By Brandon Matthews
It’s as if we have all woken up to find ourselves in the deepest, darkest reaches of the twilight zone. Since the premiere of the movie Stock Shock, millions of people have now begun to ask why, as if no one had been asking before. The reality is that investors have been asking, but it is only until now that those cries of foul have stopped falling on deaf ears.
It has been seven months of inaction by the Securities & Exchange Commission in reinstating the uptick rule, despite promises to the contrary. Illegal naked short selling has been running rampant and the only consequence to the market manipulators that employ such tactics is that the powers that be will provide a bimonthly list of companies that have fallen victim to the practice. Not a single arrest, much less prosecution of any firm or individual involved in the destruction of shareholder value in companies from Overstock.com to Sirius XM Radio (SIRI) has ever occurred. The justification for the delay can be summarized as simply as the S.E.C. at this time, does not think it results in a large amount of theft….just a little grand larceny would seem to be acceptable to them, as long as that larceny is only conducted by certain people, at the expense of certain other people.
Just last week, Senator Kaufman and six other U.S. Senators had to send the S.E.C. a proposal in order to effect change, threatening that if the S.E.C. did not act, that legislation would be introduced that would. Oh Joy! More stall tactics as American and Global investors continue to be fleeced. That was bad, but it get’s worse.
Enter the recent discovery that high-powered brokerage firms such as Goldman Sachs (GS) have developed and use manipulative trading programs that allow for electronic front-running of securities and markets to occur. Where is the S.E.C.? It seems they are nowhere to be found as usual, but will no doubt soon indict yet another known Ponzi scheme operator as a scapegoat for their ineptness. In fairness, the S.E.C. is no doubt staffed with hard working and dedicated professionals who work tirelessly on their assignments. The problem stems from the the top, and that problem now goes by the name of one of President Obama’s biggest blunders, Mary Shapiro.
Bloomberg reports that Chuck Schumer is now pressing the S.E.C. for a ban on these manipulative electronic trading programs. In a statement that can only be responded to with utter disbelief, the outfits that utilize these unfair programs state:
“”Flash orders make up less than 4 percent of U.S. stock trading,” according to Direct Edge and Bats.“
You read that right! It’s justifiable theft in their eyes because it only affects less than 4% of the BILLIONS OF DOLLARS traded on a daily basis on the major exchanges! I wish I had access to know beforehand which companies represented that 4% so I could make a billion dollars or two myself. But alas no, as I and most of you are excluded members of that club.
Bloomberg also reports that this practice has been going on for three years. Ironically, this coincides precisely with the abolishment of the uptick rule that had successfully protected individual investors for 70 years. Within two years of its abolishment, which took only moments to actually do, America and the world find itself struggling on the brink of economic disaster. The only thing that saved the world, was a ban on the short selling of bank stocks, which the S.E.C. also instituted in the blink of an eye.
The S.E.C. is capable of immediate action, and yet the results are clearly inaction. Congress needs to indict the S.E.C.. Mary Shapiro needs to be replaced, rather than warned by elected representatives. It’s time to get a politician out of there and replace her with with someone who actually cares about something other than their political future.
Position: Long Sirius XM Radio
Brandon…couldn’t agree more….very well written…hopefully something will give soon or a lot of folks will go back to Stuff The Matress type mentality. I know for one that I stay more in cash now a days.Just don’t have the trust anymore…The market has always been one sided…but come on this is not at all investor(retail friendly)
I’m really looking forward to Michael Moore’s new movie “Capitalism: A Love Story” this October. I hope he touches on this. It is such a HUGE part of why the economy crashed the way it did. When you lay it out the way you do Brandon, with the timing and how it coincided with the crash it’s very compelling if not downright blatantly obvious. The real scary thing however is the TOTAL inaction by the SEC concerning this matter. These people can’t be THAT oblivious or stupid. Which chills me to the bone, because it can only mean something even more sinister. It’s like a conspiracy theory that is so out in the open it’s maddening that NOTHING is being done. Even average investors saw the connection with the removal of the uptick rule, the naked shorting and the collapse of the economy. How could anyone not see that this illegal unchecked activity was enabling the complete and total bashing down of companies far beyond anything resembling reason. It should have been stopped immediately.
