From Dove To Hawk And Back To Dove; Bernanke Moves Markets

Question: How do you make stocks and bonds rise in price at the same time and increase the wealth of the investor class?

Answer: You declare your intent to buy $85 billion of bonds and mortgages every month for a considerably extended period as a way to maintain the lowest rates of interest in recent history.

Question: How do you drive the price of stocks and bonds lower at the same time, reducing the wealth of the investor class, and threatening the housing recovery?

Answer: You announce your intention to introduce tapering and reduce the amount of bonds and mortgages you are buying every month, with the intent of ultimately ceasing such purchases completely at some uncertain date in the future.

Question: How do you correct(reverse) the intent to begin phasing out quantitative easing in the light of stock and bond markets reacting in an overly negative manner that threatens the economic recovery?

Answer: You announce that you may indeed reduce the dollar amount of bonds and mortgages you are buying, but not right away. And you will certainly not be increasing the interest rate for borrowing money in the foreseeable future, or most certainly not until the unemployment rate falls from 7.6% to 6.5%.

Question: What do you do if the latest attempt at manipulation (changing signals) may not be sufficiently convincing. After all, the yield on the 10 year Treasury note is close to its recent peak of 2.70%. The cost of a mortgage has backed up as well.

Answer: You strongly hint that even if the U.S. unemployment rate falls to 6.5%, the Fed may well, probably will, keep interest rates near zero. This is a major revision to what Bernanke has been positing ever since May 22nd, when bond traders began getting net short Treasuries. They meant to coin profits in the instant spike in interest rates.

Hint; this promise might require Bernanke to remain at the helm of the Fed for the near or medium term future, so as to personally steer this, mind you, absolutely fresh, new, dramatic change in policy. It underscores just how dreadfully unpleasant the past few weeks of interest rate hikes have been for Bernanke & Co. The unanticipated negative reaction around the world was not helpful for recovery in either the U.S. or Europe or China.

Question: What can we expect Bernanke to do over the remainder of 2013?

Answer: Divide tapering into two parts, the process of buying securities and the hiking of interest rates. Now that he has awoken to the risks in giving weight to the hawks on the Fed board, Bernanke will assert himself more on the dovish side of monetary policy, so that all the good works since 2009 will not be debilitated in any manner. A very tricky business with ramifications for all of us. I must say that I’d rather have Bernanke handling this tricky balancing act than some more unknown economist. Maybe he could bring the exceptionally wise Stanley Fischer, Bernanke’s PHd. adviser at MIT in 1979 and the retiring head of the Bank of Israel, back to Washington to help oversee the transition in monetary policy.

Question: What has Bernanke, and therefore we concerned citizens, learned from the crisis of 2008 and the meltdown in the markets as it damaged economic growth?

Answer: The lesson learned, Bernanke told the National Bureau of Economic Research gathering was a measure that “had been forgotten to some extent… severe financial instability can do grave damage to the broader economy.” The maintenance of financial stability is “coequal with the responsibility for the management of monetary policy.” The Fed must integrate the two. So, we will watch and wait to see how integrating the two, financial stability and the management of monetary policy, go the next 6 months. Pray, beautifully well, we hope. Source: HERE
 

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$20 Mil Awarded in Internet Libel Case

S.C. Court Grants Judgment to $RMCP Revolutions Medical and Its CEO

CHARLESTON, SC--(Marketwired - July 01, 2013) - Revolutions Medical Corporation (RMCP), a Charleston, S.C.-based medical device and software applications company, and its Chief Executive Officer, Rondald Wheet, have been awarded more than $20 million in a default judgment against Phillip Maurice "Marty" Hicks. A special referee for the South Carolina court awarded the company $3.6 million in compensatory damages and $1.5 million in punitive damages. Wheet was awarded $12,010,000 in compensatory damages and $3 million in punitive damages.

The Charleston County Common Pleas Court found Hicks liable for Internet defamation in September 2011 after he was defaulted as a sanction for disobeying a court order requiring him to participate in discovery in the case. In his decision, the special referee took into account the malicious intent and duration in which Hicks waged his cyber smear campaign against Revolutions Medical and Wheet. He also found that Hicks intentionally interfered with a grant the company was to receive from the Department of Defense in September 2010 to supply its patented RevVac™ safety syringes to its HIV/AIDS Prevention Program.

"This judgment sends a clear message to our shareholders and the market that there are legal and financial consequences when you commit libel," states Wheet, who also serves as the Company's Chairman of the Board. "Looking at the bigger picture, small public companies are vulnerable and can fall prey to these 'short and distort' campaigns waged by individuals, hedge funds and traders. Not only can these campaigns violate securities laws, they can also do severe harm to companies by eroding shareholder value, making it difficult to raise capital, increasing costs and legal expenses, delaying the execution of business plans, stunting job creation, and stymieing the entrepreneurial spirit of small American businesses -- all so they can profit by their actions."

According to Mount Pleasant attorney Stephen Bucher of Bucher Legal LLC, the $20 million awarded in this case should serve as a warning to anyone who thinks they can hide behind an alias to conduct a cyber smear or engage in Internet bullying. "The use of cyber consultants with data mining skills combined with some good old fashioned legal investigation almost ensures that those engaging in these illegal activities can be found," states Bucher who represented the plaintiffs in this case. "The era when someone could use the cloak of anonymity of the Internet to destroy reputations and lives is over. There is no cloak of anonymity. We're coming for you."

