by Rod D. Martin
September 25, 2008
This poster on the ABC News blog “Political Radar” says it all.
John McCain is right. Fire Chairman Cox, head of the SEC.
I have bought and sold stocks since 1965. I shorted stocks from time to time, covered the stock and never were there any concerns with the market. Then, naked shorts and hedge funds came along and the market was for the big boys. The naked short selling destroyed some companies by driving the stock to essentially no value. A stock needs investors that trust the company and its stock. No one can trust a company when the stock drops and finally sells for 10 cent in the pink sheets.
There are companies that went bust and the naked shorts never did cover the stock. The hedge funds walked away with profits. Ex-hedge fund manager Jim Cramer of thestreet.com told the story of hedge funds. He never admitted to doing any wrong, but as he said, a hedge fund manger could drive a stock to nothing.
Chairman Cox knew of the naked shorts, but did not give much concern to the practice of selling a stock you did not own and did not cover. The big boys ignore the three-day rule. Chairman Cox is a do nothing chairman that only has concerns for the hedge funds and the money he can earn.
Now, the hedge funds managers are crying fowl. How can we make money by trying to predict the market? Well, that is how it is ever since the beginning of Wall Street under a Buttonwood Tree.
John McCain had nothing to do with this financial crisis. Look to Chairman Cox, hedge fund managers and President Clinton’s regulation for lenders. That is where you will find the root of the problem of today’s financial crisis.
We couldn’t agree more, and have been saying so for a long time. From Overstock to Goldman Sachs, the naked shorts have been ruining perfectly sound companies for a long time. The SEC did nothing. This doesn’t account for the whole of the current crisis — not by a long shot. But it’s the essential precipitant of the immediate terror (and genuine financial terrorism), and Chris Cox could have stopped it before it ever began.
Whatever else needs to be done — to Fannie and Freddie and their greedy corrupt execs, to end mark-to-market, to undo the Democrats’ handing out of mortgages as an Affirmative Action program, and yes, even to inject massive short-term liquidity into markets on the brink of seizing up in 1930s style — nothing tops this. Restore the uptick rule, and permanently ban naked shorts. And then enforce the ban. Anything less is criminal negligence, and Russian Roulette with the lives of every American and the people of the world.