Not a Conspiracy–A System

[Pervilis Spurius]

Re: Squeeze

Agreed, but the same goes for the long positions too. How do you figure out who really owns what in "street name"?

Me no likee, long time:mad:

[Pervilis Spurius]

Re: Not a Conspiracy–A System

I'll take the liberty here to link some pertinent information I have handy to try to speed the process of becoming familiar with the FTD issue. I promise not to spam the board with countless links in the future.

The SEC's key points about REG SHO which Byrne cites in the presentation
http://www.sec.gov/spotlight/keyregshoissues.htm

NASAA (state regulators association) held a forum on NSS/FTD last year
http://www.nasaa.org/NASAA_Newsroom/...lines/3923.cfm
you may still be able to get a transcipt at this site

George Bush Jr.'s former SEC Chairman, Harvey Pitt weighs in
http://www.forbes.com/columnists/200...kedshorts.html

The SEC has asked for comments on how it could revise REG SHO which you can peruse here
http://www.sec.gov/cgi-bin/txt-srch-...site&sort=rank

Some notable comments are:
The Governor of Utah (full disclosure: Overstock.com's home state)
http://www.sec.gov/comments/s7-12-06/s71206-191.pdf

The Attorney General of Connecticut
http://www.sec.gov/comments/s7-12-06/s71206-9564.pdf

Robert Shapiro, Former Under Secretary of Commerce under Clinton
http://www.sec.gov/comments/s7-12-06/rjshapiro5967.pdf

[AMaltsev]

Re: Not a Conspiracy–A System

It's been awhile since the last message in this thread. Let's keep in mind the "Dark Side" story and meanwhile consider distribution of dividends to see if this can help us decide, what can and what cannot be true here.

You see, dividends must somehow find a way to the owners of the shares. If some criminal BD issued 'phony shares' (FTDs), and these FTDs become evenly distributed within the system, who will pay dividends on them? There are, in my opinion, just two variants:
1) The 'criminal' BD who issued FTDs;
2) A 'fair' broker which has a client with the FTDs on his/her account.

Will the criminal BD pay the company's dividends? After all, it got a profit from short-selling of the FTDs, so it surely has the means to pay small portion of its profit. But it seems everyone will agree that no, it will not! The whole purpose of the BD's action was to get money, not to give it afterwards away, little by little.

Will the 'fair' broker pay dividends on FTDs to its clients? If yes, then it surely must ask the seller of these FTDs for reimbursement and after not getting the money sue the seller. If not, then the 'fair' broker itself will be sued by the client who didn't get his/her dividends. Have some of you heard of either of these two types of lawsuits?

There is also a possibility (maybe even the probability) that FTDs are issued by miscreant BDs only on the stocks of non-profitable companies which don't pay dividends to their shareholders. But there's also a catch: what if the company all of a sudden becomes profitable and decides to pay dividends? Were I the criminal BD, I'd definitely make sure the company will never become profitable (and this will be therefore the insider's game, thus one more crime).

So, look into the distribution of dividends. Logic says it might be quite safe to own a stock of a company that pays to its shareholders... assuming that the "Dark Side" story is true, of course.

[EJ]

Re: Not a Conspiracy–A System

It's been awhile since the last message in this thread. Let's keep in mind the "Dark Side" story and meanwhile consider distribution of dividends to see if this can help us decide, what can and what cannot be true here.

You see, dividends must somehow find a way to the owners of the shares. If some criminal BD issued 'phony shares' (FTDs), and these FTDs become evenly distributed within the system, who will pay dividends on them? There are, in my opinion, just two variants:
1) The 'criminal' BD who issued FTDs;
2) A 'fair' broker which has a client with the FTDs on his/her account.

Will the criminal BD pay the company's dividends? After all, it got a profit from short-selling of the FTDs, so it surely has the means to pay small portion of its profit. But it seems everyone will agree that no, it will not! The whole purpose of the BD's action was to get money, not to give it afterwards away, little by little.

Will the 'fair' broker pay dividends on FTDs to its clients? If yes, then it surely must ask the seller of these FTDs for reimbursement and after not getting the money sue the seller. If not, then the 'fair' broker itself will be sued by the client who didn't get his/her dividends. Have some of you heard of either of these two types of lawsuits?

There is also a possibility (maybe even the probability) that FTDs are issued by miscreant BDs only on the stocks of non-profitable companies which don't pay dividends to their shareholders. But there's also a catch: what if the company all of a sudden becomes profitable and decides to pay dividends? Were I the criminal BD, I'd definitely make sure the company will never become profitable (and this will be therefore the insider's game, thus one more crime).

So, look into the distribution of dividends. Logic says it might be quite safe to own a stock of a company that pays to its shareholders... assuming that the "Dark Side" story is true, of course.

