The stage is now set with Judiciary rebuke of SEC. The hammer is about to fall, connecting all the dots. It won't be pretty.
For the aficionados. A blog. Relevant, but I haven't look around too much. http://o-smear.blogspot.com/
All true. I lived it..... http://forums.auctions.overstock.com/viewtopic.php?t=17841 Read it carefully. Then, decide if Subprime is no big deal. It will expose it all.
"When the Securities and Exchange Commission was created in 1934, it was given the daunting mandate of restoring investor confidence in what was left of Americaâs battered capital markets" Considering the increase in the amount of money, the number of shares, the number of companies, and the increase of on line trading since 1934 it would appear the SEC had done it's job of maintaining investor confidence. To the detrement of the investor confidence, I would say the largest loss of investors confidence was the interent tech bubble, hardly the result of the SEC. Imo, probably a large part of the real estate asset bubble came from disgruntled investors of the tech bust who chose not to re-invest in stocks.
"The New York Times in particular published an article that was so derogatory, inaccurate, and insulting about Mr. Aguirre, that when the smoke clears it will stand for ages as an example of yellow journalism at its worst, and the potential costs it imposes on society." Anyone have a link for this article. I was unaware of this article. I am biased against the times reporting, I like to read yellow journalism.
When I saw this, I said what Senator Craig says when he's on his knees and a naked man is walking toward him......"man, this is gonna be great." Since I've been in this and helped him gather some of the evidence, I believe what you'll see will be earth shaking. It depends on how much he wants to tell, however, " He knoweth that of which he speaks." Pay attention. It is the coup de grace for Mr. Market. http://forums.auctions.overstock.com/viewtopic.php?p=223076#223076 Oh, the coupon is cool. It assures distribution. See, the coupon sites have to pick it up. Herb, Sam, Gary, they have a little link gimmick, so , even though Gary's mother wouldnt read his crap, they fool Google so "naked short selling" gets you his link. What the hell. Buy something.
".......dead men walking", the man tells me, "and they know it." http://forums.auctions.overstock.com/viewtopic.php?p=223125#223125 .
As of today, Overstock.com has been on the Regulation SHO Threshold List for 600 consecutive trading days: http://www.nasdaqtrader.com/aspx/regsho.aspx . According to SEC responses to Freedom of Information Act requests, delivery failures in OSTK peaked at 3,800,172 shares on March 20, 2006. At that time, 3.8M FTDs was roughly 20% of the outstanding OSTK shares and 50% of the effective float. The SEC has fully and officially acknowledge the serious problem of unsettled trades in US capital markets. In a public hearing in July 2006, SEC Chairman Christopher Cox spoke candidly of âabusive naked short sales...which can be used as a tool to drive down a company's stock price to the detriment of all of its investors. The Commission is particularly concerned about persistent failures to deliver in the market for some securities that may be due to loopholes in the Commission's Regulation SHO⦠The need for Regulation SHO grew out of long-standing and growing problems with failures to deliver stock by the end of the standard three day settlement period for tradesâ¦.. Selling short without having stock available for delivery, and intentionally failing to deliver stock within the standard three-day settlement period, is market manipulation that is clearly violative of the federal securities laws.â The SEC has since amended Regulation SHO, most recently to eliminate the notorious Grandfather Clause. The SEC has also proposed to amend Regulation SHOâs so-called âoptions market maker exemptionâ, the likely source of many delivery failures in hard to borrow securities. When a security is hard-to-borrow, market participants can create synthetic short positions by purchasing equity derivatives from options market makers. Those market makers, net long after writing puts, then short an equivalent amount of stock into the market--stock they do not have and may never bother to obtain. Market makers are allowed to fail when they are engaged in "bona fide" market making. But the SEC now understands that much of the hedging in hard-to-borrow securities by options market makers has not been consistent with "bona fide" market making: http://www.sec.gov/rules/proposed/2007/34-56213.pdf âWe are concerned that persistent fails to deliver will continue in certain equity securities unless the options market maker exception is eliminated entirely. We believe that fails to deliver resulting from hedging activities by options market makers should be treated similarly to fails to deliver resulting from sales in the equities markets. The ability of options market makers to sell short and never have to close out a resulting fail to deliver position, provided the short sale was effected to hedge options positions created before the security became a threshold security, runs counter to the goal of similar treatment for fails to deliver resulting from sales of securities and may have a negative impact on the market for those securities.â âIn addition, if the failure to deliver has persisted for 13 consecutive settlement days, Rule 203(b)(3)(iv) prohibits the participant, and any broker-dealer for which it clears transactions, including market makers, from accepting any short sale orders or effecting further short sales in the particular threshold security without borrowing, or entering into a bona-fide arrangement to borrow, the security until the participant closes out the fail to deliver position by purchasing securities of like kind and quantity.â25 25. 17 CFR 242.203(b)(3)(iv). It is possible under Regulation SHO that a close out by a participant of a registered clearing agency may result in a fail to deliver position at another participant if the counterparty from which the participant purchases securities fails to deliver. However, Regulation SHO prohibits a participant of a registered clearing agency, or a broker-dealer for which it clears transactions, from engaging in âsham close outsâ by entering into an arrangement with a counterparty to purchase securities for purposes of closing out a fail to deliver position and the purchaser knows or has reason to know that the counterparty will not deliver the securities, and which thus creates another fail to deliver position. See id. at (b)(3)(vii); Adopting Release, 69 FR at 48018 n.96. In addition, we note that borrowing securities, or otherwise entering into an arrangement with another person to create the appearance of a purchase would not satisfy the close-out requirement of Regulation SHO. For example, the purchase of paired positions of stock and options that are designed to create the appearance of a bona fide purchase of securities but that are nothing more than a temporary stock lending arrangement would not satisfy Regulation SHOâs close-out requirement. ....and the stock hits new highs. Burn in hell. 600 days. Disgusting.
The market maker loop hole is the biggie and as I said back in 05 until this loophole is closed it is a losing battle to try and fight the naked shorts. The fact that it took over a year for the SEC to even acknowledge this is indeed pathetic and disgraceful.