Yes, they banned short selling of banks. And how conveniently evil that Goldman Sachs suddenly became a bank and fell under the protection of the government thus benefitting from the bail outs. And how interesting that they did this AFTER Goldman’s biggest competitor Lehman brothers was destroyed. The whole thing is bizarre. And now they are recording record profits, and laughing defiantly as nothing is being done about their illegal trading software. The F’in balls on these guys are huge. It’s infuriating.
If anyone hasn’t read the Rolling Stone Article by Taibbi, I strongly suggest you google it.
SOMETHING has to be done. It’s beginning to feel like one of those paranoid 70s thrillers were the little guy has no power whatsoever and the hero gets killed in the end. Very bleak. Very depressing. You feel utterly powerless. Even with the internet and Movies like “Stock Shock” and people screaming about this…it still feels like we are pissing against the wind. That our words are falling on deaf ears. The mainstream media is completely oblivious. It’s really scary. Are the powers that be THAT arrogant? That powerful? Can they be stopped? The optimist in me still thinks so.
Thanks for the article Brandon. The SEC is a joke.
I completely agree. Mary must go! We need a go-getter at the SEC. Somebody that is energized, passionate and takes action with a heads will roll attitude. I believe it’s called testosterone. Somebody named Frank, Rocky or Butch will suffice. Mary’s decision making skills are summed up by the rock band Rush — “If you choose not to decide, you still have made a choice”
Schumer knows his job is on the line, but the casino cannot do the bidding of the government without the program trading. After all, if bond sales go really bad for the government I would think that they would want a “correction”, ie scaring folks out of stocks in order to sop up the excess bonds. This government is desperate and I don’t see anyone being able to stop Goldman Sachs. They are literally stealing from the mouths of children and infants. They are Goldman Suchs scum.
Yes, Brandon the audacity of Wall Street comments about this issue is mindboggling. It would take 1 second to reinstate the uptick rule. They dont do it, until the market is back down under 7000 again, or 8000. Then they will do it. LOL If they did it at 12000, I would be floored. So based on past history, the market is way too high right now for the rule to come back. I say it comes back after the market tanks again. Right when its not needed.
And Brandon I will say this again. The market had to correct. Dont blame GS for that. But blame them from profiting on it, illegally. Yes. Market was correcting either way. Had too. Or you dont understand Keynsian Economics. M3 at certain times, must disappear. HAS TO.
Hot potato. This time, most of the worlds banks were caught holding them. GS miraclously avoided a lot of the damage of these secruities going bad. But ironically, sold a ton of them. SOLD a ton of them. Didnt OWN a ton of them. LOL
LOL
What an evil banking system, forget just GS. FED is 100 percent responsible for this. They control the government.
Senator Kaufman blowing smoke up or asses so far. Hes done NOTHING as of yet but babble. I can babble too. Blah blah blah blah. We should do this, we should do that. Hey look , im on cramer. Arent i cool. Are there really congressman AGAINST reinstating the uptick rule tomorrow? If so, lets hear there names. Because last time i checked, legislation to get TARP and all the bailout measures tooks days to get through congress. So I hear blathering, and no action so far.
I will respect my legislators when I see one law designed to protect me, and make my life better, and I feel my government is protecting me from big business’s exploiting the american people illegally. Until I see one law, I have zero respect for any lawmaker. All I see are laws that make me have less freedoms, less control, and less money in my wallet. And it takes months to get a simple uptick rule back, after it never should have been removed, and was in place for 70 years? Exactly…. Heres what I hear from my congressmen…
Blah blah blah blah blah.
Ok, one legislator gets it, but hes only 1 vote. Ron Paul. Like one of 2 people who voted no on the Anti-Patriot Act.
The FBI and CIA fail to do there jobs, and they want US to pay the price. Take away more of my freedoms, because your agencies are so corrupt and backwards, that you couldnt stop the largest plot against americans in history, after warning after warning after warning. The israels told them to be alert. So we lose.
They just popped the biggest ponzi scheme in america.Plus some others.I know things are slow but i believe they have there hands full and things will fall in place in dew time.
