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         Daily Blog - Tiger Software

                            August 15, 2007

        The SEC Now Endangers Investors!

        Bear Raids Are Now Being Encouraged by
        Its Abolition of the 70-Year Ban on
        Short Selling on Down-Ticks and
        Its Unwillingness To Police Naked
        Short Sales.         

William Schmidt,     - Tiger Software's Creator
      (C) 2007 William Schmidt, Ph. D.  - All Rights Reserved. 

      No reproductions of this blog or quoting from it
      without explicit written consent by its author is permitted.

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      to william_schmidt@hotmail.com


          Blame The SEC for Making This Decline So Brutal
                If You're A Realtor, Blame SEC Chairman Cox for Destroying Your Business.              

A brutal stock market decline has started.  And the US Securities
            and Exchange Commission has just made matters much worse. 

                               Professional Bear Raids Are Only Starting

                  By abolishing the up-tick rule and not enforcing "naked" short-selling,
            the Securities & Exchange Commission has now made it much easier for
            professional  "Bear Raids".  These were so hurtful to stocks between 1929
            and 1932, that they were banned by law.  Last month  the SEC  bowed to
            pressures from reckless Wall Street insiders who plan to terrorize individual
            investors with steep drops in prices, artificially produced by massive naked
            short-selling on down-ticks.

                The 1929-1933 Stock Market collapse destroyed the lives and businesses
           of millions of people around the world.  It set in motion the tensions that
           created World War II and the death of 20 million souls!  The US Congress
           recognized how dangerous and instrumental trading abuses were in the
           financial carnage of the 1930's and they created new laws and set up the
           US Securities and Exchange Commission to protect investors in 1934.

For 70 years, short sales were by law to be only executed when stock was
          available for borrowing and the short sales were done on up-ticks or zero-plus
          ticks.  Selling short at the market, hitting the bid, was prohibited in the case
          of individual stocks.    This was to stop the predatory practice of "bear raids".

              Many write that the extent of the 1929-1932 collapse cannot be explained
           by blaming speculators like Jesse Livermore, Bernard Baruch and Jospeh
           Kennedy or organized cabals of shorts dumping shares they did not own
           on the market in a concerted way and then concocting bearish rumors and
           bleak sounding news to give to the press to scare the public....  Maybe so,
           but these unregulated speculaors surely made a very bad situation much worse.


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                                             "Torpedoing The Tape"

  Jim Cramer of CNBC described how loosely knit groups of short
                    sellers would try to crash the market down when he ran a hedge fund in the 1990's.
                    "On days like today when I was short, I would come in with a lot of firepower and
                    try to blast things down at 2:45. I wasn't alone. We were never organized, but we
                    did get the call from the trading desks that other guys were torpedoing the tape...
                    And don't forget, it's fun for these guys to try to break the market. And there's a
                    level of sport in the bigs that can't be denied."

                         Is this illegal manipulation?  Not according to the SEC or CNBC.  "Who
                    cares who gets hurt?"  Compassionless greed runs wild!   Such activities
                    require bears to be able to sell short without even having to obtain stock
                    to borrow.  No problem.  The SEC hardly ever does anything about "naked
                    short selling".  

                        Even Cramer is now warning that the SEC has gone too far:  

                              The "new stupid downtick rule makes it really easy to raid. How is
                                it that NO ONE remembers why the SEC set it up to begin with? ...

                                You can roll this market on nothing now. No specialists; unlimited downticks,
                                faster futures than common, ETF shorts, and no takeovers, so you can
                                run roughshod."

              For more information take a look at www.investigatethesec.com.  Cramer's quote comes from this source.

                       The SEC claims that their rule change will not have a deleterious impact on
                   stock prices.  They claim they have previously tested this in 2005 and 2006 with
                   a pilot group of stocks.  But this testing proves NOTHING.  Traders may have been
                   on "good behavior" in it becuase they knew the SEC was watching.  And it was
                   not undertaken in a weak market environment.

                       The SEC has brought back much greater down-side volatility since their
                   abandonment of the 70 year rule against selling short on down-ticks.  Now it
                   does not take big volume to drive stocks down.  People who think that light
                   volume on this decline are making a big mistake! 

                      For more information on Chairman Cox's background, see my earlier blog.
         Don't let this happen to you.  Don't be a "deer in  the headlights".   

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