Bucher adds, "I admire Wheet for his persistence in this case. He was willing to do what it took legally to take down Hicks."
Wheet notes that he and his company plan to pursue every available legal avenue to collect on this judgment against Hicks.

About Revolutions Medical Corporation
Revolutions Medical is a safety medical device and software application company. Its proprietary technologies and products include: the RevVac™ safety syringe, safety blood drawing device, the RevColor™, RevDisplay™, and Rev3D™ software tools that are compatible with standard MRIs and standard Picture Archiving Computer Systems (PACS) and prefilled auto-retraction vacuum safety syringes.

For additional information, please visit Revolutions Medical corporate website:

http://www.revolutionsmedical.com/

To be added to the Revolutions Medical investor email list, please email:
investment@revolutionsmedical.com with RMCP in the subject line.
FORWARD-LOOKING STATEMENTS
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Contact:

Revolutions Medical Corporation
Investor Relations
Phone: (843) 606-9461

Source: Yahoo Finance News

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Methods of Operation of the Pro Basher

Mr.John Doe or Mr.Anonymous, do you really think you are fooling everyone with your hypocrisy? You write suggestive messaging to have a subliminal effect on your readers. Don't you know Mr. JD or Mr. A through education the reader understands you are just doing your jobs? The intelligent and educated poster understands you are professionals. If they don’t they will after reading this article. You will be known in this article as the "Suggester" not as the " Basher " .

Words to Understand:

Hypocrisy: a feigning to be what one is not or to believe what one does not; esp: the false assumption of an appearance of virtue or religion. Source: Merriam-Webster Online Dictionary

Example: claiming to stand for truth and honesty and attempt to hold someone accountable for every scintilla that comes along, while at the same time telling blatant lies and making unfounded false accusations against innocent people, and showing gross disrespect to those individuals that would hold the claimant accountable himself. Source: an anonymous friend

Subliminal: 1: inadequate to produce a sensation or perception 2: existing or functioning outside the area of conscious awareness <the mind><technics in advertising>-subliminally\adv Source: Merriam-Webster Online Dictionary

Example: The use of subliminal messages to discourage unwanted behavior. The use of subliminal messages on post boards is used to counter the possessiveness that exists in the mind in regards to an investment. This is a masking medium used in suggestiveness posting working on the subconscious minds of the readers.

Suggest: 1 a obsolete : to seek to influence : seduce b : to call forth : evoke c : to mention or imply as a possibility < suggested that he might bring his family> d : to propose as desirable or fitting < suggest a stroll> e : to offer for consideration or as a hypothesis < suggest a solution to a problem>

2 a : to call to mind by thought or association <the explosion... suggested sabotage -- F. L. Paxson> b : to serve as a motive or inspiration for <a play suggested by a historic incident>

Suggester: synonyms - SUGGEST, IMPLY, HINT, INTIMATE, INSINUATE, mean to convey an idea indirectly. SUGGEST may stress putting into the mind by association of ideas, awakening of a desire, or initiating a train of thought <a film title that suggests its subject matter>, IMPLY is close to SUGGEST: but may indicate a more definite or logical relation of the unexpressed idea to the expressed <measures implying that bankruptcy was imminent>. HINT implies the use of slight or remote suggestion with a minimum of overt statement < hinted that she might have a job lined up>. INTIMATE stresses delicacy of suggestion without connoting any lack of candor < intimates that there is more to the situation than meets the eye>. INSINUATE applies to the conveying of a usually unpleasant idea in a sly underhanded manner < insinuated that there were shady dealings>. Source: Merriam-Webster OnLine Dictionary

Questions

I had a good friend recently email asking me a few questions in regards to "bashers". Here are a few of his questions. I don’t think he is the only one that asks these questions. I hope what I have written might help answering his questions and educate others.

1. "Why to bashers posting on a board all day>Being negative>bad investment this and that> blah blah...WHY do they spend all day talking about something they hate?"
2. "Are they bored?"
3. "Are they just mad at something?"
4. "Are they paid?"

Types of Bashers/Suggesters 

Basher/Suggesters are their own select breeds, most claim to be individuals with merit. Readers read they are here to help or they only want facts known so others don’t lose their money. They want the reader to think they have all the facts wanting to be the savior for everyone. Readers tend to follow the strong writer on a post board. Not many professional bashers/suggesters are weak individuals. Dominance with factual content is a key to the successful basher/suggester. Also basher/suggesters are accused of various relationships with the company or the stock. Below are ten examples why someone might be posting as the basher/suggester on a public post board. Not all fall in the category of the "Professional Basher" but they do have a motive to see a company’s stock price fluctuate.

1. They are employees that are not currently happy with the company.
2. They are x-employees that have quit or maybe fired
3. They are previous employees or employees of a company that is in some form of reorganization
4. They are competitors in some form
5. They have lost money in regards to the investment in company stock
6. They have friends that have lost money investing in the company stock
7. They are short sellers on this particular stock
8. They are related to some type of Market Making firm
9. They are paid by some unknown firm or individual to ruin the image of the company for various reasons
10. They are swing trading the moves of the stock-pumping up and bashing down
11. They are self proclaimed scam busters

The Methods

1. Compiling Data

The suggester begins by compiling a list of data prior to beginning their suggestive bashing efforts. The suggester begins the informational gathering process by searching the company’s 10K and 10QSB’ reports. This is easy for them do to through sites like Free Edgar. Within the 10K & 10QSB companies’ list all financial data pertaining to past and current situations that have affected or will effect the company’s ability to operate in the future such as current pending lawsuit s. The professional suggester makes sure they have enough information to answer all questions therefore they are able to create debate style rebuttals.

