Naked Short Sellerism
By Gary Swancey
Naked Short Sellerism is the calculated use of manipulation or the threat of manipulation to instill fear; intended to intimidate or to terrorize anyone whose pursuit of goals would severe their financial ideological.
This definition was carefully crafted to distinguish between naked short sellerism and other kinds of legal short selling practices. The act of naked short sellerism is defined independently of the cause that motivates it. Naked Short Sellers employ naked short sellerism manipulation in the name of many excuses. The tendency of Naked Short Sellers to label any opposition as an act of infringement of their rights and financial ideology because they do not approve is erroneous. Naked short sellerism is a specific kind of manipulation.
The definition says that naked short sellerism is calculated. Naked short sellers generally know exactly what they are doing. Their selection of a security is planned and rational. They know the effect they seek and how to obtain it. Naked short seller's manipulation is neither spontaneous nor random. Whereas, naked short sellerism is intended to produce fear, uncertainty & doubt; by implication, that fear is stimulated in someone other than the security, thus the corporate victim. In other words, naked short sellerism is a psychological act conducted for its impact on an investment audience.
Finally, the definition addresses goals. Naked short sellerism is motivated by financial ideological objectives. In a sense, naked short seller's goals are always financial, but similar to extremists driven by religious or ideological beliefs, the naked short seller may be seeking political power to compel society to conform to their views. The objectives of naked short sellerism distinguish it from other manipulated acts aimed solely at personal gain, such as pump & dump manipulation. However, the definition permits including manipulation by organized crime when it seeks to influence government policy for personal gain. Some drug cartels and other international criminal organizations engage in political action when their activities can influence governmental functioning. The essence of naked short sellerism is the intent to induce fear in someone beyond its security victims, to make a government or other audiences change its financial behavior. By destroying financial markets and economic power they can bring about the desired change.
Naked short sellers convince themselves that their actions are legal and justified. Their single-minded dedication to a goal, however well or poorly it may be articulated, renders most legal sanctions relatively ineffective. However, the manipulation is still subject to the rules of law. Sadly, Naked short sellers recognize no rules or laws. No security is immune from naked short seller's manipulation. There are no securities above their manipulation or beyond their reach.
Naked short sellers found that the death of a single security, even a highly profiled security, did not necessarily produce the policy changes they sought. Naked short sellers reacted by turning to an indirect method of attack. Naked short sellers began to attack any and all securities to generate political and economic pressure. These indirect manipulations create a public atmosphere of anxiety and undermine confidence in government regulation (in this case the markets). Their unpredictability and apparent randomness make it virtually impossible for governments to protect all potential security victims with existing rules and regulation. The public demands protection that the regulators must consider in regulating the markets. Frustrated and fearful, the people then demand that the government make immediate changes to stop the manipulation, which is where we are now.
Naked short sellerism offers its practitioners many advantages. First, by not recognizing any security is above their reach, naked short sellers have a wide range of securities as victims. Naked Short Sellers select their security (or securities) and determine when, where, and how to manipulate it (them). The range of choices gives naked short sellers a high probability of success with minimum risk. If the manipulation goes wrong or fails to produce the intended results, the naked short sellers can deny involvement and often exit with little damage to the naked short seller.
As regulators address naked short sellerism, they must consider several relevant characteristics that have arisen. First is that any security can be a victim. Second, manipulations that may appear to be senseless and random are not. To the perpetrators, their manipulations make perfect sense. This is the naked short sellers' immediate objective. Third, the naked short seller's needs to publicize his manipulation. If no one knows about it, it will not produce fear, uncertainty and doubt. The need for publicity often drives security selection; the greater the symbolic value of the security, the more publicity the manipulation brings to the naked short sellers and the more fear it generates. This fear is engendered in a pseudo-respect for the naked short seller; each success enhances the success of the next exercise. Forth, regulators must realize that as each action fails to achieve the desired result, the scope of the next attack will escalate. When individual securities are not enough, they move to massed securities or industries. When that does not achieve the ultimate goal they attack the indices. Then the markets and the economy as a whole are targeted. Finally, regulators planning to address naked short sellerism must understand that they have to protect every possible security all the time. Regulators must also understand that naked short sellers will likely shift from more protected securities to less protected ones. This is the key to defensive measures and those loopholes must be closed.
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