By Brandon Matthews
As outlined in the new blockbuster movie, Stock Shock, which highlights illegal naked shorting and puts a spotlight on a failing Securities & Exchange Commission, President Obama today announced radical new reforms to prevent these market abuses from stealing wealth from the American people. Stock Shock tells the tale of such market abuses and a failing regulatory regime as seen through the eyes of investors in Sirius XM Radio (SIRI).
The President announced sweeping reforms which will overhaul the financial markets and seem designed to protect the wealth of the average American. At times I must admit, it seems as though some of the ideas addressed were taken directly off the pages of Satwaves. Proposals would give the Federal Reserve much broader powers over the financial markets and create a new agency to protect consumers.
Although much of the Presidents address focused on financial institutions rather than American industry in general, it does provide for regulation of hedge funds and closes loopholes which currently allow for the fleecing of America, as they did to investors in Sirius XM Radio earlier this year. From the moment the President announced reforms, Sirius XM stock spiked up 10% as he spoke.
The President’s proposals fell short however, in that they fail to address a major problem directly. Naked short selling, and the reinstatement of the uptick rule. As the movie Stock Shock demonstrates, the only reason that the American financial system was saved, was in the fact that the SEC suspended short selling in bank stocks, which allowed Citigroup (C) for example to grow again. Other industries would seem expendable by current regulations.
Hedge funds continue to fleece the average American investor, and it is my sincere hope that a leader will emerge in Congress to take the focus off of the narrow banking industry and look at the bigger picture. Senator Kaufman of Delaware has made a beginning. Let’s hope he can follow through.
The criminals are afraid. They are afraid of what is to come. It’s time for government to act to punish the these Wall Street Terrorists, who have done more harm to more people than any terrorist group could ever dream of.
Position: Long SIRI
“From the moment the President announced reforms, Sirius XM stock spiked up 10% as he spoke.” Lie
WHITE WIG CONGRESS BETTER PASS THE BILL OR THIER MIGHT BE A SIRIUS CIVAL WAR LOL
THATS A JOKE
@Jon
Does anyone know why Netflix isn’t distributing this movie as of now?
The makers should definitely be getting in contact with them would be my suggestion…
the stock was at .357 at 12:30…that is over 10% gain from open. why so eager to find a lie. Dont get me wrong, I think our pres and his admin are a bunch of morons – but the stock did increase
Naked short selling was certainly part of the problem, but the fact that SIRI never, ever, not once made one penny, AND its total assets = total liabilities. I would argue that in this economic environment, all companies in this position will be hammered.
The author is in the movie and the stockshock.us website linked to this article belongs to the author.
Are you serious? (no pun intended) The 10% jump just might be due to the iPhone app announcement. Sounds crazy? Well, as a day-trader, that was part of my reasoning when I re-bought the stock at $.342, and it’s possible that others think the same way. In fact, the jump coincides with the latest round of announcements that the app will be out tomorrow. That’s just my opinion.
Siri xm will go now . The SEC/FCC and all thier frinds and relatives have loaded up at .05 a share. The uptick ,naked short/short sellers will be taken care of. The hedge funds and others have legally robbed the financials and other stocks through shorting , with the blessing of the regulators. The wealthy ended up with the money at taxpayer and common share holder expense expense . Maybe the people that profited will put the people back in thier homes, and make jobs for them .
sec
… oh yeah. And the announcement of the addition of Toyota and Lexus today didn’t hurt. I really don’t connect any of these dots to the announcements of reform by our president. Otherwise, wouldn’t the whole market be up 10%?
The lie was the spike as he spoke, walked on water and than turned the water to wine.
The fed having more control? Sounds like a plan
I agree w/ iphone app announcement…the stock has been stagnant at .34 for a few weeks which is generally a sign (from what i’ve read – i’m no professional investor) a pop in one direction or another…i picked up another few thousand shares today at .32 and already up 22%
I agree with eddie, iphone app and toyota. The president says allot, but does something different. His speech means nothing.
You’re making me pretty nervous with your claim that shorting should be made banned, and was in fact the savior of the banking industry. From a free trade perspective, if I want to pay someone for the service of being able to sell their stock on the speculation that it will decrease in price and that person is willing to sell, there is no party whose rights have been infringed upon by the trade.
Now, from an economic point of view, I think other people driving a companies stock price down short selling is a great thing! If a company is sound, then cunning investors will buy the stock at a discount. If the company is not sound or not attractive to investors even at the reduced price, then the stock is still overvalued and should be driven lower.
Short selling is just another tool that the invisible hand uses to allow good companies to either buy back stock or develop long term investors, and it serves as a warning to companies that make unsound, risky, or wasteful decisions. If a company can be driven under by short selling, then it has been making horrible decisions and should not be propped up.
@Matt
You need to understand the difference between short selling and naked short selling
@Matt
Wow, who let all the dirtbags in here?
Shouldn’t you all be watching Cramer?
@Matt
Intentionally pounding on a company’s stock in order for you (or your hedge fund with billions of capital) to make personal gain, is not a great thing. Speculation is one thing…pounding corp’s (and their shareholders) for personal gain is another.
Brandon,
Please keep us posted on the re-instatement of the uptick rule. I thought this (some version) was going to be addressed by the end of this month??? Thank you.