Here is a normal disclaimer an abnormal disclaimer and a legal disclaimer copied out of a two different 10QSB that profession suggesters use all the time.

1. GENERAL The statements contained in this Form 10-QSB, if not historical, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and involve risks and uncertainties that could cause actual results to differ materially from the results, financial or otherwise, or other expectations described in such forward-looking statements. Any forward-looking statement or statements speak only as of the date on which such statements were made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statements are made or reflect the occurrence of unanticipated events. Therefore, forward-looking statements should not be relied upon as prediction of actual future results.
2. This Annual Report on Form 10-KSB includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Forward Looking Statements"). All statements other than statements of historical fact included in this report are Forward Looking Statements. In the normal course of its business, the Company, in an effort to help keep its shareholders and the public informed about the Company's operations, may from time-to-time issue certain statements, either in writing or orally, that contain or may contain Forward-Looking Statements. Although the Company believes that the expectations reflected in such Forward Looking Statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, past and possible future, of acquisitions and projected or anticipated benefits from acquisitions made by or to be made by the Company, or projections involving anticipated revenues, earnings, levels of capital expenditures or other aspects of operating results. All phases of the Company operations are subject to a number of uncertainties, risks and other influences, many of which are outside the control of the Company and any one of which, or a combination of which, could materially affect the results of the Company's proposed operations and whether Forward Looking Statements made by the Company ultimately prove to be accurate. Such important factors ("Important Factors") and other factors could cause actual results to differ materially from the Company's expectations are disclosed in this report. All prior and subsequent written and oral Forward Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the financial statements of the Company.

2. Suggestive Posting

Once all data is complied suggestive posting begins. Now that the suggester is armed for battle with all the data he can possible find they begin posting using approximately 25% fact and 75% suggestive posting. In this suggestive method of posting there are messages that subliminally effect the mind of the reader by planting doubt. The normal method of suggestive posting is to refer back to SEC registrations such as quarterly statements, earnings and lawsuits while cutting and pasting the parts the reader will find troublesome. The facts they pull from SEC records will lend credibility to their suggestions. However, they never set out a thesis. A common tactic is to highlight in bold a section and attempt to hold that you the reader must explain the highlighted section. Follow this example: Mary had a little lamb. So where’s the lamb now? They never write about the forward progress of a company this might interfere with their mission. The suggester keys in on the weakest unskilled posters that are not capable of combating their data facts. The facts a suggester uses are coordinated facts that will even bring the most intelligent posters down to his level.

3. Religious Posting

Recently a new suggester has entered the arena suggesting they are posting in the name of God to save investors from loss. This is the more pathetic suggester that uses God, holiness and sin to create doubt in investor confidence while trying to add credence to their distasteful persona.  Here are a few examples taken of a Raging Bull message board posted by Mary Cummings, "...You are a sinner", "Your souls are doomed for lying, cheating and stealing.", ".it's a sin",  " By: mistress__mmmary. Mary, mother of god . "  In this post the suggester Mary uses another alias, mrs_mmmary, referring herself to Mother Theresa  while she complains to the Raging Bull TOS department about losing aliases she continued to make after her suspension, "They seem to count the number of tos reports and not look at the content."Mother Theresa getting kicked by 50 slimey stock promoters and she makes one complaint? 50 slimey stock promoters making 50 complaints about a saint in their presence? Kick the saint out=less work."

Things are changing when the suggester starts to refer to themselves as a saint or a Godly individual such as Mother Theresa.

4. Multiple Alias Posting

The suggester will develop multiple aliases, possible using more then one ISP or computers to try to hide his location. They have been known to go to Libraries or Internet Coffee Shops to use computers while running their bashing onslaught on a particular company. They don’t start out with a full frontal assault on the company or it’s shareholders. This full attack is counter-productive and hurts the image the suggester needs for their credibility. Therefore they methodically work their assault into high gear. Through the multiple alias usage the suggester will stimulate discussion to build supportive rapport with the reader. During this discussion with others the suggester will joke and play on a post board with others trying to win their following. All this slowly builds the credibility of the aliases. Once the suggesters have built the rapport with the posters of a board they start their premeditated onslaught of planting doubt with suggestive posting. This normally takes place by four or five aliases dominating a board wearing down the longs. They will also use multiple aliases posting to each other building each alias up trying to show the reader they are knowledgeable about the subject suppo rting each other’s views. At this point many longs that are easily influenced fall right into the trap set by the basher.