The biggest ponzi scheme is the banking system itself. Second biggest is the insurance ponzi scheme. Mafoff is small potatoes, and nothing more than a gesture to fixing the problem. Good for them though. After it failed, they shut it down. Nice.
Brandon,
Excellent article. Highlighting the issues is the way to fight back…since the SEC has been working two speeds for several years…slow and stop. I applaud those trying to force the issue with legislation…but shame on the US Government just the same for it’s total disregard of the General publics outcry.
@relmor2003
Goldman blood suckers were actually short the whole mortgage market when they were creating and selling such products to investors. What a scum of humanity.
So when should we do a coordinated campaign to force their hands i.e. mass e-mails, petitions, phone calls, etc.
I figure if we set a specific date, to give us the most bang for our effort!
All comments and suggestions had a cutoff date of June 19th; now what???
Do they need a year to decide??? …or are they just going to literally sit on them? Make a decision already!!!
How could the SEC police Wall Street when they are Wall Street?
They are controlled by Wall Street, influenced by Wall Street, and manipulated by Wall Street.
Just look at the MAdoff case and you know what happened. Wall Street ignored what was obvious and easily detected. Don’t believe the B.S. that it was to hard to see that it was a PONZI scheme.
All they had to ask was – “SHOW ME THE MONEY” and when he could not, they would have known immediately.
All these ridiculous new products including every ETF you could imagine are in combination destroying the whole system. Who allowed the creation of Credit Default Swaps? CDSs almost put our financial system in shambles.
Gold, Oil, and other commodity ETFs are causing massive price swings in everything on a weekly basis. The world never had these types of moves in OIL or anything else.
SOLUTION: Eliminate all ETFs, if investors want to invest in AMERICA, let them buy the actual STOCK of the companies and not some ETF that does not even track the markets properly. No more GOLD, OIL, or commodity ETFs. Do the poor people of third world nations need to deal with spiking prices in food because of the rise in corn due to manipulation of the OIL ETF? We need to get back to basics, if Goldman Sachs only makes 5 billion a year instead of 20 billion, I think it will all be OK.
BTW: Regarding the SEC and Mary Scampiro. She looks like more of the same to me. Maybe she is Christopher Cox in drag.
thats why no one trusts the govt anymore as they are useless and corrupt-Oh, and im sure they will run the health care industry better too-Terms limits anyone?
Brandon,
You nailed it. This is the Story the World needs to be told. How on earth is this story not all over every TV station is beyond me. I will link story on my twitter. Slowly the movie and your story will come out.
Richard, Narrator – Stock Shock -the Movie
Every employee at the SEC wants to go to work at GS, Don’t bite the hand that one day may feed you big bucks!
Just put the SEC under the supervision of the Dept of Justice, until that is done, nothing will improve at the SEC.
imho
vaporgold
SEC = useless agency = revolving door with brokerage companies = brokerage companies ripping off the public = uptick removed stock market, economy and banks immediately collapse = SEC still does not see the connection OR ARE THEY REALLY WORKING FOR THE BROKERAGE COMPANIES?
SEC Takes Steps to Curtail Abusive Short Sales
http://www.sec.gov/news/press/2009/2009-172.htm
What a difference a day makes!! Thank you Brandon for writing about these issues!!!!!!!!!!
We are so pleased with the reaction by the SEC today. THANK YOU also to the great SIRI investors that have, and are sending your Stock Shock DVD’s in to the SEC. We have been working closely with many in the SEC and we KNOW you made a difference!
Stock Shock has spent every extra penny that has come in for sales to promote the idea that SIRI investors (and the American people) are being fleeced by Wall Street criminals. We deserve protection! This is our money.
We have purchased several national releases, sent hundreds of DVD’s to legislators and media, and appreciate your continued orders…because it is not over yet!
It seems like a long time since the movie came out, but Hollywood movies ramp up slowly and we are right on schedule. Next goal: get mainstream media to recognize Sirius XM as a viable, respectable, and important media entity.
As Relmor says in the movie: the big guys don’t want to make room for another media company and won’t go away easily. Every major social change has started just like this: a few people changing the minds of many.
Please consider supporting our continued effort. It will go to good use.
Sandra Mohr, Director of “Stock Shock-The Movie.”