CMKM Diamonds Inc. (fka CMKX)

[janice shell]

Speaking of MMs....

To:rrufff who wrote (87313)
From: sks1
Tuesday, Aug 10, 2004  12:30 PM

Midland & RRuff
As an ex market maker who now trades like a wild eyed speculator via Ameritrade with no regard to the burdensome MM regs, I can say that the financial incentive to risk capital in MM'ing is so miniscule now that I believe the MM business will continue to contract and volatility will escalate until investors realize the value that MM's used to provide. Oh sure, we all would like to think that we could just match up the orders electronically and everything would balance at the end of the day.......maybe even outlaw naked shorting, shorting or even margined longs, just have a pure, completely balanced electronic auction market. LOL also maybe we could just "talk" to the terrorists and explain to them how their position is irrational........LOL

And if you sold your 1000 shares of XYZ directly to me electronically and you knew the bad news coming out tomorrow and I could prove it, then I could sue you for not informing me to recover my loss. AND ON AND ON AND ON AND ON. brother...........

I agree with Midland that while the current system is imperfect, it is the best there is and will not be going away any time soon. I also agree with Rruff that times are continually changing and that the current system will have changed significantly 5 years from now.

Over 90% of the MM's in the OTC trading business have left, changed careers, or retired since 2000. The single most acknowledged event mentioned as the primary reason is the day that pricing went from fractions to decimals. When margins were allowed to be cut to 1/10 of a penny the financial incentive models for risking capital in the trading business changed forever. I am not whining nor complaining nor wanting sympathy, just stating the facts! In the five year period from 95 to 2000 that I ran a satellite trading desk for a major OTC securities firm, my FIXED MINIMUM monthly overhead MANDATED by NASDAQ went from about $1500 to over $25,000. Most risk traders assume 100% of risk (losses) and split profits with the underlying broker/dealer AFTER expenses. My variable expenses ran from $25,000 to $100,000K monthly depending on my volumes. Overhead, coupled with the new regulations requiring immediate, mandatory customer order display coupled with decimalization continues to remove market maker liquidity daily with more professional exiting the business. I can do everything I want via cable and a laptop without ANY overhead now!

There will continue to be consolidation particularly during slow times and bear markets. The whiners about short positions continue and technical ignorance abounds. Blaming MM's for manipulation, fraud, and anything else that goes against your position seems to be the national past-time among the ignorant speculators. Countless OTC stockholders believe that the primary reason their stock has gone down has nothing to do with fundamental or rational considerations, but everything to do with market manipulation by MM's. LOLOLOL

For the record for all of the MM conspiracy theorists out there let me state another little known FACT. MM's get short stocks INVOLUNTARILY a vast majority of the time. They don't even know how it happened most of the time!!! There is NO concerted, cooperative conspiracy to short your favorite lousy BB stock in the face of good fundamentals to artificially drive down the price to make money!! LOL I get SOOOOOOOOOOOOOO tired of hearing this crap.

If only they could sit on a trading desk for a day or two and see how handcuffed, restricted, regulated and quite frankly IGNORANT the MM's really are!! Alas, maybe someday when investors realize that without human capital liquidity the marketplace is nothing more than a vacant storefront then the value of human intervention may be more appreciated.

LOL

sks1

http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=20397025