5. Planting Doubt

One thing that is very important is suggesters are not there to create a fast plunge in the stock price. By planting subliminal suggestive doubt about the ability of the company to make a profit day after day the share price declines gradually. The suggester does not want a fast plunge in share price because this might focus outright intent to damage the company and could be used in a potential future lawsuit by the company. Many companies are currently filing lawsuits and the main reason is share price decline that they blame on basher/suggesters posts on message boards. Suggesting a reverse spilt in high authorized and outstanding share count companies is also a method the suggester uses to plant doubt. Many investors have witnessed companies do reverse splits when issued shares reach the authorized allowance. Many of the small companies need capitalization and issue shares for working capital or to pay down debt. The suggester will always play on the reverse split issue. This is a given for the professional basher.

The reader will also witness the use of all caps in wording. This is especially true when reading post headings. The heading of a message is the first to catch the eye of the reader. The reader does not even have to enter the post to read the entire suggestive message. The heading has already subliminally had an effect on the reader. A few examples of this method of posting are headings such as: "SELL NOW BEFORE IT IS TO LATE!", "THE CEO IS A FRAUD!", ""THIS DOG IS DEAD!", "HEADED FOR THE PINKS!", "ABOUT TO GET DELISTED!", "SELL! SELL ! SELL!", "INSIDERS ARE SELLING!", "WHO IS DOING ALL THE SELLING?!", "SOMEONE IS SELLING, WHO?". THIS STOCK WILL TANK TOMORROW!", SELL THIS DOG NOW!"

These are just a few headings you might have read while visiting your favorite stocks post board.

6. Long PR Suggestions

The suggester discourages the longs about taking the companies word on any forward projection. If the company’s forward projection history and PR's are not completed the suggester brings this subject up constantly pointing towards the inability of the company to follow through with completion of announcements contained in PRs. Then they encourage the long to call the company and question the validity of PR projection and why they are never completed. Many of these PRs contain acquisitions intents or other forward projections. The suggester also encourages the long to ask about other issues such as reverse splits. If the company is questionable the suggester will post company phone numbers until longs are habitually bombarding the company with calls about PRs and why there is no follow through on other announcements. T he basher knows many longs will not call a company and will just sell after others report in post what they are told or wh at they were not told.

7. Use Hypesters for Fuel

All post boards have the hypester present just like all boards have the suggester present. The suggester looks for the hypesters on a board. They zero in and target these types of posters. They understand the enthusiasm of the hypester and when confronted they know the hypester will return posting. This allows the suggester to keep the flow of posts moving and use the hypester to their advantage. These debate style posts play right into the suggester’s needs to create a debate atmosphere on a board. This allows the suggester to post some of his factual data while he proves the hypster is mostly all hype. Remember most suggesters are very professional and you should not consider them ordinary posters. Very seldom do you read a professional suggester calling a hypester or a poster names or using profanity in their posts. But the hypester loses credibility because 100% of the time he attacks the suggester with name-calling. This name-calling by the hypester adds to the credibility of the suggester.

8. Knows When Identified

The suggesters know when a board has them identified and they need to back off. They will put up a brief fight then back off very quickly. The suggester does not leave for long. After a short hiatus, maybe an hour they are right back to posting. The poster that makes them back off the quickest is a poster that does not argue or try to do battle with the suggester. This poster will confront the suggester with logic and facts. This type of poster is easy for the suggester to identify. Under normal circumstances the basher does not even attempt to answer this type of poster. The suggester realizes this poster would only damage what he just took hours, days or weeks to accomplish while building rapport with reader.

9. Share Price

When a stock price is moving up the suggester takes his time suggesting and covering all the bad points of the company. The suggester understands the share price will hesitate as it moves up. The suggester is a professional and well versed with the understandings of market momentum and meanings such as overbought and oversold. At each hesitation point the suggester will pick up posting until the share price is considered to high to buy by longs or an overbought condition is apparent. Once the suggester thinks a turn in price to the downside starts, posting picks up again. It is common for a basher to bash a stock heavier as they move down. Every time the suggester is able to plant a little more doubt someone sells and perpetuates the selling pushing the stock price lower. Once the suggester has that down trend established he knows he has won. At every level the stock price hesitates while moving down the bashers posting frequency picks up. Also at this time the long only becomes frightened because of there loses are increasing each step of the move down. Once the oversold condition is apparent the suggester will back off and allow the longs to move a price up again. This is very true for suggesters that are playing the rolls in a stock, trading in and out of their positions. When considering share price we need to remember I wrote ten types of basher/suggesters. Not all of them want to see a company close its doors.

To summarize the above we read ten reasons why a basher/suggester would spend day after day posting on an Internet post board. The reasons consist of a very wide range from hatred towards the company to trading the company’s stock in the open market. No matter which of the ten categories the poster falls in he is still grouped into the category of the "Basher". The use of the above sub topics, Compiling Data, Suggestive Posting , Religious Posting , Multiple Alias Posting, Planting Doubt, Long Shareholder Suggestions, Use Hypesters for Fuel, Knows When Identified and Share Price listed under heading Methods gives the methods the professional will use to fulfill their objective. Once they have entered into this elite profession they have graduated from basher entering the elite classification known as the "Professional Basher".

Monday, October 7, 2002 Written by by Hal Engel  

Via Source HERE  

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Is the SEC Covering Up Wall Street Crimes?

Imagine a world in which a man who is repeatedly investigated for a string of serious crimes, but never prosecuted, has his slate wiped clean every time the cops fail to make a case. No more Lifetime channel specials where the murderer is unveiled after police stumble upon past intrigues in some old file – "Hey, chief, didja know this guy had two wives die falling down the stairs?" No more burglary sprees cracked when some sharp cop sees the same name pop up in one too many witness statements. This is a different world, one far friendlier to lawbreakers, where even the suspicion of wrongdoing gets wiped from the record.

