieve a regime change in America. They looted the country and visited financial violence on the American people. American families bear the brunt of the destruction of capitalism and the installation of socialism in their country with job losses, home foreclosures, and retirement portfolio wipe-outs,” Diamond charges.
The major media, he said, have concealed the truth about what has happened from the American people.
I’m sure a tingle goes down the magic muslims leg when he hears this news....
Talk about a generic headline. When hasn’t a financial expert somewhere warned of economic collapse?
???? who has these billions?
Congress was controlled by the Demoncrats in 2007.
Well, as a matter of fact, the Bush administration does certainly share the guilt.
But CRA was put into place by Jimmy Carter and put on steroids by Bill Clinton.
And the Glass-Steagal act was repealed by Bill Clinton.
Clinton did it on purpose. I frankly think that Bush was a bit of a dope about some things, notably the economy. He made a big, big mistake putting Paulson in charge at the Treasury, because Paulson was basically an agent of the Democrats.
Didn’t realize that Diamond was a type of nut...
Please put me on the list.
US Said Preparing New Laws To Seize Americans Retirement Accounts
http://www.eutimes.net/2010/08/us-said-preparing-new-laws-to-seize-americans-retirement-accounts/
_____________________
My take: I hope this is just be an ugly rumor. But it couldn’t get any traction without that kernel of doubt people have about this Congress and this administration.
Much of the public also knows the market is rigged by hedge funds.
Lead...
Well, it better collapse soon or else the Republicans will be blamed for ‘holding up the work of the people’ come Jan 2011.
Video now in, at Gulag Bound (it’s a commercial for the book).
Cliff Kincaid promotes the work of Zubi Diamond (kind of like how some of you and I have promoted James Simpson’s) and is to be commended for it.
We should be paying attention to Mr. Diamond’s work.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.