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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation? -- Ignore unavailable to you. Want to Upgrade?

To: makeuwonder who wrote (3887)	10/5/2008 11:33:23 AM
From: Hawkmoon	Respond to of 5034

So back to what I was asking. Do you think most of the money they made naked shorting was used for faulty loans? Possibly.. But there was more than sufficient cash available to sustain these lending practices due to Asians and Europeans keeping their cash in the US to avoid repatriating their profits back home (which would have destabilized their favorable currency exchange). But there are so many hedge funds that it's quite likely that quite a few of them were involved. But let's face it, the only ones that matter now are the ones who really piled on their shorts against the US financials since 2007 (when M2M accounting for Mortgage related paper was enforced). Also, with regard to the issue of illegal aliens buying homes, I would agree that maybe they shouldn't have been permitted to do so, but that was state regulated so there are 50 points of failure. However, from my interaction with some mortgage bankers who were involved in that market, my understanding is they were some of the best risks because they always made their mortgage payments (often in cash.. ;0) For them, America represented the first opportunity they'd ever had to own a home. And for them, face the facts.. they took a chance on an investment that they could always walk away from untarnished and return back to their country. Afterall.. if they merely paid rent, it was money down the drain. But owning the house gave them a chance for upside valuation. And this additional demand by them for homes did nothing to depreciate the value of other people's home, especially as real interest rates remained so low. Hawk

To: makeuwonder who wrote (3887)	10/5/2008 1:09:10 PM
From: rrufff	2 Recommendations Read Replies (2) \| Respond to of 5034

makeuwonder - hawkmoon gave a good answer to your questions. I don't know if there is such a direct connection from one scammy area of our economy to another. But, as I often post, where there is an opportunity to scam, scamsters will take that opportunity irrespective of whether long, short, hedged, democract, republican, religious, etc. That's why I find it so hypocritical that our financial press and "cyber-sleupps" are so quick to hop on one scam, say it doesn't exist, and then are so quick to convict small companies at earliest stages of development. If a theory tying scams is to succeed, a light will have to be applied to the DTCC and clearing process. I read many posts about getting certificates or putting stock in cash and IRA accounts, but there is no clarity that says that the clearing process doesn't simply treat lending shares as does a bank. When you go into a bank to deposit, the bank doesn't tell a borrower that he is lending your deposit. There is a commingling. I believe the DTCC, in essence, takes this approach. Enforcement through Reg Sho and its predecessor regulations has been so spotty and with so many loopholes that it has been pretty ineffective. In other words, if the lending program is just making up shares as it goes along, does it really matter if I tell my broker not to lend my shares? Even with the current proposals, the hedge fund and manipulative shorters are bombarding the politicians and lobbying for the loopholes to continue.