That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation's worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – "18,000 ... including Madoff," as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.
Under a deal the SEC worked out with the National Archives and Records Administration, all of the agency's records – "including case files relating to preliminary investigations" – are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term "Orwellian," devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation. Amazingly, the wholesale destruction of the cases – known as MUIs, or "Matters Under Inquiry" – was not something done on the sly, in secret. The enforcement division of the SEC even spelled out the procedure in writing, on the commission's internal website. "After you have closed a MUI that has not become an investigation," the site advised staffers, "you should dispose of any documents obtained in connection with the MUI."
Many of the destroyed files involved companies and individuals who would later play prominent roles in the economic meltdown of 2008. Two MUIs involving con artist Bernie Madoff vanished. So did a 2002 inquiry into financial fraud at Lehman Brothers, as well as a 2005 case of insider trading at the same soon-to-be-bankrupt bank. A 2009 preliminary investigation of insider trading by Goldman Sachs was deleted, along with records for at least three cases involving the infamous hedge fund SAC Capital.
The widespread destruction of records was brought to the attention of Congress in July, when an SEC attorney named Darcy Flynn decided to blow the whistle. According to Flynn, who was responsible for helping to manage the commission's records, the SEC has been destroying records of preliminary investigations since at least 1993. After he alerted NARA to the problem, Flynn reports, senior staff at the SEC scrambled to hide the commission's improprieties.
As a federally protected whistle-blower, Flynn is not permitted to speak to the press. But in evidence he presented to the SEC's inspector general and three congressional committees earlier this summer, the 13-year veteran of the agency paints a startling picture of a federal police force that has effectively been conquered by the financial criminals it is charged with investigating. In at least one case, according to Flynn, investigators at the SEC found their desire to bring a case against an influential bank thwarted by senior officials in the enforcement division – whose director turned around and accepted a lucrative job from the very same bank they had been prevented from investigating. In another case, the agency farmed out its inquiry to a private law firm – one hired by the company under investigation. The outside firm, unsurprisingly, concluded that no further investigation of its client was necessary. To complete the bureaucratic laundering process, Flynn says, the SEC dropped the case and destroyed the files.
p.2
Much has been made in recent months of the government's glaring failure to police Wall Street; to date, federal and state prosecutors have yet to put a single senior Wall Street executive behind bars for any of the many well-documented crimes related to the financial crisis. Indeed, Flynn's accusations dovetail with a recent series of damaging critiques of the SEC made by reporters, watchdog groups and members of Congress, all of which seem to indicate that top federal regulators spend more time lunching, schmoozing and job-interviewing with Wall Street crooks than they do catching them. As one former SEC staffer describes it, the agency is now filled with so many Wall Street hotshots from oft-investigated banks that it has been "infected with the Goldman mindset from within."
The destruction of records by the SEC, as outlined by Flynn, is something far more than an administrative accident or bureaucratic fuck-up. It's a symptom of the agency's terminal brain damage. Somewhere along the line, those at the SEC responsible for policing America's banks fell and hit their head on a big pile of Wall Street's money – a blow from which the agency has never recovered. "From what I've seen, it looks as if the SEC might have sanctioned some level of case-related document destruction," says Sen. Chuck Grassley, the ranking Republican on the Senate Judiciary Committee, whose staff has interviewed Flynn. "It doesn't make sense that an agency responsible for investigations would want to get rid of potential evidence. If these charges are true, the agency needs to explain why it destroyed documents, how many documents it destroyed over what time frame and to what extent its actions were consistent with the law."
How did officials at the SEC wind up with a faithful veteran employee – a conservative, mid-level attorney described as a highly reluctant whistle-blower – spilling the agency's most sordid secrets to Congress? In a way, they asked for it.
On May 18th of this year, SEC enforcement director Robert Khuzami sent out a mass e-mail to the agency's staff with the subject line "Lawyers Behaving Badly." In it, Khuzami asked his subordinates to report any experiences they might have had where "the behavior of counsel representing clients in... investigations has been questionable."
Khuzami was asking staffers to recount any stories of outside counsel behaving unethically. But Flynn apparently thought his boss was looking for examples of lawyers "behaving badly" anywhere, including within the SEC. And he had a story to share he'd kept a lid on for years. "Mr. Khuzami may have gotten something more than he expected," Flynn's lawyer, a former SEC whistle-blower named Gary Aguirre, later explained to Congress.
Flynn responded to Khuzami with a letter laying out one such example of misbehaving lawyers within the SEC. It involved a case from very early in Flynn's career, back in 2000, when he was working with a group of investigators who thought they had a "slam-dunk" case against Deutsche Bank, the German financial giant. A few years earlier, Rolf Breuer, the bank's CEO, had given an interview to Der Spiegel in which he denied that Deutsche was involved in übernahmegespräche – takeover talks – to acquire a rival American firm, Bankers Trust. But the statement was apparently untrue – and it sent the stock of Bankers Trust tumbling, potentially lowering the price for the merger. Flynn and his fellow SEC investigators, suspecting that investors of Bankers Trust had been defrauded, opened a MUI on the case.

