#17 Overstock CEO Dr. Patrick Byrne AS NOSTRADAMUS! (& So Much More)

Includes 3 Shocking Videos. Overstock.com CEO Dr. Patrick Byrne, Congresswoman Marcy (Mama) Kaptur, and Assistant Treasury secretary Philip Swagel sweating through a press conference.

WHEREFORE ART THOU JOURNALISTS!

Wall Street meltdown predicted over 2 years ago. Economic warnings from Patrick Byrne

http://www.youtube.com/watch?v=SIHw7C73s3E
2 minutes 56 seconds

Patrick as Nostradamus - Please take a moment to Digg It Here — Thanks
http://digg.com/business_finance/Wall_Street_meltdown_predicted_over_two_years_ago

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Scroll down for updates

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The Week the World Said “Naked Short Selling”

http://www.deepcapture.com/the-week-the-world-said-naked-short-selling

Please feel free to repost all or part of this everywhere, early, and often. Patrick Byrne encourages all information he and Mark Mitchell write to be duplicated and distributed freely.

More Below

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Let the Grandstanding & Finger Pointing Begin! Better yet, throw all the bums out!

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Come To Mama!

Get Down With Ohio Congresswoman Marcy Kaptur.

She Tells It like It Is.

BANKS RUN HOME TO MAMA AND MAMA WRITES 3 BLANK CHECKS WHILE WALL STREET CROOKS ABSCOND WITH OUR TREASURY!

Video of Ohio Congresswoman

Marcy Kaptur
D-Ohio 9th District Toledo

5 minutes 45 seconds

http://news.goldseek.com/GoldSeek/1222022373.php

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Our assistant Treasury secretary, Phillip Swagel sweats out a press briefing. There was not a lot of journalist interest.

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/03/AR2008070303317.html

Video

3 minutes 17 seconds

Excerpts

Think you're worried about the economy? Phillip Swagel is a wreck.

The assistant Treasury secretary for economic policy, Swagel came out for his monthly economic briefing yesterday, 90 minutes after the Labor Department reported that the country had shed jobs in June for the sixth straight month.

The reporter asked if he saw any hope for economic revival in the new employment report. Swagel exhaled loudly. "No," he said, then sniffed and exhaled again. "You know, the data today, right, we had, wage gains were decent, but of course we know that overall inflation, uh, is going to fully offset and more those, uh, you know, those wage gains," he said. The unemployment rate remained at 5.5 percent, but "I don't . . . take any comfort from that."

Though still forecasting "modest but positive growth," he cautioned that "you're going to still see a weak labor market, so, um, yeah, so it's not, I don't expect to come out next month and, uh, you know, and have great news on the labor market, either."

And with that, the Treasury official departed the room for what one hopes will be some much-needed calm.
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Have smelling salts ready.

I wonder what their salaries and bonuses were.

Germany's "Dumbest Bank" to Press Charges Against Own Staff

http://www.dw-world.de/dw/article/0,2144,3659009,00.html

Großansicht des Bildes mit der Bildunterschrift: The KfW will review all the practices which led to the huge loss

A German bank that handed over 350 million euros this week to bankrupt Lehman Brothers and got nothing in exchange may pursue criminal charges against its own executives, a report said Saturday, Sept. 20.

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The Week the World Said “Naked Short Selling”

by Mark Mitchell — Jonathan Swift prophesied, “When a true genius appears in the world, you may know him by this sign, that the dunces are all in a confederacy against him.” The question is, Will the US turn into Britain circa 1961? Or are there enough cracks in the system that the dawn can break through? As Dirty Harry put it, “Well to tell you the truth, in all this excitement I’ve kinda lost track myself.”

The Week the World Said “Naked Short Selling”

http://www.deepcapture.com/the-week-the-world-said-naked-short-selling

September 19th, 2008 by Mark Mitchell

Make no mistake: what you witnessed this week was not some natural process – an economy “souring,” a bubble “bursting.” This was not the “invisible hand” at work. This was not even capitalism.

This was the premeditated, systematic destruction of market value by an elite crowd of Wall Street cronies who no doubt cackled with delight in the cleverness of their mischief-making. This was sociopathic, criminal behavior on an ungodly scale – the unprecedented, wholesale looting of America.

This was, very nearly, the end of the world as we know it.

Do you think I’m overstating this? Consider that the hedge funds who committed this atrocity employed precisely the same tactics that precipitated the stock market crash of 1929 and the Great Depression that followed.

