Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: Patchie who wrote (95758)	10/4/2006 11:57:49 PM
From: Jeffrey S. Mitchell	Read Replies (1) of 122087

Could the toxic raid occur if trades were forced to settle promptly? A cyber friend of mine, a VC, who I got to know here on SI, explained to me long ago that he always unloaded his stock through a market maker, not a broker. So when people talk about evil MMs, they are really talking about "evil" insiders using the MMs. Remember that next time you see the same MM seemingly consistently holding the price down. Based on the above, you can see why my theory is that toxic financers never really had to worry about going short themselves. MMs didn't have to worry because they knew the convertible preferred stock could be converted to common to cover their short. Before you get all worked up about MMs, always keep in mind that, in general, all MMs really want to do is zero out their books for the day (i.e. not finish the day long or short). MMs make their money on the spread, so, naturally, they do whatever it takes to spur volume. This is not manipulation; it is part and parcel of making a market. One more reason I don't consider toxic financing as (illegal) naked shorting. - Jeff

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