Why Short Selling is Unconstitutional 06 25 2012
I do not believe that the founding fathers had knowledgeable
exposure to short selling in a stock market or they would have banned it. Short selling is indeed what has lead to
every great financial crisis in the United States including The Great
Depression. Short selling is the act of
selling someone shares of stock that you do not own. The person who short sells makes money when
the financial position of a company and its stock goes DOWN! That is right DOWN! Who would ever root for an American Company
to lose? You would swear that it was the
influence of English Bankers sore on losing the Revolutionary war and trying to
exert influence on the United States economy in order to gain control of
it. The King or Queen trying to control
what got away from them?
Stated phrases from the Constitution will be in quotes.
Phrase from the first sentence of the constitution stating
its purpose, “insure domestic tranquility,” how
does betting against a company and a shareholder “insure domestic tranquility,” this rings false in the heart of even the
least educated American.
Also in the first line, “promote the general welfare,” How
does this machination that really only benefits the profitability of the
brokerage firm and its employees, “Promote the general welfare.” This does not promote the general
welfare it is the exact opposite of that.
All kinds of financial fraud are based on short selling, including
marking up bad companies and taking them public when they should not be. All of the Derivatives that almost bankrupted
the United States were based on the “counter investment” which is really a form
of the Short Sale. With only 10% money
down to make an investment in the roaring twenties many made money in the stock
market as volatility wiped out the small investor rather quickly. When a person buys stock on margin, meaning
the borrow money from a broker, they are not really buying stock at all. What is occurring is that they are really
creating an accounting entry on the books of the brokerage firm. There should indeed be a government inquiry
by the Governmental Accounting Office or the Department of justice as to what
percentage of investors who borrowed money from a broker to buy stock made
money in doing so. The brokerages also
have a few more tricks up their sleeve with regard to the short sale and buying
on margin which is often part of it.
These tricks include a back office person determining, at the
inopportune time for the investor, that the broker has indeed determined that a
stock is so risky that they will no longer allow you to borrow as much money to
buy a stock you already borrowed from them to pay for. With one keystroke on the computer the
investor has to sell because the broker has determined that the loan that he
took to buy the stock should be more than it was initially when he purchased
it.
It makes absolutely no sense that the balance of shares
short of a company should be allowed to be as great as it is in our financial
system. If the reason that the brokers
offer for them needing to sell shares short is that it is needed in order to
make an efficient market then you would expect them to be required to clear
those short positions in a reasonable time.
I know what you are thinking one way to compromise would be to set a
time frame that would allow them to clear these positions in- like a week. But what would happen is that there would be
accounting tricks that would allow them to state that the positions really only
represent newly made sales to investors and therefore that balance represents
current activity. That is how they would
lie.
But back to the Constitution.
Per Section 8 “Congress shall have Power to…”… “To provide
for Punishment of counterfeiting the Securities and coin of the United
States.” The common stock of
corporate America is indeed what constitutes the Securities of the United
States. And what can be more of a
counterfeit investment than selling someone a common stock that you do not own. It is like a Carnival game it is so crooked. Selling someone something that you do not own
nor intend to buy is indeed the equivalent of counterfeit. Our Founding Fathers could have never
conceived of the growth of Corporate America and the fraudulent nature of the
short sale and the devastating effect it would have on our economy throughout
the history of the United States. What hypocrisy
of public service Congress has committed, they had granted themselves the right
to insider trade. That means being able
to buy and sell and profit from information that was not available to the
public. If congress granted them such an
egregious right what confidence can we have that they will do the right thing
with regard to the spirit of the meaning of, “Congress shall have Power to…”…
“To provide for Punishment of counterfeiting the Securities and coin of the
United States.” The Federal Reserve primarily issues
securities and coin to what is termed money center banks. They are indeed corporations of the United
States. So here we have a de-facto tie
between the actual wording of the constitution and how it directly applies to
our modern banking system.
“To define and punish Piracies and felonies committed on the high Seas,
and Offenses against the law of nations.” Our Founding Fathers would have never
conceived of the short sale and its similarity to piracy. In fact most Americans do not have the
financial acumen to understand the nature of its piracy and when questioning a
so called financial expert they will be given blunt responses that they will
feel that they should admit to understanding because they do not want to look
stupid. That is a sales technique. An Investor who questions a broker will
indeed by placated with gloss over responses as a different topic is then
brought up and they are made to believe that they were just taught something
but weren’t.
I know what you are thinking. If we ban the short sale rule many jobs will
be lost because the brokerage firms won’t be as profitable and won’t be able to
pay as many employees. My counter
argument to that would be, “When we put the mafia out of business do we lose
jobs?” Some would argue that. I would argue that when you clean up
corruption you do indeed create more jobs.
Section 10 reads, “No State shall…make any…Law impairing the
Obligation of Contracts.”
Selling someone something that you do not own nor intend to procure is
indeed “Impairing the Obligation of Contracts.” And if the founding fathers did not
want it to occur at the state level that is prima fascia evidence they did not
want it indoctrinated at any level. This
is indeed prima fascia evidence that our congress has not been following the
constitution of the United States. Where
in the Constitution does it say Congressmen may profit from inside
information. Who are you trying to kid
if you try and convince me that position is a true one! It runs counter to the spirit of the creation
of the Constitution in every form. So
can we indeed deem those congressmen who willingly participated in it guilty of
enacting laws that are unconstitutional?
And is this prima fascia evidence that many laws created by congress
need to be reviewed in terms of their constitutionality? Who can argue that this isn’t true?
Relevant Constitutional phrases with regard to the President
and this issue:
Article 2 Section 1 “I do solemnly swear (or affirm) that I will
faithfully execute the Office of President of the United States, and will to
the best of my ability, preserve, protect and defend the constitution of the
United States.”
Article 2 Section 2 “He may require the Opinion, in writing, of
the principal Officer in each of the executive Departments, upon any Subject
relating to the Duties of their respective Offices.”
Barrack said his door was open but Congress did not
cooperate with him. Barrack this is how
you get busy. You make inquiries to
Congress on every issue that you feel is relevant and get their responses in
writing like they are required to provide.
The American People have a right to see how any Congressman responds to
the Commander in Chief on any issue. And
if a Congressman has responded in what can be considered a negligent manner the
American people have a right to know that response, whether based on their own
opinion of the response or your opinion of the response. You have a right to provide your opinion of a
response.
What is the short sale rule and I mean what is its true
nature? The Short Sale rule is creating
a value for something that is less than it is in order to profit from the
difference. Who would think to do such a
thing? Would a person who believed in
this rule also find ways to apply the concept to human beings? What has been the long term affect of this
wrongful appraisal by the appraiser? Has
such a fraudulent appraiser also found a way to wrongly appraise human beings? Would founding fathers write it into the
Constitution that human beings are to be wrongly appraised and labeled by
fraudulent appraisers? Of course not,
that is the antithesis of the Constitution of the United States. Many Americans proudly shed their blood to
prove just the opposite.
Article 2 Section 4
“The President, Vice President, and all civil Officers of the United
States, shall be removed from Office on Impeachment for, and Conviction of,
Treason, Bribery, or other high Crimes and Misdemeanors.”
Is instituting and maintaining the banking system of a
foreign Country we once fought a bloody war for our freedom and independence an
act of Treason? When it has lead to a
multitude of financial crisis’s that have almost destroyed our Country that is
indeed Empirical Evidence that it is!!!
© 2012 Thomas Paul Murphy
Originally published on 06 25 2012 at: www.themilwaukeeandwisconsinnews.blogspot.com
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