One of these tactics, as almost everybody now finally realizes, is called “naked short selling.” It involves hedge funds and their brokers selling stock that they do not possess – phantom stock – to dilute supply and drive down prices.

Often, the short-selling saboteurs engage in other shenanigans – whispering scurrilous rumors, oozing innuendo, orchestrating bogus class action lawsuits, deploying armies of Internet message boards to foment negativity, paying seedy “independent” financial research shops to publish distorted analysis, hiring thugs to harass executives and their families, conducting corporate espionage, and instructing government cronies to launch dead-end investigations.

You never heard about this from the mainstream financial media. You never heard it because the market saboteurs were writing the media’s talking points. Some reporters were merely addicts, dependent on the dealers of distortion for negative stories. Other reporters were genuinely corrupt. They thought the market machinations were good fun. “I wanna play, too,” they said. They reveled in taking down companies, and then they asked their short-selling accomplices for jobs.

Our nation’s most influential financial journalists knew that naked short selling was rife. They knew that hundreds of companies had been victimized. They had all the data and they had every reason to believe that billions of phantom shares floating around the system could not be good. But they said naked short selling never happens. They said only bad CEOs and crazy people complain about short seller crimes. They whitewashed the biggest scandal of our lifetimes, and then our markets crumbled.

It was the darkest moment in the history of American journalism.

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In July, the SEC issued an “emergency order” to prevent naked short selling from destroying the financial system. The order required short sellers of stock in 19 financial companies to actually obtain real stock before selling it.

This was hardly intrusive, but the media, copying straight from the hedge fund lobby’s script, said that the SEC should leave the short sellers alone. The emergency order had hurt “market efficiency,” the journalists wrote, though common sense would suggest that a market cannot efficiently set prices when it is bloated by phantom supply. The emergency order decreased “liquidity,” the reporters wrote, though they provided no credible data to support this claim, and failed to explain how a liquid market in phantom stock benefits anyone other than a few hedge fund billionaires.

Even worse, some reporters argued that the SEC should not crack down on naked short selling because short sellers are “vital” sources of negative information to the media. What if some of these “vital” sources are manipulating markets? Criminals, apparently, are untouchable, so long as they dish dirt to reporters. The abomination riles all the more when you know (as I do, having studied thousands of these dirt-strewn stories) that the majority of them contain insinuation, omissions, and outright falsehoods.

At any rate, the financial media convinced the SEC to let its emergency order expire. Even as the markets nosedived, journalists, including CNBC’s Charlie Gasparino, were calling the emergency order “ridiculous,” and the SEC cowered. Within a few weeks Lehman Brothers was gone, Merrill Lynch was gone, Fannie Mae and Freddie Mac were nationalized, and American International Group, a company with a trillion dollars in assets, was trading for a dollar a share and soliciting handouts from the Fed.

On Wednesday of this week, the SEC rushed out new rules that purported “zero tolerance” for naked short selling. According to the SEC, there would now be a “hard” close out rule, requiring hedge funds to deliver real stock within three days of selling it.

Even if the SEC were to enforce a three day settlement, it wouldn’t do much, because the manipulators work like this: A hedge fund tells his broker to sell a million shares of XYZ. The broker doesn’t have any shares, but he sells them anyway. That is phantom stock and for three days it dilutes supply, and eats away at the financial system. When settlement day comes, the broker asks a second broker to sell him a million shares of XYX. The second broker doesn’t have any shares, but he sells a million shares of XYZ (the price now much lower) to the first broker, who uses the phantom stock to settle his initial sale of phantom stock.

When the second broker has to settle, he calls the first broker…and the phantom stock shuffle continues until the falling price makes it impossible for the company to raise capital. Then it’s bankruptcy, the stock is zero, and nobody has to deliver anything.

In any case, “Oooh, weee…‘zero tolerance.’ Really scary.” For years, hedge funds have habitually violated stock delivery requirements, and the SEC has done nothing. Big words didn’t scare anybody. When the SEC announced its new rules, the hedge fund lobby cheered, the media reported the cheers, and the manipulators went hog wild.

By Thursday afternoon, it was looking like Goldman Sachs, Morgan Stanley, and countless smaller banks were on death row. Call this “liquidity.” Call it “market efficiency.” Call it what you like, but it wasn’t good. The meltdown was so severe that traders on Wall Street genuinely believed that Al Queda was taking down the financial system.

