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Naked shorting: The curious incident of the shares that didn't exist (2005)

euromoney.com

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Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#81

Post by erichocean »

arcticbull wrote: post #23
jkhdigital wrote: post #10

The perils of fractional reserve banking can arise in any centralized custodial arrangement. As long as no one performs a physical audit—or there is no physical object to be audited in the first place—then accounting fraud can and will happen. This is, in my opinion, the raison d’etre of blockchain. Public, immutable ledgers are immune to this kind of fraud (although they have other issues, of course).

Fractional reserve banking in the real economy is utterly irrelevant thanks to the FDIC backstopping a run. In the last [edit: 88] years nobody had lost a single penny to a bank run or default including 2008s WaMu default thanks to the FDIC. Crypto fractional reserve like tether has no backstop and that’s a completely different beast. It’s what exacerbated the Great Depression. As with all blockchain unless the state…

> In the last 100 years nobody had lost a single penny to a bank run or default including 2008s WaMu default.

Debasement of the currency, however, has been…high.

So you didn't "lose" that dollar from a hundred years ago, it's just worth about a penny now. Where'd the other $0.99 go?

Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#82

Post by arcticbull »

erichocean wrote: post #81
arcticbull wrote: post #23

Earlier quoted context omitted.

Fractional reserve banking in the real economy is utterly irrelevant thanks to the FDIC backstopping a run. In the last [edit: 88] years nobody had lost a single penny to a bank run or default including 2008s WaMu default thanks to the FDIC. Crypto fractional reserve like tether has no backstop and that’s a completely different beast. It’s what exacerbated the Great Depression. As with all blockchain unless the state…

> In the last 100 years nobody had lost a single penny to a bank run or default including 2008s WaMu default. Debasement of the currency, however, has been…high. So you didn't "lose" that dollar from a hundred years ago, it's just worth about a penny now. Where'd the other $0.99 go?

Another irrelevant talking point.

The whole point of inflation is to encourage investment as money is only worth something as it flows through the economy.

You’re not supposed to save money under the mattress you’re supposed to save value by purchasing assets. A hundred years ago buying roughly speaking any asset would have preserved your entire wealth or created tons of new wealth.

Wages have on average kept pace with inflation.

You keep a small slush fund for a rainy day in a savings account that at least partially offsets inflation and you invest the rest. You don’t save money, you save value. You transact money. If you’re saving money you’re doing it wrong.

This is ECON101.

Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#83

Post by rybosworld »

throwawaysea wrote: post #43

Note that there are a lot of conspiracy theories going around on WSB, populist leftist Twitter, and populist right wing Twitter. For example, https://www.reddit.com/r/wallstreetbets/comments/kr98ym/gme_... With GME there isn’t evidence of naked shorting. There are legitimate ways for shorts to be greater than the float. See https://seekingalpha.com/instablog/6850771-bachhandel/554975... for an explanation

The very high rates of failure-to-deliver on GME are in fact, suggestive of naked shorting.

Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#84

Post by tpmx »

The full article (not just page 1 of 6) is available on the same euromoney.com domain today, but with a different URL:

https://www.euromoney.com/article/b1320xkhl0443w/naked-short...

Perhaps posting an archive.org URL adds a certain mystique, though?

Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#85

Post by dcolkitt »

dalbasal wrote: post #39
nabla9 wrote: post #26

Note: Shorting more than 100% of shares outstanding does not imply that there is naked shorting happening. You can re-borrowing the shares someone shorted and it happens.

It's times like this that common sense definitions of terms like "naked short selling," "market manipulation" and such turn out to be very different from the operable ones.

What is the common sense definition of “naked short selling”?

I’d be shocked if the median American can even define short selling let alone naked short selling?

Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#86

Post by cush »

slashdev wrote: post #7

Wow, how has nobody noticed this before? This looks seriously rotten: > Michigan-based entrepreneur Robert Simpson decided to see what would happen if he bought the entire stock of one company. Using a single broker, within a couple of days Simpson had paid a little over $5,000 for 1,285,050 shares in OTC bulletin board property-development company Global Links. According to Simpson, these shares were delivered into…

Were you able to access the entire article? I can only see page 1 of 6

Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#87

Post by cstrat »

PragmaticPulp wrote: post #42

Recent events have a lot of people confusing high short interest with naked shorting. A stock can have short interest greater than 100% without any naked shorting. How is this possible? The textbook definition of a "short sale" is that someone borrows stock and then, literally, sells it short. The buyer of the stock is free and clear to do whatever they want with the stock, including re-lend it for another short sale…

In addition to the shorts, when people buy call options - doesn't that mean someone else is on the hook to provide shares at a later date, and they might not hold them at the time of selling the option?

Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#88

Post by jrochkind1 »

setr wrote: post #12
anaphor wrote: post #4

Earlier quoted context omitted.

Thanks, maybe a mod can edit the url in the original post?

Especially needed here because the way back link is broken into 6 pages, and page 2 wasn’t captured (didn’t check 3-6, since it doesn’t matter)

Especially because the subsequent info off of page 2 gets increasingly wacky. I hope readers see this and make it to the rest of the article.

It makes me think... okay, the SEC closed that loophole, but the fact that it existed for years show how abstract and weird and unmoored the stock market is, financial games built on as much clouds as ground.

Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#89

Post by gridder »

PragmaticPulp wrote: post #42

Recent events have a lot of people confusing high short interest with naked shorting. A stock can have short interest greater than 100% without any naked shorting. How is this possible? The textbook definition of a "short sale" is that someone borrows stock and then, literally, sells it short. The buyer of the stock is free and clear to do whatever they want with the stock, including re-lend it for another short sale…

http://counterfeitingstock.com/CS2.0/CounterfeitingStock.htm...

Re: Naked shorting: The curious incident of the shares that didn't exist (2005)

#90

Post by tempestn »

LatteLazy wrote: post #49
slashdev wrote: post #7

Wow, how has nobody noticed this before? This looks seriously rotten: > Michigan-based entrepreneur Robert Simpson decided to see what would happen if he bought the entire stock of one company. Using a single broker, within a couple of days Simpson had paid a little over $5,000 for 1,285,050 shares in OTC bulletin board property-development company Global Links. According to Simpson, these shares were delivered into…

His broker lent the stock back out. This is one more way brokers make a living: charging rent for shares lent to shorts.

The broker needs your agreement to lend out stock. Generally that's only part of the agreement for margin accounts, not cash accounts.
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