" " " " " " " " " "  " " " " " " "" " " " " " "

p.9 
But even if SEC officials manage to dodge criminal charges, it won't change what happened: The nation's top financial police destroyed more than a decade's worth of intelligence they had gathered on some of Wall Street's most egregious offenders. "The SEC not keeping the MUIs – you can see why this would be bad," says Markopolos, the fraud examiner famous for breaking the Madoff case. "The reason you would want to keep them is to build a pattern. That way, if you get five MUIs over a period of 20 years on something similar involving the same company, you should be able to connect five dots and say, 'You know, I've had five MUIs – they're probably doing something. Let's go tear the place apart.'" Destroy the MUIs, and Wall Street banks can commit the exact same crime over and over, without anyone ever knowing.
Regulation isn't a panacea. The SEC could have placed federal agents on every corner of lower Manhattan throughout the past decade, and it might not have put a dent in the massive wave of corruption and fraud that left the economy in flames three years ago. And even if SEC staffers from top to bottom had been fully committed to rooting out financial corruption, the agency would still have been seriously hampered by a lack of resources that often forces it to abandon promising cases due to a shortage of manpower. "It's always a triage," is how one SEC veteran puts it. "And it's worse now."
But we're equally in the dark about another hypothetical. Forget about what might have been if the SEC had followed up in earnest on all of those lost MUIs. What if even a handful of them had turned into real cases? How many investors might have been saved from crushing losses if Lehman Brothers had been forced to reveal its shady accounting way back in 2002? Might the need for taxpayer bailouts have been lessened had fraud cases against Citigroup and Bank of America been pursued in 2005 and 2007? And would the U.S. government have doubled down on its bailout of AIG if it had known that some of the firm's executives were suspected of insider trading in September 2008?
It goes without saying that no ordinary law-enforcement agency would willingly destroy its own evidence. In fact, when it comes to  garden-variety crooks, more and more police agencies are catching criminals with the aid of large and well-maintained databases. "Street-level law enforcement is increasingly data-driven," says Bill Laufer, a criminology professor at the University of Pennsylvania. "For a host of reasons, though, we are starved for good data on both white-collar and corporate crime. So the idea that we would take the little data we do have and shred it, without a legal requirement to do so, calls for a very creative explanation."
We'll never know what the impact of those destroyed cases might have been; we'll never know if those cases were closed for good reasons or bad. We'll never know exactly who got away with what, because federal regulators have weighted down a huge sack of Wall Street's dirty laundry and dumped it in a lake, never to be seen again.
Editor’s Note: The online version of this article has been amended from the print version to reflect that the SEC’s case against Deutsche Bank proceeded beyond a Matter of Inquiry to a full-blown investigation.

 By Matt Taibbi August 17, 2011 8:00 AM ET  (pages 1 - 2 and 9 full article HERE on RollingStone)

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Market Maker Speaks Out: Ways of a Market Maker

I was an OTC MM for about 10 years ending in the late 80's. Since then I have been strictly an investor. Since I have not been that up to date in MM rules I will only make statements that I feel fairly confident are still accurate regarding these activities. By and large most MM don't have a clue nor do they care to learn, about the fundamentals of the stocks they trade.

They just try to make orderly markets. When dealing with BB stocks it is very easy for a MM to get trapped into being short in dealing in a fast moving market. Reason being; most of the MM's in this stock are what are called "wholesalers" this means they don't have retail brokers "working" the stocks.

So they have to rely on what's known as the "call" from larger retail houses. If a "Big" retail firm like an E-trade calls up a market maker to purchase say 5,000 shares of a stock, they expect to get an "execution" from that market maker. If he turns them down, or only gives a partial then the "Big" firm will go to another MM.

If this second MM "fills the order" then that "Big" firm has a moral obligation to continue to give future "business" in that stock to that MM who performed (his life blood). This will go on until he "fails" to perform and so on.

Contrary to popular opinion the "Big" firms Do NOT neccessarily go to the "Low Offer" to fill a buy order (Or high bid for a sell). They "Go" to who they think will perform to fill the order and expect that MM to "match" the "low offer" in the case of a buy (bid in the case of a sell). Even though this MM might in fact be the "high bid" and not really want to sell any more.

As a wholesaler he must perform or he will get a reputation as a "non-performer" with the "Big" houses and will cease getting "calls" which means he will soon go out of business. I mentioned above that this activity is very significant to BB stocks. I say this because most of the trades in these BB stocks are "unsolicited" and are done through discount houses.

With the above groundwork laid, let me try to explain how market makers get short even if they like the Company; Lets say that a stock (shell) has been lying quietly at $.25 bid $.50 offered. A limit order comes into one of the MM's to Buy at $.50 for a thousand shares. Prior to this trade that MM may be "flat" (neither long or short any shares). He fills the order and is now short 1,000 shares. He may raise his bid hoping to find a seller to "flatten" out his position. But before he realizes it a wave of buyers have come in and cleared out all the $.50 offers. Now the stock is $.50 bid .75 offered. Here comes that "Big" firm he just sold the 1,000 shares to at .50 with another bid for 1000 at .75. He makes this print. Now he is short 2,000 at an average of .625. The market keeps moving and now its .75 bid 1.00 offered. Now he has to make a decision.

