Gene -
Read this when you have a moment. Despite all I've heard up to this 22nd day of August, 2000, the following editorial is probably the most ridiculous of all. Can't wait for a new "challenger" to come along, though.
I've highlighted, in bold, the really choice parts.
otcnn.com
Investor Forum: “Blame NASD and Hedge Funds”
By Jack Burney
Published by OTCNN.com
08/21/2000 08:40 AM CST
(Investor Forum is a platform for the free expression of investor opinion, open to everyone. OTC News Network provides background and comments, but the opinions expressed by investors in their letters to Investor Forum are their own and not necessarily those of OTC News Network. Send your comments to jburney@otcnn.com)
Background: The battle against MMM may have overlooked a major player. One investor thinks so, and states his case against hedge funds. He thinks the SEC is irrelevant, and the NASD should be the real target for reform. He notes that the investment industry is the biggest contributor to Congressional political campaigns.
“You may focus too much on the MMs,” says Investor SH, “and they are criminal. The NASD is the real problem. The financial industry is the biggest contributor of campaign money to Congress.
“The big lie is that short hedge funds don’t make money. Every one believes it, but the NASD has been making the short game so efficient. It’s the hottest game in town, and kills the little guy. They know the little guy will get tired and sell in a few months, if they keep the price down, so they can cover their short position. Fundamental investor psychology, or they cover on the margin call meltdown.
“Short the stock and then have it spiked in the media. No way the little guy can get out, and if he is margined, he loses everything. That is the big money maker. The hedge funds are raking in hundreds of millions on every one of these.
“SNRS lost $500 million market cap in a few days last July. The hedge funds have analytical statistical tools to tell them real time, which stocks can be caused to melt down by short selling and negative media.
“The MMs’ ability to sell on the down tick is crucial to the new short game.
“The hedge funds and MMs have real time info based on statistics. Retail investors get old info; they get unreliable volume info. Volume is fundamental info for investing.
There are… “Two different types of NASD members: The old name brokerages are one. The second are the small new private brokerages -- that is where a lot of the criminal MM activity occurs. I’ve heard that the first group has plans to eliminate the second group.
“The system needs to be changed fundamentally, level the playing field, and require transparency.
“An island type trading system could replace the MMs. The NASD has too many MMs, and the only way they can make their quarterly profit goals is to trade against the public. Many hundreds, if not a thousand of MMs are trading the market. No money in honest market making.
“Transparency, eliminating the MMs, eliminating the bogus churn volume, every participant equal, and taking steps to dampen the volatility -- is what the markets need. The SEC is irrelevant,” the investor concludes.
Comment: It is becoming more and more evident that the whole investment industry has been bilking the small investor and trader for many years, and that reform, if it is to be meaningful, must be applied to every aspect. We are all past the stage of shock, and seeking solutions. |
