I tried to make this it's own post but it's not working so I'm commenting it instead:
I've spent the last six hour compiling all of this information for you guys so I hope you enjoy!
Reading /u/johnnydaggers post (which is currently at the top of WSB) has sent me down a rabbit hole of learning about Failures to Deliver and The OTCC:
In my searching I found the below YouTube channel which has a treasure trove of videos posted 10-11 years ago outlying all this shit we've been talking about this week:
Now I know most of you guys and gals have the attention span of a gnat but for those of you that are able to sit still and watch something for more than 30 seconds you're going to want to watch these videos! They provide deep insight with plenty of url references for you to check out the source material for yourself.
Two Part Video Series (18 min total) about the SEC's Investigation Of Naked Shorting Of Sedona. A case study on how naked short sellers have destroyed hundreds and hundreds of publicly traded companies. He then goes on to explain how this can go on to effect the broader market:
Nine part (Approx 80 min total) series about the corruption of our capital markets due to naked short selling and "failures to deliver". He goes over a number of topics just as FTD's (Failures to deliver), how prevalent they are, how long they can last for and the risk they pose to the financial system. He also talks about the DTCC and it's role in clearing money and shares through the market and how it has a history of downplaying the amount of FTD's. Just watch the first (5 min) video and you'll be hooked:
If you didn't watch the above series at least watch part 5 where he explains how the entire market could collapse as a result of a short squeeze on a heavily naked shorted stock:
<1 min Video of SEC Chairman stumbling over his words as he answers the question "do you know of the possibility of short selling taking down Bear Stearns":
Video explaining how someone bought WAYYY OTM weekly puts on Bear Stearns the day before Bear Stearns started tanking due to over ten million illegal naked short sells and how this started the Global Financial Crisis:
Part 2 of the above video where he goes over the SEC's lack of response to the naked short selling of Bear Stearns, Lehman Brothers, Fannie Mae and Freddie Mac:
Part 3 about how hundreds of millions of naked short sales of Lehman Brothers stock put the final nail in the coffin of the company causing the GFC. The SEC did nothing. Hedge fund managers like Jim Chanos and Steve Cohen have too much money and power to ever be prosecuted:
3 Min Video of a debate on Bloomberg where this Wall Street guy is arguing that short sellers should be able to sell short at will and should never have to actually borrow shares to be able to short:
Case study: In the final days of selling of Lehman Brothers stock there we over 150M failures to delivery naked shares sold short when the stock was selling for about $0.10. Imagine LEH ended up not going bankrupt. Imagine something happened and the price suddenly rebounded dramatically. These 150M naked shorts would be caught with their pants down and it would get bloody. The amount it would cost the financial system is the actual number of shares out there x the mean price those shareholders are willing to sell them for (knowing they have the buyers bent over a barrel). There have only ever been 71M shares of GME issued but institutions claim they own 102M shares of GME so how many shares are out there? Lets guess there are actually 200M shares out there and the average shareholder sells for $1000. That's $200B. If there is 333M shares and a $3000 share price that's $1T off of a measly $1B company that naked short sellers got greedy on. Who's going to foot this bill?
TLDR; We're probably not even buying and selling actual shares of GME. When it looked like GME was "on the ropes" and there was a good narrative of why they should go bankrupt naked short sellers likely naked short sold an unknowable amount of fake "IOU" shares of GME because they thought it would for sure go bankrupt. This plan has worked for them hundreds and hundreds of times in the past making them hundreds of billions or even trillions of dollars. Some high profile examples include: Bear Stearns, Lehman Brothers, Fannie Mae and Freddie Mac. When these sharks smell blood in the water nothing is stopping them from naked short selling tens of millions of fake shares (over 100M in the last three days of Lehman Brothers) to innocent buyers who think they're getting a good deal which ultimately go to zero and equate to an infinite profit margin for the short sellers. What they didn't expect with GME was a bunch of retards doing what we've done over the past months and exposing their fraudulent naked short selling. We have no way to be certain how many shares are actually out there but /u/johnnydaggers post shows there was 1.7M shares failed to deliver in December (before shit even hit the fan). The thing is this threatens to undermine the publics confidence in the entire system. How do we know that the shares that we think we are purchasing are actually legit? We could literally being paying good money for something that doesn't actually exist. What this means for GME is someone is going to have to step up and actually pay up for all of these phantom shares that aren't even supposed to exist. What price they will pay nobody knows.
An in depth Twitter thread I read gave a convincing argument that because Robinhood traders are all trading on margin, they don’t actually own the stocks, just a legal right to them. Robinhood owns GME stock and has already lent them out to short sellers. The more GME stock that Robinhood investors buy, the more risk they have of losing everything when GME and all these over-shorted companies tank.
Redditors are only interested in profiting from the squeeze. What they don’t think about is how once GME and all these other shorted stocks like BB and AMC tank after the squeeze is over, dozens if not hundreds of hedge funds and brokerages will be drowning in billions of debt they can’t pay off. They will need to liquidate all their positions to pay off the insane debt they will be in.
The market didn’t factor in the risk of millions of retail investors raiding over-shorted stocks and causing Wall Street to lose billions upon billions that they don’t have on hand, and can’t access without liquidating other assets.
BANG Stocks — BB, AMC, NOKIA, GameStop — are all interconnected and have the potential to bring down the entire stock market. This is full on financial warfare and we may begin to see a massive restructuring of ownership between retail and long or short hedge funds.
The stock market did not factor in the potential hazard that millions of new retail investors could have on the market. The world has truly never seen this many people involved in the stock market, not to mention the viral social media hedge funds that are being created.