I extend a personal welcome to our newest member from Russia. I hope you can help us better understand what is going on in Russia.

Current friends there offered us the following advice when we asked their opinion of Kommersant, as we were curious about the authenticity and credibility of a story Kommersant recently published.

Iran Braces for War
February 27, 2007 (Kommersant)

The US Stockpiles Bombs and Allies

Representatives of the five permanent members of the United Nations Security Council, plus Germany, met in London yesterday to discuss means of resolving the Iranian nuclear crisis. Now that Iran has yet again refused to stop enriching uranium, the Group of Six discussed the possibility of introducing harsher international sanctions. If pressure on Tehran does not yield results, the Bush administration does not rule out the possibility of military strikes against Iran. Preparations for that eventuality are apparently already going ahead full throttle.

Meanwhile, according to Kommersant sources close to the White House, the Bush administration is divided between two possible approaches. While Secretary of State Rice continues to insist on diplomacy, Vice-President Cheney believes that diplomatic attempts to convince Iran are futile and that the matter will end in a military showdown that needs to be planned for immediately.

According to Kommersant's sources, Mr. Bush's hand is being guided by the Pentagon, which has requested at least seven to nine months to prepare for military strikes. The development of the plan of attack against Iran's nuclear facilities has reportedly been entrusted to deputy defense secretary Gordon England, who will work closely with US intelligence services and several countries in the Middle East. Assistant secretary of state Nicholas Burns has been charged with attempting to forge an American-European diplomatic alliance that will convince Russia and China to vote in the Security Council in favor of harsh sanctions against Iran. Mr. Burns will also need to secure the consent of the EU for a possible military strike against Iran and to receive a guarantee of technical support, such as fuelling stops and flyover rights for American bombers, from America's allies in the Middle East, which include Jordan, Saudi Arabia, Egypt, and Turkey.

Reuters Photos

Our friends said of Kommersant:

"It has been one of the best, if not the best, Russian newspapers since the very dawn of capitalism in Russia. Although it's now owned by a pro-Putin group, it has, astonishingly, not changed its tone nor gave up professional journalism. One reason is that the newspaper's main audience are educated business people. It's a Russian version of The Economist, but in a newspaper format."

In a related matter, we were forwarded the following yesterday:

Some media suspect foul play in military correspondent's fatal plunge
March 5, 2007 (MSNBC)

MOSCOW - A military correspondent for Russia’s top business daily has died after falling out of a window, and some media alleged Monday that he might have been killed for his critical reporting.

Ivan Safronov, the military affairs writer for Kommersant, died Friday after falling from a fifth-story window in the stairwell of his apartment building in Moscow, officials said. His body was found by neighbors shortly after the fall.

With prosecutors investigating the death, Kommersant and some other media suggested foul play.

Our friend advised us: "Yes, the guy was a retired military, very honest in his writing about KGB/FSB and the military and hence falling out of a window - supposedly trying to wash it. The good news is that, I think Kremlin is running out of plutonium."

Any thoughts you have are appreciated. In any case, welcome.

-EJ

[AMaltsev]

Re: Not a Conspiracy–A System

I extend a personal welcome to our newest member from Russia. I hope you can help us better understand what is going on in Russia.

Thanks, EJ. I'll be glad to help... if you won't try to make me disclose the coordinates of our ICBMs, of course! :-)
And, by the way, I'm not an FSB agent, nor do I have an access to the classified info. One might say, I'm just an average Russian.

Our friends said of Kommersant:

Yes, Kommersant is a serious daily newspaper. I'm sure it may happen that its senior editor won't allow to publish some 'sensitive' article, but if the article does appear, it means the factual base is surely reliable. Kommersant also has many sources in various places and spheres. It's definitely not yellow press. So, on that I must agree with your friend.

Our friend advised us: "Yes, the guy was a retired military, very honest in his writing about KGB/FSB and the military and hence falling out of a window - supposedly trying to wash it. The good news is that, I think Kremlin is running out of plutonium."

Being a Russian I can't agree with your friend it's good news that "Kremlin is running our of plutonium." I prefer we could have plenty of it, because it seems it's the only means of protecting ourselves from USA agression.

(For those who may wonder what USA aggression against Russia I'm talking about, I advise to read a recent article by F.W. Engdahl: http://www.financialsense.com/editor...2007/0218.html).

Alas, I haven't heard of Ivan Safronov prior to his death, so I don't have my own opinion on his articles.

No one says the reporter tried to wash the window (here your friend is joking, ha-ha), but there are rumours he might be pushed to suicide by poisoning. At least Kommersant itself tells the guy's behaviour that day was somewhat unusul and inadequate (I didn't find a translation of this... Russian version is here: http://www.kommersant.ru/doc.html?docId=748362).

