Where Are Financial Institutions and Brokerage Firms Getting the Shares to Loan to Short Sellers?

I have conducted a survey of many investors in the stock market who invest because they believe in the USA's record of excellent returns in the markets. I did not include speculators who short stocks or investors who hedge by straddles etc. Out of all the folks I asked, 100% of them said they would not allow their stocks to be lent out to short sellers. Most remarked they would have to be insane to bet against themselves by loaning out their stocks to be shorted. With this in mind I am asking all investors in the USA to check with their brokers or mutual funds to find out if any part of their portfolio of stocks are being loaned to short sellers as they may get a shock. 

Also people who put their money into long index Electronically Traded Funds known as EFT's should be aware that these funds may be used by the same companies to short stocks, therefore, those who are going long may be providing the stocks to the short sellers in the ultra short indexes?

Here are few other questions, amongst many more, that require truthful answers from the people that invested have trusted to look after their interests....

Most investors do not realize that their stocks can be lent out to short sellers if it is a margin (type two) account. A cash (type one) account cannot be lent out. Do you think the brokerage houses should inform their clients if their stocks are being lent to short sellers?

I am told 401k's cannot be used to loan to short sellers. If this is true where do the big institutions get the stocks to shorts since most of the money in mutual funds is in 401k's?

ETF index funds that are ultra short or double short are traded every day. Where do they get the stocks to short since every trade has to be shorting a large basket of stocks and will effect the price of every stock in that basket good or bad all go down together?

With so many short index funds why is there no regulations on how many can be traded because of their massive leveraging, they have the power to take down the stock market in double quick time.

With such fast trades in ETF short index funds how do we know if all the stocks are available to shorted as naked short selling is unlawful?

Who is loaning out the stocks to the short index funds?

Who is regulating the guests on CNBC many of whom have ulterior motives to talk down the price of stocks they have short positions. By allowing such propaganda they can synchronize their short selling with other speculators who want to make a quick buck by following the short selling leaders. This is how the oil price reached$147 a barrel and the same type of propaganda is being used to try to magnify the recession into a depression by self fulfilling prophesies. So called expert intellectualized propaganda is driving down stock prices to lower than the book value of many companies assets.

How come TV anchors have turned into market mavens who predict the direction of stocks in one to one discussions with each other? Surely they are on TV to ask questions and find truthful answers... Also, to read the news, not give personal negative slants with Perceptions, Ideas, Thoughts, Suggestions = PITS which many viewers I speak to regard as programs from hell.

Citi Bank has been bailed out once again by the USA Government. Did any company owned by Citi bank loan out Citi Bank stock to short sellers to take down their price to $4;00 and thus help to cause their own bailout?

Why does the SEC allow billionaire short selling Hedge Funds to control the destiny of troubled companies that sends them into bankruptcy when they may otherwise be saved given time to reorganize?

The founding fathers of America, built up ideas and blueprints to make it the greatest country in the world. In the past few years, sharp-witted, educated wizards have devised schemes that first of all over-leveraged complicated financial instruments. This in turn has fed the short selling vultures to sell America short and to hell with all who stand in their way. The greedy few get richer in money but poorer in spirit, while everyone else just becomes impoverish. 


More by :  Michael Levy

Top | Opinion

Views: 3408      Comments: 0

Name *

Email ID

Comment *
Verification Code*

Can't read? Reload

Please fill the above code for verification.