- Editorial Market Commentary -

(Receive all of this Part One article by Mark Faulk via Investrend Syndications by writing to content@investrend.com with “More Faulk” in the subject line.)

October 25, 2010 (FinancialWire) (Investrend Forums Syndicate) (By Mark Faulk) (Go to http://www.financialwire.net/?s=cmmtry for all recent commentaries.) — Author’s note: I began writing this article shortly after the economy collapsed, and then shelved it as Congress began working on their so-called financial reform legislation. Ever the optimist, I was hoping that they would finally do the right thing and clean up our financial markets. Silly me. In Part 2 of this series, I used the example of how real estate prices were determined by supply and demand as an illustration of how free markets are supposed to work. As it turns out, Goldman Sachs and their cohorts even figured out how to manipulate real estate prices by packaging and reselling mortgages, often multiple times. Oh the irony.

For years, advocates for stock market reform (including this writer since 2004) have warned the SEC, NASD (now FINRA), and even Congress and the White House about the very real dangers of naked short selling. A required disclaimer is that anyone who denounces illegal manipulative short selling has to also add "there's nothing wrong with legal short selling where the short seller goes out and borrows the stock before he shorts it". Advocates of short selling, mostly short sellers themselves, claim that it acts as a counterbalance to unreasonably high stock prices, and that they are "doing investors a favor" by bringing down stock prices in companies that are overvalued, a sort of built in system of checks and balances to keep the market from succumbing to that dreaded disease “irrational exuberance”.

***Today’s FirstAlert(tm) Daily is brought to you by ShareIntel(r) Shareholder Intelligence Services – ShareIntel(r) offers public companies the means to be completely aware of all trading activity, including that of “phantom shares” and where such shares are originating. For more information write to resources@investrend.com with “ShareIntel” in the subject line.***

Most people don't even understand what so-called legitimate short selling is and how it works (much less naked short selling), and there's good reason for that…it defies all logic. Try explaining either naked short selling or even legal short selling to the average person and the general response is "I don't get it". Nowhere else in the real world other than our financial markets can someone "borrow" something they don't own (without even notifying the person who owns it), and then sell it. And yet the basic tenant of a free market, a little something called "supply and demand", has always worked to set fair prices in everything from housing to concert tickets.

…to be continued…

Mark Faulk, author of “The Naked Truth: Investing in the Stock Play of a Lifetime”, which chronicles an incredible true story of fraud in our financial markets (at http://www.thenakedtruthbook.com/), has written over 150 articles on the topic of financial reform and naked short selling since 2004, and has logged hundreds of hours in radio and television interviews. He is currently working on a major documentary about financial fraud, due to be released in early 2011.

The FirstAlert(tm) “Money Index” is an indicator of the depth of market direction or indirection. While not always including the same stocks, the combined NYSE, AMEX and NASDAQ 25 most actives and combined NYSE, AMEX and NASDAQ greatest percentage losers and greatest percentage winners (weighted against pure monetary loss/gain) indicate the direction in which the mass of money is flowing, as well as the general focus of the market. Go to http://www.financialwire.net/2010/10/25/prcnt-wnnr-rsrch-2/ for today’s NYSE-AMEX-NASDAQ summary.

The FirstAlert(tm) Morning Digest lists economics calendar events, earnings announcements, financial community conferences, company presentations and more. Go to http://www.financialwire.net/2010/10/25/fa-am-digest-17/ for today’s The FirstAlert(tm) Morning Digest summary.

=========

Equity research on any public company is available through the Shareholders Research Alliance (go to http://www.investrend.com/synd0004 for more information).  Real-time, streaming research for companies and funds mentioned in FinancialWire(tm) news is available via the Investrend Research Syndicate (at http://investrend.stocksmart.com/ss/html/hpcompany.html).  Current valuation analysis research for companies and funds mentioned in FinancialWire(tm) news is available via the Investrend Research Syndicate (at http://www.valuengine.com/rep/searchsrep?pid=42&srchfor=).

FinancialWire(tm) is committed to serving the financial community through true journalism and providing relevant resources to investors. Standards-based, independent equity research on numerous public other companies is available through the Investrend Research Syndicate (http://www.investrend.com/reports) written by FIRST Research Consortium (http://www.investrend.com/FIRST) member-providers. Free annual reports and company filings for companies mentioned in the news are available through the Investrend Information Syndicate (at http://investrend.ar.wilink.com/?level=279). FinancialWire(tm), in cooperation with the Investrend Broadcast Syndicate, also provides complete, daily conference call and webcast schedules as a service to shareholders and investors via the FirstAlert(tm) Network’s “FirstAlert(tm) Daily” (at http://www.financialwire.net/news-alerts/).

FinancialWire(tm) is a fully independent, proprietary news wire service. FinancialWire(tm) is not a press release service, and receives no compensation from subject entities, companies, equities, or representatives thereof, for its news, opinions or distributions. Further disclosure is posted at the FinancialWire(tm) website (at http://www.financialwire.net/disclosures.php and http://www.financialwire.net/2010/04/23/safe-harbor/). Additional resources for investors are also accessible via the FinancialWire(tm) website (at http://www.financialwire.net/2010/04/23/investor-resources/). Contact FinancialWire(tm) directly via inquiries@financialwire.net.

Copyright © MMX, FinancialWire(tm); All rights reserved.

[ssryrsyr] [cmmtry] [edtrlx] [mrktqr] [ecnmclpolspl] [ssryrsyr] [frstlrtrlts] [frstlrtdlycmmt] [flkmby] [bnkngnknb] [nvstnggts] [ctvstsvtc] [rgltryrtl] [cmplncz] [gvrncnr] [gvrnmnt] [ntrctntcrt] [ltgnltgn]

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.