That's it, more or less.

P.S. Sorry that my thoughts on "The Dark Side" were not interesting... are they completely off? EJ, aren't there any news on this story?

[jk]

Re: Not a Conspiracy–A System

here's the most readable machine translated version of the death that i was able to come up with:

http://babelfish.altavista.com/babelfish/tr

btw, i assume the "joke" was meant to be "running out of polonium." there's no way the russians are going to run out of plutonium, anyway.

[Pervilis Spurius]

Re: Not a Conspiracy–A System

AMaltsev, RE: dividend payments. I'm not aware of anyone not receiving dividend payments that are due whether they hold shares, FTDs, IOUs, Entitlements, etc.

The difference is whether one receives a "Qualified" dividend or a "Non-qualified" dividend. Generally speaking, the descriptor "qualified" refers to IRS tax treatment of that dividend. These dividends qualify for the current 15% income tax.

A "non-qualified" dividend is not subject to that special IRS tax treatment and is therefore subject to ordinary income taxes.

Non-qualified dividends can come about in a variety of ways:

1. The dividends declared by the company do not meet the IRS rules for "qualified" dividends, i.e. REIT dividends.

2. Your shares have been lent out of your account in which case the short seller must pay the dividend. This dividend is a Non-qualified dividend and should be listed on your account statement as a "Payment in Lieu" of dividend or PIL.

3. You have purchased shares which have Failed to Deliver in which case the market maker / BD must pay you a PIL.


There is a fascinating piece of audio by Arne Alsin, the portfolio manager of the Turnaround Fund, given at a conference in LA sponsored by Patrick Byrne. Alsin talks about these very issues.

http://www.stpadvisors.com/Audio/STP2006Oct/Clip_7.mp3

It takes about 10 seconds from the start of the file before Alsin starts speaking, so the link is good.

So, no, your comments are not uninteresting!

[AMaltsev]

Re: Not a Conspiracy–A System

btw, i assume the "joke" was meant to be "running out of polonium."

Ups... I thought, the joke was on "washing the window". I admit, much funnier one is on polonium! :-)

[EJ]

Re: Not a Conspiracy–A System

Thanks, EJ. I'll be glad to help... if you won't try to make me disclose the coordinates of our ICBMs, of course! :-)
And, by the way, I'm not an FSB agent, nor do I have an access to the classified info. One might say, I'm just an average Russian.

The quality of your writing, and the fact that I read somewhere that you have a PhD, do not give the impression of an "average Russian," or an average anyone, for that matter. Your self-description is accepted as honorable modesty, even if not entirely accurate.

P.S. Sorry that my thoughts on "The Dark Side" were not interesting... are they completely off? EJ, aren't there any news on this story?

Your comments on "The Dark Side" are interesting, indeed. It's just that here at iTulip we expect that all the major macro events that effect our markets will, for the foreseeable future, be driven by geopolitics versus economics or finance per se. Most interesting to us is how the U.S. is perceived by the "average Russian," as well as views of the Middle East and Asia; Russia will play a very important role in the new geopolitical environment that is now forming.

For example, the images in the these Reuters Photos published by Kommersant are not shown in U.S. web sites or newspapers. And I doubt most iTulip readers know that the "average Russian" views the U.S. as militarily aggressive toward Russia.

Your comments on these issues are especially appreciated. Of course, you may prefer to comment on other issues, such as "The Dark Side," which is also appreciated and your choice.

I suppose my #1 question is where do you think the "average Russian" sees U.S.-Russian relations going?

[metalman]

Re: Not a Conspiracy–A System

The quality of your writing, and the fact that I read somewhere that you have a PhD, do not give the impression of an "average Russian," or an average anyone, for that matter. Your self-description is accepted as honorable modesty, even if not entirely accurate.



Your comments on "The Dark Side" are interesting, indeed. It's just that here at iTulip we expect that all the major macro events that effect our markets will, for the foreseeable future, be driven by geopolitics versus economics or finance per se. Most interesting to us is how the U.S. is perceived by the "average Russian," as well as views of the Middle East and Asia; Russia will play a very important role in the new geopolitical environment that is now forming.

For example, the images in the these Reuters Photos published by Kommersant are not shown in U.S. web sites or newspapers. And I doubt most iTulip readers know that the "average Russian" views the U.S. as militarily aggressive toward Russia.

Your comments on these issues are especially appreciated. Of course, you may prefer to comment on other issues, such as "The Dark Side," which is also appreciated and your choice.

I suppose my #1 question is where do you think the "average Russian" sees U.S.-Russian relations going?

what i want to know is... iran is bargaining along with russia for what from the usa and its european allies?

