The Market - A Bucketshop.

So, a fellow on Bloomberg was talking about Bucketshops this morning.

We modernised ourselves into this ice age.

Wikipedia on the Bucketshop.

Basically, they were businesses on the sidelines that would play bets with customers on the stock market, but were not actually connected to the stock market. It's as if I were to bet someone $50 on LDK to go up, and vice versa, but neither of us would actually ever trade a share of LDK, and certainly we wouldn't be regulated as if we were actually trading in the market. It's very close to what has happened with Derivatives in the last 10 years. A great many of them, Trillions of Dollars had no fundamental basis in any physical ownership of ANYTHING whatsoever. They're side bets, pure and simple, and many of those making the wagers had no ability to pay up in the case of losses. The idea of running bucketshops didn't stop when they were outlawed... it was expressed later by those that led the US Government to deregulate via the Gramm-Leach-Bliley Act, and it was implemented by the "Derivatives Desk."

Of course, the Bucketshop is illegal, but the insideous concept finds its way even into the regulated markets, by way of the DTCC. Is the DTCC just throwing your trades in a bucket in the back room? In some cases, at least, it certainly is; only, we the customers don't ever get to look behind the curtain to see for ourselves. Does the share that my brokerage claims on my account really represent a legitimate link to a physical asset? All I know is what my broker tells me. If my broker were a bucketshop, would it be obvious to me, the customer? Would they admit it?

The DTCC needs to get cracked open. Let's find out what's going on in there. The Investing Public has the RIGHT to know how the DTCC handles their PROPERTY.

New SHO Rules - SEC

http://www.sec.gov/cgi-bin/txt-srch-sec?text=SHO§ion=Entire+Website&sort=rank

Independent on Shorting.

The Big Question: What is short selling, and is it a practice that should be stamped out? From the Independent. Found by Zbuxster of Yahoo.

"If all goes according to plan, the investor is paying less to buy back the shares than it received for selling them. There are some costs involved, notably that the lender charges a fee for loaning out its shares, but in an ideal world the shorter still makes a tidy profit.

There's a variation on this theme, known as "naked short selling" – a form of shorting where the investor doesn't even bother to borrow the shares it is betting against. This is possible because share deals are often not settled immediately. The seller promises to deliver the stock after a short delay – say three days. If a short seller buys the stock back before it has to make good on the original delivery, no shares need actually change hands."



Here's something that I haven't really seen discussed.

When a short seller borrows shares from someone, they have to pay interest on those shares.

What happens if a Hedgie Naked Shorts? Who do they pay interest to? I think the answer is "nobody." They don't borrow shares, they pay no interest. This means that there is an actual financial incentive to Naked Short as opposed to sell a Covered Short. It's cheaper to Naked Short.

Really, I'd think that logically, even assuming that naked shorting were legal, that the naked shorter should owe interest to the BUYER of that FTD. Really, it could be said that the person that sold the share, but didn't deliver, is actually borrowing a share from the BUYER.

Misdirection and lies from Barrons - Naked Short Selling.

Barrons on SEC and Short Selling.


Here's an article on Short Selling from the Magazine that added gasoline to the Fire brought to LDK by Charlie Situ.

This is the Magazine that implied that LDK was the next Enron; the same Magazine that put their readers deep underwater in a short position against LDK of Gigantic Proportions.


They consistantly merge "Short Selling" with "Naked Short Selling," to confuse the uninformed reader, and to preemptively counter the SEC's new regulations on Naked Short Selling. If you read enough Wall Street Media articles on this issue you'll see the same thing, over and over. Liers, one and all.


Check out the following statement from Barrons: "Short-sellers read Barron's with special interest, and they also make good sources of information that our reporters can check and publish if true." LOL! I must say, it would better for everyone involved if Barrons actually had checked their facts on LDK prior to sending Waves of Short Attackers after the Company. Hell, even after LDK has been cleared of the charges, I've not sen any indication that Barrons has acted to correct the record.

Barrons has no credibility; they are the FOX News of Investment Media.

Their commercial states that the average portfolio of Barrons Readers is 3.2 Million Dollars. I'll be interested in seeing the updated stats when LDK and Chinese Solar squeezes them the hell out.