Naked Short selling: The Story of Deep Capture

[Green_Bear]

It is also important to recognize the role of The Depository Trust and Clearing Corporation (DTCC), an organization headquartered in New York City. DTCC is where stock trades are processed — more than $1.5 quadrillion worth of them every year. That’s 30 times larger than the entire gross product of the entire planet. According to the Wikipedia entry on the DTCC, authored largely by Gary Weiss, the DTCC “streamlines processes that are critical to the safety and soundness of the world’s capital markets.”

Indeed, the DTCC is one of the world’s most important financial institutions. But what the Wikipedia entry does not mention is that the DTCC is one of the least transparent organizations on earth. No joke: America’s founding fathers would take up arms if they knew that anything like the DTCC could exist in this country. There are funds exceeding 30 times global output flowing through a sealed black box that is not understood even by the SEC officials who are supposed to regulate it.

One former SEC official describes his colleagues visiting the DTCC and asking, “So, what is it you guys do here, again?” A former DTCC employee confirms that the SEC would occasionally send junior people, and summarizes their oversight as follows: “The SEC staffers would say, ‘What do you do?’ and ‘How do you do it?’ After we would explain to the SEC folks what the DTCC did, the SEC people would say, ‘OK, are you doing it?’” These meetings would occur about once per year, and take no more than two or three hours. That was the oversight provided by regulators to the sealed black box corporation through which 30 times the economic output of the entire world flows.

Because the DTCC processes every short sale, it knows which brokers have hedge fund clients that are selling stock and not delivering it. The organization also knows precisely how much phantom stock is circulating in at least one part of the system (additional phantom stock is created outside the DTCC, or “ex-clearing”). Yet, perhaps because it is “user owned” - that is, it is owned and operated by the very Wall Street brokerages that sell the phantom stock - the DTCC refuses to release any information.

Meanwhile, the organization leads an energetic public relations campaign denying that phantom stock is a problem. It sics lawyers and a pit bull flack named Stuart Z. Goldstein on journalists who attempt to report on the subject. The few journalists who have managed to secure an interview with a DTCC official describe having to pass through a security cordon of machine-gun wielding guards, X-ray machines, and written questionnaires.

The Story of Deep Capture - by Mark Mitchell
With reporting by the Deep Capture Team
deepcapture.com/

Naked short selling, or naked shorting, is the practice of selling a stock short without first borrowing the shares or ensuring that the shares can be borrowed. Naked shorting is not necessarily a violation of the federal securities laws, and can contribute to market liquidity, but is illegal when it drives down stock prices

en.wikipedia.org/wiki/Naked_short_selling

[treora]

@Green Bear

deepcapture.com/ Naked short selling

eek, I just watched that horror movie. Death by TLAs (three letter acronyms CDOs, CDSs and now NSSs. It is like walking along a pebbled beach and stubbing your tow on a large rock releasing a nasty crab. In shock you step back and lean on a 6’ boulder. Then it moves…

[Stingy_Buyer]

it used to be called, “manipulation” and was also called “illegal” until Wall Street captured the SEC, at which time it became known as, “a hedge fund business model”.

Ordinary retail investors cannot win when playing against insiders. The markets are owned by and run for the insiders. When they make some losses they dump it in your pension fund. Its a dirty business.

[Stingy_Buyer]

Heres the link to the multimedia presentation.

deepcapturethemovie.com/

Opened my eyes big time. Of course no surprises that Rupert Murdochs New York Post is a major player in the rip-off.

[the_edge]

Great find, Green Bear.

[Bill]

after listening to that deep capture movie…it just so reminds me of the whole Irish property market with everybody from the govt,journalists,estate agents,prop developers, banks, bank economists etc involved in the conspiracy(sp)

[Stingy_Buyer]

Another good article about the Patrick Byrne naked short selling conspiracy here.

[What_Goes_Up]

[gvideo]https://video.google.com/videoplay?docid=4490541725797746038[/gvideo]

[labasta]

He he he. Green bear, you save me a job of posting any interesting titbits from itulip on the propertypin.