More likely, it was the small clique of terrorist hedge fund managers who are most beloved by our financial media. Alas, the SEC panicked. To forestall the end of the world, it decided on Thursday night to ban all short selling of stocks in 700-plus financial companies.

It is a shame that it had to come to that. Short-selling is a legitimate practice, and lots of people do it the legal way. Proper short selling probably keeps the markets honest. If the SEC had cracked down on illegal short selling long ago, the cataclysm would have been averted.

At any rate, maybe now would be a good time for the media to take a closer look at the naked short selling scandal. Stephen Moore, who works for the Wall Street Journal editorial page, said on CNBC that naked short selling caused this week’s turmoil. Why has the Journal not published an editorial expressing outrage?

The Journal’s editorial page, the finest in the country, rightly abhors government interventions, but this is not about free markets. It is about preserving property rights – the basic capitalist tenet that people must own what they sell. It is about stopping criminals.

Aside from the Journal’s editorial page, there is a world of media that has not been compromised by short sellers – a world of good reporters who live far from Wall Street and could be covering this scandal from multiple angles. They need to do so quickly. The SEC will lift its current ban. And if it doesn’t start prosecuting people – if we don’t get a permanent, market-wide, and properly enforced rule requiring short sellers to pre-borrow real stock – then it will once again be open season for hedge fund terrorism, and where our towering financial system once stood, there will be nothing but a gaping, smoldering hole.

Posted in 9) The Deep Capture Campaign, The Mitchell Report |

15 Responses

James Says:
after publication. --> September 19th, 2008 at 9:33 pm I’m sorry for the repeated post, but I think this story is one we need to put in the mainstream media’s faces. Why DIDN’T they cover this story on September 11th, 2001, which tied naked shorting to almost every other scandal at the time?

If the media carried this story seven years ago, the financial system wouldn’t be spiralling down the toilet. They pretend like they are learning about this for the first time, but the SIPF told the SEC what would happen in 2001 when MJK failed if they didn’t fix this.

September 12th, 2008 at 11:14 am

(continued)

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The Sanity Check

by The Easter Bunny

I Hate To Say I Told You So, But...I Told You So.....
	By bobo on 9/20/2008 2:51 AM
In which our favorite holiday rodent points out that plenty of warning of the coming disaster was available, and in fact jammed down the SEC and the media's throat, for years, with no effect.....

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Your Money at Work, Fixing Others’ Mistakes

by Gretchen Mogenson of the NY Times

Published: September 20, 2008

http://www.nytimes.com/2008/09/21/business/21gret.html?_r=1&ref=business&oref=slogin

Excerpts

Now, inquiring minds want to know, whom did we rescue? Which large, wealthy financial institutions — counterparties to A.I.G.’s derivatives contracts — benefited from the taxpayers’ $85 billion loan? Were their representatives involved in the talks that resulted in the last-minute loan?

And did Lehman Brothers not get bailed out because those favored institutions were not on the hook if it failed?

We’ll probably never know the answers to these troubling questions. But by keeping taxpayers in the dark, regulators continue to earn our mistrust. As long as we are not told whom we have bailed out, we will be justified in suspecting that a favored few are making gains on our dimes.

A.I.G.’s financial statements provided a clue to the identities of some of its credit default swap counterparties. The company said that almost three-quarters of the $441 billion it had written on soured mortgage securities was bought by European banks. The banks bought the insurance to reduce the amounts of capital they were required by regulators to set aside to cover future losses.

Enjoy the absurdity: Billions in unregulated derivatives that were about to take down the insurance company that sold them were bought by banks to get around their regulatory capital requirements intended to rein in risk.

Got that?

Which brings us to Item 2 for policy makers. Stop pretending that the $62 trillion market for credit default swaps does not need regulatory oversight. Warren E. Buffett was not engaging in hyperbole when he called these things financial weapons of mass destruction.

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The "protected 799 financial corporations"

Many of these companies have NO product and are really just compensation schemes for the employees with those at the top receiving billions in this taxpayer bailout ponzi scheme with the triangle pointing downward. When do they add Overstock.com and Dendreon.com, and the hundreds of other illegally naked shorted companies who DO have products, who employ people that actually work, and who don't just spend their days selling people stuff they woul be better off without. Why don't they bail out the companies doing scientific medical research, that are trying to better mankind. The market makers sell counterfeit shares to longs, and then sell the fake shares to illegal shorters, to pressure the stock down, to try to force a bankruptcy, acquisition, or just keep stepping on the stock for years by daytrading the stock keep the price in a range where they can keep reaping profits while draining any value in the stock. They collude with others to further pressure the stock. Them that don't make NOTHING destroy those companies that DO, and now they will get bailed out for it to reap further destruction on the world.

