International Writers Magazine: US Finance
Insanity of Allowing Short Selling in a Recession
start by asking a few questions...
Would you send your children to a nursery that was run by cannibals?
Then why allow short sellers to crucify stock prices when they are
at their weakest?
Why does the SEC
allow billionaire short selling Hedge Funds to control the destiny of
troubled companies that sends them into bankruptcy when they may otherwise
be saved given time to reorganize?
Why does CNBC TV and other media outlets give massive time coverage,
in most of their daytime segments, to short selling billionaires, who
explain their propaganda, so that other speculators can follow their
parasitical method of breaking company stock prices systematically down
to devalued levels and many times bankruptcy?
In the same manner as speculative propaganda drove up the price of oil
to an unrealistic price of $147.00 a barrel, so called expert intellectualized
propaganda is driving down stock prices to lower than the book value
of many companies assets. This in turn causes massive layoffs in jobs.
We all know jobs are lost in a recession; however, short selling is
making it far worse.
With leveraged ultra short index fund, ETF's stock prices can be traded
down in double quick time that adds oil to the fire of discontent. Therefore,
it is preposterous to allow short sellers free reign when the USA is
in recession. Surly, it is in most peoples interest to keep companies
in business and employment at the highest level possible so that the
recession can pass by quicker.
The remedy is for the government to immediately step in and demand the
SEC halts ALL short sellers until the recession passes. In addition,
all short positions should be covered within one week. This will send
stocks up 2000 points and put a bottom under the markets. It will also
save the jobs and companies that are now struggling to survive.
I recently enjoyed a French movie titled Avenue Montaigne that
had some profound messages. In one scene, an actor explained to a young
woman that just before the lights goes down she often observes people
scrabbling for an empty seat that is closer to the stage. In their frenzy
to get closer, they do not understand that if they get too close they
will see less.
In the same way the short sellers need to realize the more money they
are making by shorting stocks, the more pain they are inflicting on
the whole of the world financial markets that follow the USA's lead.
Enough is enough and the government senators need to stand up for the
peoples financial assets, moral values and be counted upon to do the
correct course of action to stop short sellers in their vulture like
In the final analysis, this is a great time to be investing in substantial
companies with strong balance sheets, great products, super management
and services and no debt.
o Panic buying or selling always leads to large losses.
o Decisions made by greed and fear will lead to doom laden anxiety.
o If you are still following the advice of the experts who got you into
the confused mess, the doom god may take you to an early grave in double
o There is a switch on the radio or TV that turns it off, discover the
benefits how it works.
o Get out of the habit of listening to the fear mongers.
o Everything good, bad or indifferent passes with time and this too
o In every human being, there is a spirit of love & joy that can
weather any storm in harmonious tranquility and peaceful grace. That
is the only true channel of authenticity to be aware and tuned into.
A simple person understands when enough is enough and never goes hungry
for authentic counseling by a higher power; whoever or whatever they
deem that to be. However, a person who does not know when to stop consuming
will always go hungry for more and more. This type of person will always
be in want and lack the real treasures of heaven and earth.
Stop The Short Sellers
We all know naked short selling is illegal so anyone who does that
will go to jail. So how do we stop the other short sellers from
taking down the stock market. Well, as with most things in life, the
answer is easy once we know how the system works. Most investors do
not realize that their stocks can be lent out to short sellers
if it is a margin (type two) account. A cash (type one)
account cannot be lent out.
There are two types of trading accounts...Type one account cannot be
used by short sellers to borrow against to short stocks as none of the
stocks in that account are on margin. Type two trading accounts
are margin accounts and even though the stocks are not margined
they can be loaned out by brokerage houses to short sellers. Therefore,
I am calling on all stock traders who do not want their stocks to be
used by brokerage houses to loan to short sellers to transfer their
accounts over to none margin accounts. This way short sellers will have
to cover their positions as they will not be able to borrow any stocks
to short, as most margin accounts will be closed. It seems the government
will not help the people, so the people need to help themselves. The
small investor may only be one small drop in a large ocean, however,
when they all act together they can make a difference in the ebb and
flow of how stocks are traded.
