"That is not the issue with BCIT as Megas has agreed to cover all outstanding shares, naked or otherwise." -- I have struggled to find where you got that from...despite my best efforts, I cannot find it. TM tells me that the DTC asked him to cover FAR MORE that originally agreed too(that given in the filings). This he refused to do, as well he should. That is why we are where we are. In other words, DTC tried to make BCIT responsible for ALL the bogus shares, naked or whatever, not just the ones known to have been 'created' by Pino and entered the DTC repository. I repeat...TM never agreed to cover naked short shares sold by brokers and market makers in the billions. Not only would that be illegal, I doubt it is even possible given the size of ex-clearing transactions that undoubtedly went on.
I'll let you in on a little secret...the system works pretty well if the ratio of IOUs to actual OS remains under 2-3 times. The reason for that is psychology...the odds of more than 30% of SHs calling for certs at any on time is non-existent, so the bluff never gets called. It has been that way for decades. It works pretty much the same way banks operate...they 'print' more money than they have on actual deposit....9:1 seems to be a safe level...we know the ratios are much higher that than in troubled banks. If you look at DTC as a bank, then it all becomes clear. It is run by bankers....and they see themselves as a bank....why wouldn't operate the same way? With BCIT, what they are faced with...is a run on the bank. Why? Because the ratio of IOUs to OS is AT LEAST 250:1 and maybe as high as 2,000:1. DTC does not want this to see the light of day...
....and then there is ex-clearing...broker to broker transactions (that the DTC is 'powerless' to control) that can break them if this trades as it should...a whole other sordid story...
Some sheep are smarter than others.
AI
