Euthydemus, (My comments PART 1)
This "response" you brought to the board was very revealing.
The most inconsequetial point was the usual message board responses from those who profit by shorting stocks legally or illegally, or are paid or connected in some form with MM's/Brokers/Dealer etc who profit by legally or illegally short stocks. They're a broken record and only serve to lay a larger evidence trail if any investigation focuses on their message board posts. As I've posted it before, I pray they keep doing it.
As for the post itself, I could offer a mini-novel ripping to shreds almost every point this market maker friend of yours makes. To save time, including mine in responding to it, I'll just focus on 3 paragraphs he wrote.
I cannot believe this person typed this:
_______________________________________________________________
"First, market makers are not angels. I have seen a fair number of illegal things. Naked shorting is what we are SUPPOSED to be doing in the face of great demand. Naked shorting in the absence of substantial demand--in other words, to kill a stock, would be market manipulation, and this IS illegal. I have never seen it happen.
Most of the illegal activity I've seen has been when a market maker is working in concert with a promoter. The joke in our office is that, if another market maker calls you and begins the conversation with, "Hey, buddy", what follows will not be a legal suggestion. I have yet to see an exception to this rule.
The notion that stocks are being killed by rampant naked shorting is ludicrous except where there is a floorless or near-floorless convertible debenture. In any event, some firms do not even consider this naked shorting anyway. However, floorless or near-floorless convertible debentures are the source of a lot of selling pressure. But even here the shorting has to be timed so that fails and consequent buy-ins don't occur."
_______________________________________________________________
Ok, like so many like to do, let's go down the list:
He stated:
"First, market makers are not angels. I have seen a fair number of illegal things."
~~Admitting guilt...Confession...Statement made on truth serum...Damning evidence. I don't care how you chose to label these sentences, this person's statement provides just cause AS CLEAR AS I HAVE EVER SEEN to warrant an investigation or inquiry into MM's practices!! The authorities or Dateline would love to talk to this guy.~~
_______________________________________________________________
He stated:
"Naked shorting is what we are SUPPOSED to be doing in the face of great demand."
~~He's on a death-wish right?? Show me the link on the SEC website which states this as a regulatory statute for fair trading. So when a company has great news and buys are coming in at the ask, this Market Maker ADMITS TO NAKED SHORTING as opposed to raising the price in response to the supply and demand of the security (stock). My jaw is dropping to the floor reading his admissions.~~
It gets better...
_______________________________________________________________
He states:
"Naked shorting in the absence of substantial demand--in other words, to kill a stock, would be market manipulation, and this IS illegal. I have never seen it happen."
~~So let's see, he has seen and ADMITS to NAKED SHORTING STOCKS THAT HAVE HIGH DEMAND. Yet so many say that the practice doesn't even exist!! HA
In this statement he unequivolcally admits that naked shorting
IS ILLEGAL, but only in the absense of demand and never happens.
Sir....sir....Let's use your own admission above to go through the EXACT scenerio which happens every day, ALL THE TIME.
First, before I get to the scenerio, I totally and completetly disagree with your ADMISSION AND REVELATION THAT IT IS LEGAL FOR MM'S TO NAKED SHORT STOCKS THAT HAVE HIGH BUYING DEMAND!! NSS is only legal to balance the end of the day books. Yet by the admission of the DTCC's First Deputy General Counsel, Larry Thompson, the fail to deliver is A PROBLEM TALLYING BILLIONS OF DOLLARS...... E..A..C..H.......D..A..Y !!!!!!!!!
Quoting Mr. Thompson from a March 5th interview with the DTCC:
"@dtcc: Just how big is the fail to delivers, and how much of those fails does the Stock Borrow program address?
Thompson: Currently, fails to deliver are running about 24,000 transactions daily, and that includes both new and aged fails, out of an average of 23 million new transactions processed daily by NSCC, or about one-tenth of one percent. In dollar terms, fails to deliver and receive amount to about $6 billion daily, again including both new fails and aged fails, out of just under $400 billion in trades processed daily by NSCC, or about 1.5% of the dollar volume. The Stock Borrow program is able to resolve about $1.1 billion of the “fails to receive,” or about 20% of the total fail obligation."
$$$SIX BILLION DAILY!!!!!!! AND ONLY 20% ARE RESOLVED???????!!!!!!!!!!!
THIS IS A MAMMOUTH DAILY MONEY MAKING MACHINE FOR SOMEBODY ON THE BACKS OF US WHO ARE PEOPLE INVESTING IN GOOD FAITH!
Anyway....about the scenerio I promised:
So, you admit MM's NAKED SHORT STOCKS THAT HAVE A HIGH BUYING DEMAND, but further admit that naked shorting IS ILLEGAL when demand is low. Sir, what in the hell do you think creates a low demand?? By naked shorting a stock when it demand is strong the MM's have entered into a financial trade in which they will profit by the price falling. The MM's themselves HAVE ARTIFICALLY CREATED A DYNAMIC WHICH WILL STALL THE PPS RISE, WHICH IN TURN THWARTS THE DEMAND AND CREATES AN UNWARRANTED SELLOFF!! So now demand is low, and there the MM's sit with admitted naked short positions profited off of this. Wait a minute, I thought MM's having a NSS position in times of low demand was illegal according to you??
The only thing that happens day in and day out is that MM's take illegal naked short positions, and engage in illegal strong armed trading practices to make a freaking HUGE profit day in and day out on our backs whether the demand for any given stock is high or not. Period.
(to be continued)
