Naked short selling question

Discussion in 'Trading' started by bidask, Jan 24, 2009.

  1. bidask


    i still don't understand how phantom shares are created when a naked short sale happens. here's the scenario.

    a hedge fund naked shorts 100 shares of Company A at $10 per share. the buyer of these shares is a mutual fund.

    a few days pass and the hedge fund needs to deliver the shares.

    why can't the hedge fund deliver by simply buying 100 shares in the open market? where are the phantom shares in this case?
  2. Trust me when I tell you, we're a lot closer to the end of this than anyone outside of the loop appreciates.

    I've sent out a couple of feelers -- you know, the ones that, you won't get a direct answer, but you'll get an answer to confirm what you believe, all sources considered?

    the SEC is about ready to roll over like a dog that peed on the rug. This cover up got a ton of them beautiful high paying positions. I'm just tired of being on the bottom.
  3. Illum


    If this were about to be to over, how to trade in front of it?

    Short covering rallies? Or will participants just take loses? How do you "fix" this situation.
  4. Hopefully the Government has taken advantage of the opportunity, grabbed the financial institutions by their collective balls and forced them to write down these fraudulent transactions.

    My outsider's educated guess says the whole reason for the short ban was to control bogus short transactions, not to kill legitimate short selling. There was just no way to stop one without stopping the other.
  5. I've been talking to PM's. What stocks are the hedge funds looking for ? Then, I scan for volume, especially low priced stocks. But with ex clearing, they are into everything. Look for stocks heavily shorted,and the setups that come with them.

    I heard that the buy ins are being met w/fails, so you still have some time. But today, for the third time, I heard about this mystical '2000 point rally'. These are Street guys, big guys. And there is only one way that can happen - technicals. Buy ins.

    On the particulars, look at Palm. You think that phone was that good? IDCC was a big SAC short at one time. It's pretty isolated now. So you have to be diligent. But, if you see pigs flying, you'll know why.

    Maybe scan low priced bios. They are primed for manipulation. Always needed money, you know. So, they'd be shorted into the face of raises, and they really don't cover.

    Hope that helps.

    I'll give you a name, I have no position, I'm just waiting. DCTH. Stock has doubled, and guys are looking for stock to borrow. You just have to wait. I am afraid, though, they all come at once. I was hoping I could pick the bastards off one at a time.

    And also, think about this. At one time, we worried about DC not being willing to put the brokers and hedgefunds under. They can't survive a massive call in. However, it appears the worm has turned. VW/Porsche show the wilingness of governments to kill hedgefunds. Here, a lot of folks have already been destroyed, or have gotten out. All that really is left is a shell. So, if you kill the funds, who is going to cry, when the market goes up. I think even the Dems know it's good for the Dow to rally. News flow is softer, News Anchors cheer up.

    Now, a couple years ago, Vodiagroup hypothesized that a cover would make the market go up 10%: that 's how deep this is. If that were to happen, you make pension funds (those not exposed to hedgefunds) healthy. So you wipe out some Wall Streeters and hedge funds. That, all of the sudden, is politically popular, isn't it? Like the snake in the road - the skid marks come after, then the car backs up, and runs over it again.

    If you look at joe Bruno today, via the NYPost, he was bribed, it is alleged, to lead Union Pensions to Wright Investors'. Amazing! Now, you know Madoff was in a couple of Unions. And you now how the sell side works - you bribe an insider or two to lead you to the promised land. A CNBC guy said "dozens' for madoff's Union victims, and that's not out yet. So, you can see the damage yet to be reported, and there will be no mercy when it comes.

    Another point is, O'Bama has 6 months. Maybe three. In whatever period of time he has, the next day this is his problem. So, I think, the politician he is, he blows it up now. "look, I fixed what George Bush screwed up." I sure would.
  6. Read Arthur Levitt's book, "Taking on the Street" The situation is complex.
  7. Levitt's reputation is in the drink. PM was telling me he sat on some boards with Levitt, and he does nothing but drain companies. Worthless. And, A lot of this happened under his watch. Read Den of Thieves. Harvey Pitt represented the bad guys. How can we get well recycling the same dreck?

    New Deepcapture tonight or tomorrow, and it's about a week overdue. Should be a really doozy. We're getting a ton of hits, inquiries from law enforcement. We've got to stop this. It may be too late, but this little club has got to be shut down.

    There will be indictments. They will be big names.
  8. Have you read his book? It could be all smoke and mirrors by a corrupt former SEC chairman, but there was some insight in that book. With so much money involved, the political forces are pulling and pushing the SEC in every direction imaginable.
    #10     Jan 24, 2009