Are Financial Institutions and Brokerage Firms Getting the Shares to
Loan to Short Sellers?
I have conducted a survey of many inventors in the stock market who
invest because they believe in the USA's record of excellent returns
in the markets. I did not include speculators who short stocks or investors
who hedge by straddles etc. Out of all the folks I asked, 100% of them
said they would not allow their stocks to be lent out to short sellers.
Most remarked they would have to be insane to bet against themselves
by loaning out their stocks to be shorted. With this in mind I am asking
all investors in the USA to check with their brokers or mutual funds
to find out if any part of their portfolio of stocks are being loaned
to short sellers as they may get a shock.
Also people who put their money into long index Electronically Traded
Funds known as EFT's should be aware that these funds may be used by
the same companies to short stocks, therefore, those who are going long
may be providing the stocks to the short sellers in the ultra short
Here are few other questions, amongst many more, that require truthful
answers from the people that invested have trusted to look after their
interests.... Most investors do not realize that their stocks can be
lent out to short sellers if it is a margin (type two) account. A cash
(type one) account cannot be lent out. Do you think the brokerage houses
should inform their clients if their stocks are being lent to short
sellers? I am told 401k's cannot be used to loan to short sellers. If
this is true where do the big institutions get the stocks to shorts
since most of the money in mutual funds is in 401k's?
ETF index funds that are ultra short or double short are traded every
day. Where do they get the stocks to short since every trade has to
be shorting a large basket of stocks and will effect the price of every
stock in that basket good or bad all go down together? With so many
short index funds why is there no regulations on how many can be traded
because of their massive leveraging, they have the power to take down
the stock market in double quick time. With such fast trades in ETF
short index funds how do we know if all the stocks are available to
shorted as naked short selling is unlawful? Who is loaning out the stocks
to the short index funds? Who is regulating the guests on CNBC many
of whom have ulterior motives to talk down the price of stocks they
have short positions.
By allowing such propaganda they can synchronize their short selling
with other speculators who want to make a quick buck by following the
short selling leaders. This is how the oil price reached$147 a barrel
and the same type of propaganda is being used to try to magnify the
recession into a depression by self fulfilling prophesies.
So called expert intellectualized propaganda is driving down stock prices
to lower than the book value of many companies assets. How come TV anchors
have turned into market mavens who predict the direction of stocks in
one to one discussions with each other? Surely they are on TV to ask
questions and find truthful answers...
Also, to read the news, not give personal negative slants with Perceptions,
Ideas, Thoughts, Suggestions = PITS which many viewers I speak to regard
as programs from hell. Citi Bank has been bailed out once again by the
USA Government. Did any company owned by Citi bank loan out Citi Bank
stock to short sellers to take down their price to $4:00 and thus help
to cause their own bailout? Why does the SEC allow billionaire short
selling Hedge Funds to control the destiny of troubled companies that
sends them into bankruptcy when they may otherwise be saved given time
to reorganize? The founding fathers of America, built up ideas and blueprints
to make it the greatest country in the world. In the past few years,
sharp-witted, educated wizards have devised schemes that first of all
over-leveraged complicated financial instruments. This in turn has fed
the short selling vultures to sell America short and to hell with all
who stand in their way. The greedy few get richer in money but poorer
in spirit, while everyone else just becomes impoverish.
Michael Levy is a professional
optimist, his philosophy of life is one of joyful optimism. He is an international
radio host and the author of nine inspirational books. Michael's poetry
and essays grace many web sites, newspapers, journals and magazines throughout
the world. He is a prominent speaker on health and wellness maintenance,
stress eradication, wealth creation and development, authentic happiness
and inspirational poetry. His new book is titled; "Paradise Graces
A simple Mind."
Levy Nov 25th 2008
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