NO QUARTER FOR CORRUPTION (Focussing on The Fed./FRBS)

[Telephonics]

The Parallel Universe of the DTCC: “Bits and bytes in book-entry form.”
by Mark Faulk
March 24, 2006
In an article written to convince states and the securities industry to eliminate stock certificates altogether, appropriately entitled “Escaping the Parallel Universe of Paper Certificates”, DTCC Chairman and CEO Jill Considine entered a parallel universe of her own. It was a statement made to underscore an ongoing campaign by the DTCC and SEC to eliminate the only truly tangible proof of stock ownership.


Let’s take a look at Considine’s Cosmic Theory of Parallel Universes. After her “We work in parallel universes all the time” opening statement, she goes on to say:


“In one universe, we’re in a world of high technology with paperless trading and straight-through processing. In this universe, securities are dematerialized. They can be issued, traded, registered, cataloged and stored quickly and electronically. Because they consist of bits and bytes in book-entry form, they’re nearly impossible to steal or destroy. And they can be delivered halfway round the world in seconds.”


Hey, wait a minute. Did I hear that right? Did the Chairman and CEO of the DTCC just say that shares of stock “can be delivered halfway around the world in seconds”? And “they’re nearly impossible to steal or destroy”? That can’t be right. According to the latest Reg SHO list, there are 159 stocks having significant fail to delivers for at least 13 days, twenty-three on the list for over 100 days, and four (Krispy Kreme, Martha Stewart Living, Netflix, and Global Crossing) with significant fail-to-delivers for a whopping 303 days.


But yet, there it is in black and white, or it you prefer, there it is in bits and bytes. Stock “can be delivered halfway around the world in seconds.” Oh yeah, I almost forgot. The securities industry works in parallel universes all the time. In one universe (the one where they want to eliminate paper certificates altogether), they can deliver stock in nanoseconds, but in their parallel universe, they can’t deliver the shares in 303 days (and counting).


While the DTCC and the SIA lobby states to eliminate paper certificates, a shareholders’ task force for CMKM Diamonds (CMKX) has been conducting a stock certificate pull for that company, in an attempt to establish just how many of their shares are real, and how many are simply “bits and bytes in book-entry form”.


To read the rest of this article, and to hear about the 60 Minutes segment (hopefully) dealing with the topic of naked short selling set to air this weekend, go to:


http://www.faulkingtruth.com/Articles/Investing101/1054.html