Congress Critters are doing it again! When 9-11 traumatized the American psyche, we were given an Official Conspiracy Theory to "-splain" it to us. Something about Arabs and a spooky guy named Osama-. But he's not even on the FBI Most Wanted List for 9-11. Our Decider told us a few years back that he was no longer interested in finding Osama. Besides, ole Osama kicked the bucket in December 2001 according to an Egyptian news report.
To obtain some sense of security, many Americans welcomed the USA PATRIOT Act. We let the Congress Critters eviscerate what America was all about--our Constitution and Bill of Rights. Gutted and hung! Our Congress Critters got flimflammed into believing that Iraq had Weapons of MASS Destruction that could blow up in our faces at any moment! We were told that our "sources"- knew the address and zip code. They've given up looking but over a million Iraqis have died along with over 4,000 American men and women. Our lifeblood was drained to pay for a War against Terror!
In the past few weeks we've been hearing that the poor ole banks are falling on hard times. They seemed to have been doing pretty well. They had been getting poor folk to sign up for special mortgages when they didn't qualify for the usual kind. Five years ago I was warning about the predatory lending practices of the mortgage brokers and the banks, and I was showing people how to use the consumer protection statutes. There was an average of about 20 violations of the Truth in Lending Act in every mortgage that we analyzed The Feds didn't like that information made available on the Internet so the Office of the Comptroller of the Currency alleged that my website was perpetrating a mortgage elimination scam. Eliot Spitzer wrote in the Washington Post that the 50 state governors and attorneys general were trying to stop predatory lending, too, but the Feds forced them to stop. They never tried to get me to stop, but a lot of people probably thought the government was right. Intimidation by the Feds worked again.
Back in 1999 Congress Critters voted 450-64 to remove the Glass-Steagall prohibition against banks speculating in high risk securities. Clinton was all for it, too. So the banks took these rip-off mortgages, called them "subprime,"- bundled them together and sold them on the "derivatives market."- And then kept selling them, rebundling them, selling them around the world, making a profit at every turn. Until only a few weeks ago, we were being told that we were not in a depression or even a recession. Then some of those funny mortgages started to fail and things started to get very interesting. Suddenly the leaders started talking nervously about a bailout or the sky might fall. Those bankers are demanding socialized medicine for their sick institutions. They spent a lot of money to get the legislation passed so they could play in this sand box and when they've run out of sand they want mommy and daddy to fill it for them again.
There's more to this "financial emergency"- than subprime mortgages and escalating risk in the derivatives market. The watchdogs of these big brats have been very lenient and indulgent over the years. Naked short selling played a big part in the cause of the last Great Depression. Naked short selling is a bet that the stock will diminish in value, but unlike short selling the naked short seller doesn't deliver the stock that was promised when the short sale was transacted. It's an incomplete transaction, a breach of contract. The result is a "phantom stock"- not too different from counterfeit money and with much the same result. According to some investigators it could cost over one trillion dollars to clean up the phantom stocks that are in the system.
Even though the SEC has admitted that phantom stock can collapse the financial system, it has not moved to stop the sale of phantom stock and naked short selling. They have only placed affected stocks on a list so that investors can see who is being "victimized," -and the stock falls faster and farther. A large portion of the stock in these 300 companies is bogus. It might show up on a computer that you own it, but you really don't. On September 17, the SEC declared that it was serious about enforcing its regulations, but they have been warned and informed about the practice for years and no investigations were pursued.
More than $1.5 quadrillion in stock trades is processed every year through the Depository Trust and Clearing Corporation (DTCC), headquartered in New York City. A very difficult organization to investigate, the DTCC is owned by its users and it's not transparent to the SEC. Every short sale is processed through it and therefore the DTCC would know which brokers have hedging clients selling stock but not delivering. The government knows where the counterfeiters work but never bothers to stop them.
You probably have not heard much of naked short selling or phantom stocks because influential people in the media have been pooh-poohing the complaints of CEOs and investors alike. The money gurus are part of the problem. It's a very sophisticated sting. First the target company gets glowing publicity from one or more money gurus in the media. A corrupt law firm tells its clients to purchase some of the stock so that they can later be named as plaintiffs in a class-action suit against the company. A corrupt hedge fund takes a short position on the stock by borrowing from an investor who holds the stock, then sells the stock and waits for its inevitable fall in price. Fraudulent "research"- that alleges problems within the company is revealed on one or more of the mainstream money shows. For weeks the money gurus allege wrongdoing at the company as the value of the stock drops. The SEC places the company on the list of companies affected by phantom stock, driving the value of the stock still lower. The SEC might even begin an investigation of the company with even greater effect. The shyster lawyer files suit against the company for defrauding his clients and the stock continues to plummet. A stock position opens on foreign exchanges against the wishes of the company because this makes it even easier to flood the market with phantom stock. The short sale is repaid with phantom stock diluting the value of the company's real stock. If the company can be driven out of business, that is the most lucrative outcome for the naked short sale. It's devastating to the investors, employees, related businesses and to the economy as a whole.
So now our Congress Critters are trying to scam you and me by telling us that these shenanigans must be taken upon OUR shoulders. If they don't investigate and prosecute the perpetrators, the criminals will be coming back for more and more.
You best let them know how you feel about that. Right away.
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