Yeah, great report Brandon! I think you are right about the President, and the effects upon the PPS of SIRI as he spoke; Why there are so many sour-folks here disparaging this President, who has done more in 4-months than G.W. did in 8-years (I mean “constructive doing”, not the destruction and waton neglect of the Bush administration!), is a little puzzling to me; Sure, the Iphone App was probably the main driver, but taken all in stride, there was a cumulative effect with the financial reforms the President discussed. Actually, I haven’t even seen or read the proposals, and I find it very dis-heartening and discouraging to not have “naked-short-selling” and the up-tick rule being taken-care-of immediately. In fact, it’s hard to see much reform of the financial industry or general economy, much less consumer protection, with the enforcement of laws designed to diminish the brazen and destructive “hedge-fund-short-sellers” that have reaped huge, windfall profits on the backs of people’s dwindling 401k’s! Man, if the public really knew what is REALLY GOING-ON with the illegal short-selling and hedge-fund impunity, they’d find it hard-to-believe! But people sometimes rather not know such an ugly truth! I guess it’s more comforting to think that “free-and-fair market fluctuations” and such, were the reasons for so much wealth destruction. But the truth is much more perverse and severe!
At any rate, maybe we’ll get there some day soon; Also, I encourage people to watch CNBC’s “The new Gilded-Age of Millionaires/Billionaires”—that’s not the actual name of the show, but it shows how this new crop of billionaires have risen-up, paling the wealth of the old industrialist, or even computer-founder’s wealth, in size and scope! There are literally thousands of USA-Billionaires, and most are “hedge-fund-related”! What is shocking is, “how’d they do it”? The answer is by “controlling wealth, pooling capital, and controlling the Market”! No-one can make the consistent percentage of profits they have made in the Market without “control”. When hedge-funds band together to “make-markets”, they effectively decide to “sell-a-Co.-short-or-long”, or use whatever investment vehicle they decide, all with one caveat, their concentrated efforts and consequent wealth, “control” the direction of their target vehicle! So, when the Market’s were racing toward a bottom from all the mortgage fall-out, they piled-on and exascerbated the ride; Of course, it doesn’t take a crisis for them to gang-up and decided to destroy a stock/Co./individual! They do that under any market conditions, up-and-down!
Ask yourself this if you don’t believe, “how did there get to be some 1,000 USA-billionaires”, almost all hedge-fund-managers, in the last couple of decades? Are they just exceptional traders that figured-out how to “trade-the-market-better”? Therein lies your answer, once you think about this question!
PS: No spell-check or proof-read!
T.WYNN
If you and I,and many others know this corruption is and has been going on for a long time,especially for the last eight years or so.Why aren’t our regulaters!!!!!!!!regulating?
@Jon
you misspelled “then”. and it is rude to say to someone you “it is a lie” even if you know they are lying. Brandon is the only writer i trust when it comes to siri.
SIRI bumped up today because they announced the iphone/touch app would be available tomorrow…any questions?
“At times I must admit, it seems as though some of the ideas addressed were taken directly off the pages of Satwaves.”
Yeah, right after the intelligence briefing, the president and all his staff jump on Satwaves to figure out their regulatory policy. My God, man.
PS. Any word back from Oprah on the Stock Shock submission?
Fair enough…let me justify that statement…a day or 2 ago, I wrote an article. I ended it with a question of why some sould not see the forest. I quipped that it must be those darn trees..
In todays speech, the president used the same basic phrase when talking of market manipulators and regulators…
Brandon, the last sentence nails it. “It’s time for government to act to punish the these Wall Street Terrorists, who have done more harm to more people than any terrorist group could ever dream of.”
@Brandon Matthews
so, as I now understand it, naked short selling is selling something that you do not have to sell. If my understanding is correct, then this always would have been illegal as it is fraud.
but anyway, I still hold the position that there is no action in manipulating a stock that is illegitimate. Further, I still think that hedges aggressively shorting a stock serves a beneficial function: it punishes people that sell just because the price is going down, rather than the business mechanics are faulty. It’s just like selective pressure in evolutionary biology. People experience new situations and the people that learn to look at the fundamentals and future prospects benefit, while foolish traders lose their money and can no longer invest it in wasteful ventures.
oh, and while I may just be a college student, i still put a fairly hefty wager on sirius when it hit 5 cents because I think that the product is good, the exposure is rapidly growing (as more and more car makes are carrying sirius from the factory), there are larger interests that would suffer if sirius failed, and while the management let things come right down to the wire on their credit situation, I still believe that they are making responsible decisions. my 2 cents
Me and a few of my buddies got together last night at the club…we decided your house was worthless. So we all sold it short last night. We got all of your equity. You are left holding the note. Good luck to you!
Thanks Obama!!! This is a President!
SIRIUS (S): the stock is heading for 0.47. If it manages to break up this resistance level, next step would be 0.625.
i bought shares at the rebirth of sirius for .13. i’m going to ride it for a long time to see how it goes.
@Brandon Matthews
Yes, I now know that short selling != naked short selling. Still, as I understand it, the hypothetical action you and your buddies took was fraudulent as you had no product to sell. I don’t see how naked short selling is different from the already illegal action of fraud.
Spiked and then came back down as buyers realized he is just talking more control! More of the same.
There is no question that Naked Short selling is and has been a problem with Sirius and other Stocks as opposed to regular short selling,however, it is only a small part of the problem wit Sirius. Sirius was doomed when they gave the lucrative contract to Howard Stern that consisted of a large amount of Money and Stock. The Stock given to Stern not only diluted the stock on the company but Sirius refused to release the information that determined how much Stock that Stern would receive.Sirius started going downhill at that time and the demise of the Car Industry finished it off. I have Dish Satellite and get a great many Sirius Music channels for free.They are just part of the entire package and I doubt that Dish pays that much for it. Unless I wanted to listen to some of the talk stations on Sirius then why would I get a subscription in my car where I don’t spend that much time.