[AMaltsev]

Re: U.S.-Russian relations

I suppose my #1 question is where do you think the "average Russian" sees U.S.-Russian relations going?

I'm afraid there is no way for the relations to improve in the near- or middle-term.

Your government never gets tired to tell other countries to behave - or else! It crashes country after country (under fake pretexts); your military spreads all over the world like a deadly virus; your 'defense' budget is ridiculously, unproportionally huge and ever-growing; you made the whole world to accept worthless green paper as a means of exchange, thus you get a lot of something for absolutely nothing. You export abroad just wrong and evil things like inflation, debt, bombs, hatred... alas, most of good stuff you ceased to export long ago.

IMHO, it's hard to make people your friends by bombing or threatening them. And I believe none of you iTulip readers dare to insist the USA never bombs and never threatens anyone.

To me it seems you can never hope to improve relations with most of other nations until you address these very problems and try to solve them. "Stop correcting others, improve yourself", I'd like to suggest to your officials. But they are too busy pocketing profits from bank interest, from military industry, from new business projects in conquered nations, from distribution of budget money, from corruption and machinations, they don't hear my words and don't care nevertheless. They don't listen to Americans, why shall I expect them to ever listen to me?

USA is tough in international matters, it pays no attention to the interests of other nations. You either kneel before USA or live miserably ever after. So, if Russia don't kneel, America will never stop looking at it through a gun-sight. Putin clearly expressed in Munich that we don't kneel - I urge everyone to read his speech to verify my words. Therefore, the pressure on us Russians will just grow and grow with no end in sight.
Thus, you've found one more pretext for building up military industry. Long live Cold War II! :-(

[bart]

Re: U.S.-Russian relations

...
And I believe none of you iTulip readers dare to insist the USA never bombs and never threatens anyone.
...

I can't speak for anyone else but it's not unusual for me to fax or write Congress and others, and also speak about it with others.

[EJ]

Re: U.S.-Russian relations

I'm afraid there is no way for the relations to improve in the near- or middle-term.

Your government never gets tired to tell other countries to behave - or else! It crashes country after country (under fake pretexts); your military spreads all over the world like a deadly virus; your 'defense' budget is ridiculously, unproportionally huge and ever-growing; you made the whole world to accept worthless green paper as a means of exchange, thus you get a lot of something for absolutely nothing. You export abroad just wrong and evil things like inflation, debt, bombs, hatred... alas, most of good stuff you ceased to export long ago.

IMHO, it's hard to make people your friends by bombing or threatening them. And I believe none of you iTulip readers dare to insist the USA never bombs and never threatens anyone.

To me it seems you can never hope to improve relations with most of other nations until you address these very problems and try to solve them. "Stop correcting others, improve yourself", I'd like to suggest to your officials. But they are too busy pocketing profits from bank interest, from military industry, from new business projects in conquered nations, from distribution of budget money, from corruption and machinations, they don't hear my words and don't care nevertheless. They don't listen to Americans, why shall I expect them to ever listen to me?

USA is tough in international matters, it pays no attention to the interests of other nations. You either kneel before USA or live miserably ever after. So, if Russia don't kneel, America will never stop looking at it through a gun-sight. Putin clearly expressed in Munich that we don't kneel - I urge everyone to read his speech to verify my words. Therefore, the pressure on us Russians will just grow and grow with no end in sight.
Thus, you've found one more pretext for building up military industry. Long live Cold War II! :-(

You're not surprising anyone here at iTulip with your comments. I suppose if we polled our members we'd find a significant majority hoping for a recession before 2008 in order to motivate the U.S. electorate to vote in new management, because only significant economic events get U.S. voters out in large numbers to vote for change. Whether in the process they vote for candidates who are more visionary with respect to domestic economic and social policy and more constructive with respect to foreign policy depends on whether we experience a major recession (I believe we will) and how strongly these issues are tied to economics and, thus, make it onto the platform of a few key candidates. Unfortunately, representatives of both major political parties need financial support from finance, insurance, real estate, and weapons interests in order to get elected. The most amusing quotation I've read to express the frustration many feel about this predicament comes from Claire Wolfe: “America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards.”

Thanks for your comments.

[Pervilis Spurius]

Re: U.S.-Russian relations

Bart, if I understand my russo-english correctly, I think he means that iTulip readers would not deny that the USA bombs and threatens other countries or that the USA is a global bully.

[bart]

Re: U.S.-Russian relations

Bart, if I understand my russo-english correctly, I think he means that iTulip readers would not deny that the USA bombs and threatens other countries or that the USA is a global bully.

Thanks PS, you're likely correct. I wasn't certain of the meaning myself and wanted to express an opinion.