Keep it up.

[labasta]

Actually, now I remember it, one of the itulip posters mentioned a few months ago somthing similiar which could tie into this. It was a presentation on bogus shares, or the fact that trading is electronic so it is open to scamming. Let me see if I can find it.

Found it. Here it is:

businessjive.com/

It is quite long, but worth it. I kind of got lost halway through and had to track back, but it’s good.

[labasta]

I can’t get the link to work for some reason.

I just googled it and it seems the flash presentation is by the same guy Patrick Byrne.

I didn’t put two and two together there

If the presentation comes back on line, it is a much more detailed account of the methodology of how the electronic scams work. It’s good when watched, but it was too detailed for me.

More for the more financially aware itulipers.

[mr_anderson]

To me, naked short selling isn’t a problem.
The problem is the mismanagement of the companies the short sellers target.

Naked short selling is a derivitive of bad management, but the bad management itself is the underlying.

[Nate]

@mr_anderson

To me, naked short selling isn’t a problem.
The problem is the mismanagement of the companies the short sellers target.

Naked short selling is a derivitive of bad management, but the bad management itself is the underlying.

I’d be interested to hear why you think this way. I’m just trying to get a better understanding of Naked short selling.

Nate

[Bostonorberlin]

It wasnt just the short selling,
it wasnt just the short only hedge funds,
it wasnt even just the naked short selling
it was the fails-to-deliver which pulled the rug out from under it all…

bloomberg.com/apps/news?pid=20601109&sid=aB1jlqmFOTCA&refer=home

March 19 (Bloomberg) – The biggest bankruptcy in history might have been avoided if Wall Street had been prevented from practicing one of its darkest arts.
As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year’s peak of 567,518 failed trades on July 30.
The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn’t settle within three days…

men in suits…never trust em

[yoganmahew]

There’s something I don’t understand about that short-selling story (apart from its dubious logic).

32.8 mn shares not delivered does not equal 32.8 mn trades. A trade is a single transation for a number of shares. So what is the minimum number of shares in a trade? I thought it was 100? In which case, 567,518 trades of even the minimum 100 shares = 56.8 mn shares… so the short interest in Lehman had at least halved by the time it went bust.

Or have I got it totally arseways?

[Bostonorberlin]

@yoganmahew

There’s something I don’t understand about that short-selling story (apart from its dubious logic).

32.8 mn shares not delivered does not equal 32.8 mn trades. A trade is a single transation for a number of shares. So what is the minimum number of shares in a trade? I thought it was 100? In which case, 567,518 trades of even the minimum 100 shares = 56.8 mn shares… so the short interest in Lehman had at least halved by the time it went bust.

Or have I got it totally arseways?

Id guess the author made a mistake, and means 567,518 shares not trades fail-to-deliver growing to 32.8m shares fail-to-deliver in the run upto capitulation.

[Septic_Crank]

@mr_anderson

To me, naked short selling isn’t a problem.
The problem is the mismanagement of the companies the short sellers target.

Naked short selling is a derivitive of bad management, but the bad management itself is the underlying.

Naked short selling is a breach of the law, it’s got nothing to do with bad management. Lots of vulnerable fledgeling otherwise healthy companies are attacked by naked short sellers.

Any illegal abuse of the system is a problem. And any abuse which privileges a small minority in the inside is doubly problematic. To me, your argument sounds like a plea for more of the discredited “light regulation”.

[Green_Bear]

**Naked Short Sales Hint Fraud in Bringing Down Lehman **(Update1)
By Gary Matsumoto
bloomberg.com/apps/news?pid= … refer=home

March 19 (Bloomberg) – The biggest bankruptcy in history might have been avoided if Wall Street had been prevented from practicing one of its darkest arts.
As Lehman Brothers Holdings Inc. struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of Sept. 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year’s peak of 567,518 failed trades on July 30.
The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn’t settle within three days.
“We had another word for this in Brooklyn,” said Harvey Pitt, a former SEC chairman. “The word was ‘fraud.’”