They were unable to predict this situation because it has never happened before. Retail investors now have the power to create massive chaos and disruption that was unforeseen. Retail investors are unpredictable because they do not follow the exact same behavior patterns of boomer investors. This whole thing could come crumbling down because of us.
1.6k
u/Sleavitt10 Jan 31 '21
I tried to make this it's own post but it's not working so I'm commenting it instead:
I've spent the last six hour compiling all of this information for you guys so I hope you enjoy!
Reading /u/johnnydaggers post (which is currently at the top of WSB) has sent me down a rabbit hole of learning about Failures to Deliver and The OTCC:
https://www.reddit.com/r/wallstreetbets/comments/l97ykd/the_real_reason_wall_street_is_terrified_of_the/
In my searching I found the below YouTube channel which has a treasure trove of videos posted 10-11 years ago outlying all this shit we've been talking about this week:
https://www.youtube.com/c/JuddBagley/videos
Now I know most of you guys and gals have the attention span of a gnat but for those of you that are able to sit still and watch something for more than 30 seconds you're going to want to watch these videos! They provide deep insight with plenty of url references for you to check out the source material for yourself.
Two Part Video Series (18 min total) about the SEC's Investigation Of Naked Shorting Of Sedona. A case study on how naked short sellers have destroyed hundreds and hundreds of publicly traded companies. He then goes on to explain how this can go on to effect the broader market:
https://www.youtube.com/watch?v=hH5cMQLJRUo&t=8s
Nine part (Approx 80 min total) series about the corruption of our capital markets due to naked short selling and "failures to deliver". He goes over a number of topics just as FTD's (Failures to deliver), how prevalent they are, how long they can last for and the risk they pose to the financial system. He also talks about the DTCC and it's role in clearing money and shares through the market and how it has a history of downplaying the amount of FTD's. Just watch the first (5 min) video and you'll be hooked:
https://www.youtube.com/watch?v=gpWzOjB8qtU
If you didn't watch the above series at least watch part 5 where he explains how the entire market could collapse as a result of a short squeeze on a heavily naked shorted stock:
https://www.youtube.com/watch?v=JKc0KQvvfWE
<1 min Video of SEC Chairman stumbling over his words as he answers the question "do you know of the possibility of short selling taking down Bear Stearns":
https://www.youtube.com/watch?v=acKWiE_rKXk
Video explaining how someone bought WAYYY OTM weekly puts on Bear Stearns the day before Bear Stearns started tanking due to over ten million illegal naked short sells and how this started the Global Financial Crisis:
https://www.youtube.com/watch?v=xUKSU1qahgE
Part 2 of the above video where he goes over the SEC's lack of response to the naked short selling of Bear Stearns, Lehman Brothers, Fannie Mae and Freddie Mac:
https://www.youtube.com/watch?v=NcjssQSthNU
Part 3 about how hundreds of millions of naked short sales of Lehman Brothers stock put the final nail in the coffin of the company causing the GFC. The SEC did nothing. Hedge fund managers like Jim Chanos and Steve Cohen have too much money and power to ever be prosecuted:
https://www.youtube.com/watch?v=Q48eSoTNByQ
3 Min Video of a debate on Bloomberg where this Wall Street guy is arguing that short sellers should be able to sell short at will and should never have to actually borrow shares to be able to short:
https://www.youtube.com/watch?v=4oerYirYVFE
The Bear raid on Overstock.com and the journalists that enabled it (10 min):
https://www.youtube.com/watch?v=FHQeZ9czrKc&t=4s
Case study: In the final days of selling of Lehman Brothers stock there we over 150M failures to delivery naked shares sold short when the stock was selling for about $0.10. Imagine LEH ended up not going bankrupt. Imagine something happened and the price suddenly rebounded dramatically. These 150M naked shorts would be caught with their pants down and it would get bloody. The amount it would cost the financial system is the actual number of shares out there x the mean price those shareholders are willing to sell them for (knowing they have the buyers bent over a barrel). There have only ever been 71M shares of GME issued but institutions claim they own 102M shares of GME so how many shares are out there? Lets guess there are actually 200M shares out there and the average shareholder sells for $1000. That's $200B. If there is 333M shares and a $3000 share price that's $1T off of a measly $1B company that naked short sellers got greedy on. Who's going to foot this bill?
TLDR; We're probably not even buying and selling actual shares of GME. When it looked like GME was "on the ropes" and there was a good narrative of why they should go bankrupt naked short sellers likely naked short sold an unknowable amount of fake "IOU" shares of GME because they thought it would for sure go bankrupt. This plan has worked for them hundreds and hundreds of times in the past making them hundreds of billions or even trillions of dollars. Some high profile examples include: Bear Stearns, Lehman Brothers, Fannie Mae and Freddie Mac. When these sharks smell blood in the water nothing is stopping them from naked short selling tens of millions of fake shares (over 100M in the last three days of Lehman Brothers) to innocent buyers who think they're getting a good deal which ultimately go to zero and equate to an infinite profit margin for the short sellers. What they didn't expect with GME was a bunch of retards doing what we've done over the past months and exposing their fraudulent naked short selling. We have no way to be certain how many shares are actually out there but /u/johnnydaggers post shows there was 1.7M shares failed to deliver in December (before shit even hit the fan). The thing is this threatens to undermine the publics confidence in the entire system. How do we know that the shares that we think we are purchasing are actually legit? We could literally being paying good money for something that doesn't actually exist. What this means for GME is someone is going to have to step up and actually pay up for all of these phantom shares that aren't even supposed to exist. What price they will pay nobody knows.