Just like investors, MM Hate to take a loss. So 9 times out of 10 he will now sell 2000 at 1.00 making him short 4000 but with an average .81. At this time he would love to see a seller at .75 so he can cover his short and make a few bucks.

But instead the market keeps moving up. Now it is 1.00 to 1.25 and here comes the buyer again at 1.25. He doesn't want to lose the call so now he needs to sell 4,000 at 1.25 to keep his break even point above the bid. Now he is short 8,000. Market moves up to 1.25 bid 1.50 offer here comes the buyer now he feels he must sell 8000 here because "stocks don't go up forever".

Now he is short 16,000. And so on and so on. If the stock keeps moving up, before he realizes it he could be short 50k or 100k shares (depending how big his bank is). _________________________

Finally the market closes for the day and on paper he may look all right in that his "break even" price may be around the closing price. But now he has to figure out how to entice sellers so he can cover this short. It is important to note that if this happened to one MM it has probably happened to most all of them.

Some ways MM's entice sellers; Run the stock up with a "tight spread" in a fast market, then "open" up the spread to slow down the buying interest. After it has "cooled off" for a little while lower the offer below the last trade right after a small piece trades on the offer then tighten the spread so that the sellers feel they can take a "quick profit" by "hitting the bid" on the tight spread.

Once the selling starts the MM's will walk it down quickly by only making small prints on the way down with the tight spread. Another way is by running the stock up in the morning, averaging up their short then use the above technique to walk it down in the afternoon.

Hopefully after doing this for several days, it will demoralize the buyers. The volume will dry up and the sellers will materialize thinking that the game is over.

Contrary to popular opinion, MM usually Do Not Cover in Fast moving markets either Up or Down if they are short. They Short More. They usually try to cover after the frenzy is out of the market. There are many other techniques they use but the above are the most popular.

This technique works about 9 times out of 10 particularly in a BB market. However that is because 9 out of 10 BB stocks are BS. Remember what I said above. Most MM's don't have a clue as to the value of a Company until they get trapped. If the Company has solid fundementals and a bright future. Then the stock will do very well. And the activity that caused the situation will prove to even help the future stock activity because it created an audience."

Market Maker's Operating Procedure


The savvy long-term investors never chase stocks up. For the most part that is momentum players and daytraders where most of it or what follows is dumb money. Instead the long-term investors use a couple of simple strategies in order to position themselves. One is to find a stock no one immediately sees has huge potential and accumulate. Long-term investors are not interested in trading against the public mind or the dumb money. That's where the majority of the money can be made but even more can be made if the base of a stock is held extremely strong by investors. However the second is not to doubt the research which is the underlying basis for going long and holding.


More and more investors are winning the game nowadays despite all bashers that float through the Internet that has become part of the game. Floor traders of market makers often watch CNBC, news wires and bulletin boards in order to follow the market during trading session. OTC BB market makers (MMs) don't use fundamental and technical analysis. However, what they do realize is a lot of dumb money does use this newest nitch charting or TA (Technical Analysis) to run a stock either up or down. To the MMs this is like taking candy from a baby. Simply they will paint the tape and use whatever tactic to affect the charting bands. Thus the public and dumb money they will have eating out of their hands. Effectively the MMs can show a strong stock growing weak by manipulating the close price in order to generate selling volume, delaying trading time to manipulate trading activities, or even stalling the ask without honoring orders to hold a stock price.

MMs follow a simple code of business when making a market in a stock especially an OTC BB. That is the level that stocks will seek that yields the most volume. Now this is very important because they make money on the volume buying at the bid and selling at the ask. In other words, by making the market they are buying low and selling high. Now smart money adheres to that rule, so do all the market makers. They could careless whether the stock is at $83 or at $0.23. All they care about is the action thus being able to sell stock at the offer (The high) and buy stock at the bid (The low). To increase their profitability, they make the spread as great as possible on as many shares as they can especially if the volume falls off.

When they have mostly all "buy" orders, that's not the price that's going to yield the most volume. They need both buy and sells to get the maximum action. Remember, MMs play the volume. If the volume decreases and there are mostly Buys that become a one way volume, Buy volume. So what they do is let the stock run up to a price where it runs out of steam. They fill all the buy orders there that they can and then comes the pullback one way or another naturally or induced. During the pull back they can buy tons of shares and flip them to those averaging down or trying to catch the bounce. At some price, the stock will be relatively stable and yield the most volume. Now that is the average price you will see


The average price is the point where a stock seeks a level where MMs can profit on the most volume. So during the day that is the price that MMs and momentum/day traders want to see the stock at. Why? Because they know the public and dumb money was chasing the price thing up. Most of the time, the MMs love a flurry of Market Orders which is a dead sign of an artificial run or momentum. Merely it is money in the bank for them. Most get hung in a momentum or day trade or by the tactics of Market makers, who are in the business to screw the public every chance they get and the NASD is not going to do anything about it. They are merely making the market liquid is there reasoning.


The market makers have created an added complication to the OTCBB's chaos of the already volatile intra-day price movements created by dumb money, momentum and day-traders. MMs can not relate to long-term holders in the OTC BB. That makes absolutely no sense what so ever. They feel a large percentage of trades in the OTC BB market consist of short-term or day-trades, MMs merely view the barrage of buy and sell orders as relatively neutral to the market. How they figure it is when the average dumb money buys shares in a company, the MMs feel or rather know with some certainty it is very likely that dumb money will want to sell back those shares relatively quick on the slightest drop.