Some of the Countries participating in no longer allowing short selling of the protected 799 "financial" companies.

Add the United States and Britain.

List of foreign countries imposing short ban

Canada
http://www.financialpost.com/most_p....html?id=808295

Australia
http://www.theaustralian.news.com.a...4-30538,00.html

Germany
http://www.reuters.com/article/euIp...LJ8304820080919

Taiwan
http://www.reuters.com/article/rbss...TP9840320080921

Dubai
http://www.arabianbusiness.com/5316...t-selling?ln=en

France, Portugal and Ireland
http://www.reuters.com/article/mark...J34096520080919

The Netherlands
http://www.guardian.co.uk/business/feedarticle/7815585

Eqypt (first debut)
http://dailystaregypt.com/article.aspx?ArticleID=16624

Considered "illegal" prior to the worldwide ban...
Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates (UAE). Known as GCC countries

http://www.thenational.ae/article/2...7740393/-1/NEWS

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U.S. Treasury Widens Scope of Plan to Buy Bad Debt (Update1) 

Excerpt

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYXtwpG9mw9g&refer=
homeU.S.%20Treasury%20Widens%20Scope%20of%20Plan%20to%20Buy%20Bad%20Debt%20(Update1)

Sept. 21 (Bloomberg) -- The Bush administration widened the scope of its $700 billion plan to avert a financial meltdown by including assets other than mortgage-related securities.

The U.S. Treasury submitted revised guidance to Congress on its plan a day after first submitting it, as lawmakers and lobbyists push their own ideas. Officials now propose buying what they term troubled assets, without specifying the type, according to a document obtained by Bloomberg News and confirmed by a congressional aide.

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http://www.independent.co.uk/news/business/news/fury-at-25bn-bonus-for-lehmans-new-york-staff-937560.html

Fury at $2.5bn bonus for Lehman's New York staff

By David Prosser
Monday, 22 September 2008

Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.

The revelation sparked fury among the workers' former colleagues, Lehman's 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.

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Hedge fund posts 'for sale' sign on internet

Excerpts

http://www.efinancialnews.com/assetmanagement/index/content/2451789446

A once-discreet hedge fund has posted its own version of a lonely hearts message on the internet, saying it would like to meet people to buy parts of the business and provide it with extra working capital.

Shane Rodgers, managing director of Signal Capital Management, posted a message on an industry website today seeking an "investor or a trader" to take a "small ownership stake" in the multi-strategy hedge fund firm adding that it was seeking another to provide a "small amount of working capital".

. . .

Signal Capital's seeking of a stakeholder in its business comes as investment banks and other financial industry firms have bought stakes in hedge fund management firms. Investment bank Goldman Sachs last year launched the Petershill fund, which has since bought stakes in at least five hedge fund managers including London's Winton Capital Management, Capula Investment Management and Longacre Fund Management.

Morgan Stanley has acquired either stakes in, or the entire companies of, at least seven hedge fund managers since 2006, according to data from Jefferies Putnam Lovell. Merrill Lynch and Lehman Brothers have taken three stakes each, while Citi has bought one management firm.

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I think a better solution is to restrict short and naked short selling (which is already illegal but not enforced) of stocks, in every stock EXCEPT the "799 chosen ones". Retail. Bricks and mortar. Places where people actually make a product and sell it, instead of crooks in suits counting our money as they deposit it into their own private accounts.

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Enter the rabbit hole here --------------------> http://www.DeepCapture.com

To enter our $75,000 "Crack the Wall Street Cover-up!" contest read to the bottom of this story.

The Columbia School of Journalism is our nation’s finest. They grant the Pulitzer Prize, and their journal, The Columbia Journalism Review, is the profession’s gold standard. CJR reporters are high priests of a decaying temple, tending a flame in a land going dark.

