Replies to post #26414 on One Step Ahead

[PUSH]

Mach:

Very encouraging...

THanks

[Tim71]

Thanks Mach! Did you happen to ask about CMI? Where does it fit into the equation? I am anxious to see how high this CMKX goes! I hope we get the info soon!


Thanks

Tim

[gump90]

You .. I believe, Mach.

Thanks. But then again Urbie was not exactly what you could call a fountain of info. How long is a piece of string ? Or .. try pushing on a rope. LOL.

[wolf2]

Thanks for sharing your call Mach. Most refreshing information we've had in some time.

[Billy9565]

Thanks Mach, Great update. Finally, someone credible talking to UC. That " in a month" has me wondering. It sure beats hearing soooooooooonnnnn!!!

[Gold Monkey]

Thanks for the update Mach, hopefully Urban holds true to his word and doesn't pull a sswh on us, lol.

Tonight I'm so disappointed in SSWH, after doing so much DD on them, I felt very confident that they would succeed, I just don't know how they screwed up. Hopefully somehow they can turn things around.

[Bo14172]

Mach, good post.

Please don't take this the wrong way given UC's surgery over the holidays, but I'm glad there is at least a pulse to the company. Not meant in anyway toward him (I'm very glad he is well!), but they have been withering as each day passes and was leading me to wonder if anything was being done at all.

Although it does seem the inquiry is still in place so the wait will likely be until after it is all cleared up, hopefully soon. And hopefully it WILL clear up. Any negative news from it may take us below where we are now, which is currently nose barely above water.

Good post and here's to a good 2005.

Bo

[joye1]

rbitulsa's post from last night that Mach references in his post.

Posted by: rbitulsa
In reply to: None
Date:1/5/2005 12:55:03 AM


Mach -

further to our earlier conversation...

First, be sure you are familiar with the CNS sub-accounts. You can review this post

http://www.investorshub.com/boards/read_msg.asp?message_id=4842881 or you can review Addendum C of the NSCC Stock Borrow Rules and Procedures

I am of the belief that there are two sets of "naked" shares in play.

1) Persistant settlement failures (naked short shares)

2) Multiple owners of the same share (counterfeit shares) created by widespread manipulation of a flaw in the stock borrow program

IMO, it is very likely, even, that there are more counterfeit CMKX shares than naked short shares.

If this is the case, and if the DTC were to begin a buy-in by forcing cover of the originating settlement failures, then the DTC would be left exposed by the counterfeit shares remaining in the pool, and no more failures to cover them. I proffer that they will do everything within their power to avoid this outcome; while the SEC/DTC has now admitted that persistant fails exist, they have not even come close to admitting the existence of counterfeit shares within the CNS system.

Consider the historic attitude of the SEC/DTC. If CMKX's team has exposed/proven that the flaw exists (and is being abused), and if the SEC is being forced to facilitate the reconciliation of CMKX's share structure (which I think occurred back in May or June), you can be certain that the SEC/DTC will have cleaned up their internal mess, before they force the failures to cover. And you can be certain that the SEC/DTC will let Shorty handle the retail cover, and the DTC will find another way to eliminate the counterfeit shares without paying the "retail penalty".

Now, as to how this might be reflected in the incredibly strange volume we've witnessed, I think it's possible that what we may be seeing is a purge of all the counterfeit long positions held by DTC participants holding CMKX Cede & Co accounts, in particular the C & D sub-accounts of each CMKX/DTC lending member.

To accomplish this, all lender participants of CMKX in the stock borrow program must enter a trade (or a series of trades) for the number of shares equal to that lender's C sub-account share balance. Simply put (lol), the sell side of the trade is the lender's C sub-account, and the buy side of the trade is the lender's D sub-account. In other words, you credit the lender's C account (a contra account) and debit the mark-to-market cash value from the lender's D account.

The lender receives no money for this trade, as it was DTC money in the D sub-account to begin with. [There is another cash transaction involved here, but I will not go into it.] And the lender also loses his right to receive back the "fake" shares he loaned into the pool, thus removing one owner from every share previously held in the aggregate C sub-accounts. Each time you remove an "owner" from a share which multiple owners had rights to, you have reduced the number of counterfeit shares in "the market"; reduced by the same amount of shares (now previously) held in the C sub-accounts at the DTC. And this type of transaction would not place any upward or downward pressure on the pps (other than the pressure from the lender's, who need to transact the trade at or below the marked-to-market value of their "loans"). In this scenario, in effect, no one is really selling, and no one is really buying - a loan has been re-accounted for as a sale, and run through the system to properly affect the accounts in question.

After this purge has been completed, not withstanding the non-CNS failures and the illegal desking trades, there should be a settlement failure for each and every remaining fake share. If/when we reach that point, that is the time when we will see the retail covering we've been waiting for.

Last, I will affirm that I do not believe any solution has to exist in a vacuum. It's very possible that, in addition to the purging of the stock borrow accounts (if even accurate) the company may also be issuing shares to help shorty and the DTC clean up their messes. But I would proffer that any shares provided by the company towards this effort would be LOANED to shorty/DTC, and never sold through the markets at a price well below their real market value.

Disclaimer: Most everything written above is probably wrong - it is presented solely as something to consider.

Note to the DTC: If I am wrong and you have not been purging CMKX’s C sub-accounts up to this point, then I suggest you begin doing so immediately.

http://investorshub.com/boards/read_msg.asp?message_id=5013932

[supatrada]

cmkx: thx Mach! ..

We've heard "close" and Urban's comment about wanting to speak w/ you again. Good stuff to hear. A coiled spring we're on here!

thx again