Now somewhat comfortable with this logic the MMs merely short sells into the buying and attempts to take the stock down in an effort to "shake out" the weak. Since it is tough to know for sure whether a move is the beginning of a trend, or a routine shake out, this type of deception works quite well for the MMs. What the long-termers do to a stock is surprise the MMs because instead of falling the shorting has no effect and the price goes up. Now that puts the MM at selling low through shorting and thus having to buy high in order to cover.


Boy, when this happens, the MMs are not very happy campers. The investors and traders are supposed to be doing that no them. Now it becomes time to pull out every trick and tactic in the book in order to attempt to get a Bear Raid at every dollar mark or percent from where the stock started. Could be a penny in smaller priced securities? What MMs do is give you a chance to make a small amount of money for your momentum and day trading style by shorting it at these levels and trying to get a bear raid each time. Each failure is compounding the MMs short position so they let it go to the next level. Now come more deliberate tactics MMs use to coerce Bear Raid or panic selling.

Once the MM is caught short and the strength of the buy is overpowering the MM will want to cover his short position. So the MMs call up one of his friendly MMs and says some like "the weather is sure rough today." The MM along with the other "friendly MM initiates a down tick about the same time. Now this can also be done with a certain amount of shares such as an infamous 100 shares flag. This down tick gives the illusion of weakness designed to hopefully begin the bear raid of selling. The fickle, fearful, day trader, momentum and short term begin to sell out allowing the MM to cover his short position at lower prices. They will move it down quickly to get it to a price of least financial damage. Problem they have is long-term investors in the OTC BB. They start accumulating and buying comes flying in when they take it too far thus the MMs took it to the point of volume again and not only investors the other MMs step in the make money on the spread.


Alas the poor MM does not get to cover. Now comes various tactics like stalling, boxing, or even locking the Bid and Ask for a while.

Of course, MMs aggressively deny any sort of collusion designed to fix quotes or spreads, but a recent SEC investigation tells another story.

MMs have a vast resource of tactics and it would take probably more than my lifetime to figure them all out.

So how do investors somehow manage to overcome the obvious deception in OTCBB arena? One answer is indirection trading style by going long which the MMs do not expect. In the war between investors and public companies on the OTC BB vs the MMs, if the MMs have all the advantages due to position or other factors, direct confrontation such as momentum or day trading hitting the stock is a definite death sentence.

However, an indirect approach tends to weaken the path of least resistance before slowly overcoming it. The most effective way is long-term investors slowly accumulating and holding thus drawing the MMs out of its defenses making them as naked as their short position. This is war so this slow accumulation and holding for the long term easily achieves the desired effect to force MMs to cover and knock off the tactics or bury themselves deeper.

The MMs when caught will especially use every trick and tactic in the book to get a Bear Raid thus playing on the individual fear of most people. The MMs feel they have information and position advantages over the investors as long as the holding of the stock is in weak hands or short term holders. Since they are OTC BB MMs who believe all OTCBB companies are not worth investing and management is ineffective regardless what is happening within the company.Furthermore, MMs know they are in the position to impose a great deal of influence in OTC BB stocks trading when it suits their needs.


This inherent power of position enables the MMs to move the markets at any time up or down. As a result, the only way to draw them out of their favorable position is going long. Now this does not mean just any company but to effectively nail the MMs, Longs must find the great company on the floor and accumulate long before the MM tactics and games begin.

"Market Maker Speaks Out: "Ways of a Market Maker" 
Author: Unknown  

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TIM – Transparent Investment Management

No more hiding behind BS lawyers and industry regulations, no more sugarcoated-media-friendly generalizations, these are the results of a proven trading trading strategy. All others in the finance industry who refuse to share such information are cowards and frauds.

The finance industry is so incredibly full of BS, hype, manipulation and lies, it’s no wonder that so many investors and traders are confused–with over 90% of traders losing money! How can you invest with or listen to anyone when you can’t see EXACTLY how they make money?

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Tim already turned thousands into millions once before, now I’ve gone back to my $12,415 Bar Mitzvah gift money roots to repeat my feat so you can see EXACTLY how he did it. Every trade and trade idea detailed for your learning and earning pleasure. The best part about his strategy is that anyone can do this–no Ivy League diploma, no wealthy connections and certainly not much intelligence required. It’s all about dedication, adapting to evolving patterns and a willingness to learn.

And, as you’ll soon discover, He's not even that great at this. So, if I could turn my $12,415 Bar Mitzvah gift money into $1.65 million in 4 years–and despite his lack of formal trading and discipline, control my losses, too (never use leverage!)–you shall benefit from my experiences, both good and bad. Like Archie Manning guiding his sons to the Super Bowl, something he himself never even achieved, he will teach you to be more successful than me.

This is no get-rich-quick scheme, it’s no magic investing formula, these are the lessons he learned and rules he refined over the past decade that made him a millionaire before my 22nd birthday and helped preserve his capital in spite of his personal failings. If you want it badly enough, building great wealth using his strategy is possible and, more importantly, sustainable.

Learn from his successes, learn from his my failures, learn from TIM!

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