In 2006 a CJR editor (a seasoned journalist formerly with Time magazine in Asia, The Wall Street Journal Europe, and The Far Eastern Economic Review) called me to discuss suspicions he was forming about the US financial media. I gave him leads but warned, “Chasing this will take you down a rabbit hole with no bottom.” For months he pursued his story against pressure and threats he once described as, “something out of a Hollywood B movie, but unlike the movies, the evil corporations fighting the journalist are not thugs burying toxic waste, they are Wall Street and the financial media itself.”

His exposé reveals a circle of corruption enclosing venerable Wall Street banks, shady offshore financiers, and suspiciously compliant reporters at The Wall Street Journal, Fortune, CNBC, and The New York Times. If you ever wonder how reporters react when a journalist investigates them (answer: like white-collar crooks they dodge interviews, lie, and hide behind lawyers), or if financial corruption interests you, then this is for you. It makes Grisham read like a book of bedtime stories, and exposes a scandal that may make Enron look like an afternoon tea.

By Patrick M. Byrne, Deep Capture Reporter

The Story of Deep Capture

NEW! Download the Story of Deep Capture in .pdf format.

By Mark Mitchell, with reporting by the Deep Capture Team

Introduction - by Mark Mitchell

I began working on a version of this story in January 2006, while serving as an editor for the Columbia Journalism Review, a publication tasked with upholding the standards of the American media. In November 2006, a hedge fund that was at the center of the scandal I was investigating offered the Columbia Journalism Review a great deal of money. Shortly before CJR accepted the money, I left my job, so I do not know if my editors, whom I believe to be honest people, would have allowed me to persevere. But I have no doubt that the hedge fund’s “beneficence” was aimed at preventing the publication of stories like this one.

And it might well have succeeded if Patrick Byrne had not approached me with an idea. Why not combine forces and spearhead a whole new approach to investigative journalism? Most media content is produced by rumpled journalists (i.e., people like me), working alone under tight constraints. Deep Capture could be something different - a power team circumventing the traditional media and pushing limits to uncover the truth.

When I entered the picture, this team had already established that a small number of law-breaking hedge funds had put the American financial system at risk of collapse. Indeed, the hedge funds are employing the same tactics that contributed to the stock market crash of 1929 and the Great Depression that followed. If you want to understand the current turmoil in our financial markets, you could do no better than to read the material in Deep Capture: The Analysis.

The lengthy (40,000 word) story that follows should help you to understand how - and why — Patrick came to embark on this project. I am the author of the story, and attest to its accuracy, but it benefits substantially from the work of the Deep Capture team: freelance researchers, bloggers, gonzo computer hackers, economists, and even a one-time foreign intelligence agent.

Some mainstream journalists will not like this story. They will perhaps disapprove of our methods or decry the advent of vigilante journalism. But most of all, they will not like this story because it is largely about them - a tale of reporters who seek to be players, but instead become pawns - a tale of prominent journalists who help cover up a massive financial crime while toadying to some of Wall Street’s slimiest operators.

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And it all starts when Patrick Byrne gets a phone call from the Easter Bunny. Really, that’s what the guy calls himself - the Easter Bunny - and he talks like the Bee Gees on fast forward, a nasally frantic falsetto, on and on about some kind of conspiracy involving big time Wall Street operators, the Mafia, and a bunch of famous journalists. Somebody’s got to stop these people, the Bunny says, or the American financial system is going to come crashing to its knees. Also, the bad guys might put a bullet between the Easter Bunny’s ears.

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Links To Previous Now Public Submissions by Rory Kearney
# 1 — Naked Shorts — $75,000 For Cracking the Wall Street Cover-up 7116 views , #2 , #3 , #4 , #5 , #6 , #7 , #8 , #9 , #10 — Overstock CEO Patrick Byrne Carpet Bombs Wall Street & The Media on the Don Harrold Show (Video) , # 11 —I AIN'T LEAVIN' TILL THEY THROW ME OUT! , # 12 - Back To Back , #13 — To Catch A Rat — Illegal Rumor Mongering at its Lousiest , #14 — Are They Going To Arrest The Sith Lord , Just Say Yes. The FDA Ties That Bind. A Saturday Morning Rant , #15 — No Penalties for Financial Rapists! - Overstock CEO speaks on Naked Short Selling , #16 — Got Lipstick? Some Pigs Are More Equal Than Others ,

Everything I write is my opinion. If I have made any factual errors, please notify me, and I will correct them.

Patrick Byrne encourages all Deep Capture information he and Mark Mitchell write to be duplicated and distributed freely.

NEW! Download the Story of Deep Capture in .pdf format.