Market Literacy

123. A bare-bones site to catch you up to speed. ABC.


Jumping right in...

The following segment is only about 15 minutes long and is well worth the time to watch and will -- quite likely -- be considerably educational. Importantly, it lays some groundwork to better understand the subsequent information.

The Jon Stewart segment is primarily about Wall Street, lobbied-for loopholes, and something called "Payment-for-Order-Flow." To briefly summarize, it's a method by which stocks can be bought and sold - with benefits and drawbacks to everyone involved, some more than others. To expand, take these two quotes from industry professionals for a better idea of the situation:

"When you place a market order - 90-95% do not go to the 'lit' exchanges - do not go to NASDAQ or NYSE, they go to wholesalers and they don't have order by order competition and part of that is because of what you just said; Payment-for-Order-Flow which is, yes, banned in the U.K., in Canada, and Australia and the European Union..."  - Gary Gensler, 33rd Chair of the Securities and Exchange Commission (SEC)

"...stocks that have a high level of retail participation, the vast majority of order flow can trade off of exchanges, which is problematic. That price formation is not really reflective of what supply and demand is." - Stacey Cunningham, President of New York Stock Exchange (NYSE)

With Payment-for-Order-Flow (PFoF), the very most basic foundation of much of the stock market and free market is rendered utterly meaningless. If the heart of "the stock market" and a "free market" is supply and demand, then PFoF could be argued to be something akin to heart disease.   

Next on the chopping block...

... is an article from Bloomberg Markets from all the way back in 2005, though still eminently relevant. This article is difficult to find and is sourced from the Wayback Archive, which catalogs large swaths of the internet and describes itself as "... an initiative of the Internet Archive, a 501(c)(3) non-profit, building a digital library of Internet sites and other cultural artifacts in digital form."   

Via Bloomberg Markets:

In a little-known quirk of Wall Street bookkeeping, when brokerages loan out a customer’s stock to short sellers and those traders sell  the stock to someone else, both investors are often able to vote in corporate elections.

With the growth of short sales, which involve the resale of borrowed securities, stocks can be lent repeatedly, allowing three or four   owners [or more] to cast votes based on holdings of the same shares.

The Hazlet, New Jersey–based Securities Transfer Association, a trade group for stock transfer agents, reviewed 341 shareholder 

votes in corporate contests in 2005. It found evidence of overvoting—the submission of too many ballots—in all 341 cases. 

(emphasis added) 

You're encouraged to read those three paragraphs again and ruminate on what that may entail.  

[Citation: False Proxies by Bob Drummond, Bloomberg Markets; alternative source here.]

George Carlin in Dogma

The lobbied-for loopholes related to corporate voting undermine the most basic and foundational elements of democracy and voting - both in business terms, as well as nation-state terms - particularly if government can be influenced by corporations. Do you live in a country where corporations influence government?

Shareholders and the associated corporations/companies can be taken over / misguided / misled / duped by way of sham voting via short-selling and the subsequent counterfeit/phantom shares - where and when elections may result in highly questionable policies/decisions implemented, as well as an installation of corrupt officials & board members, resulting in dubious business-practices wherein ulterior motives are rampant, along with the potential creation of a lobbying, bribing, and (frankly) psychopathic organization. 

Indeed, that's what has been happening. 

When we hear talk about "corporations having too much power!" - this is one of the main mechanisms making that possible. 

In one of the latest tallies in 2018, there were 134 instances of overvoting, equating to 5.9 million votes being discarded and not counted.

[Citation: Letter from Securities Transfer Association (STA) to Securities Exchange Commission (SEC) (page 3)]

"We've seen problems which came really to the fore, particularly with Procter and Gamble's proxy fight, which nobody really knows what the outcome was. There were enough "hanging-chads," so-to-speak, that that was never really resolved." [source] 

See primary research on the subject here: "The New Vote Buying: Empty Voting and Hidden (Morphable) Ownership" 

Onwards, bravely...

If you buy a car in full, you get a title with your name on it. Not so with stock/shares - contrary to popular belief.  What you get is an I.O.U. Shares you purchase through a brokerage are not, technically, yours - your name is not on them - you do not own them... which has serious ramifications. In short, you have access to them, which entails buying/selling/etc..., but you are not the true owner. Someone else is the owner (Cede And Company) and that equates to other people/organizations/companies potentially using "your" shares - legally and illegally - without your knowledge. 

Once again, I'm asking you to understand...

If you purchase shares with a brokerage and/or have a retirement fund, the shares you think you own are not actually yours. You are a beneficial holder, not a share holder. They are not in your name and are not, technically nor figuratively, owned by you. Perhaps hard to believe, but the unadulterated truth nonetheless.

More to the point: shares, if not in your own name, are are, very, very, very, very likely, being used against you in convoluted schemes similar to the 2008 Housing Derivative Meltdown - same sort of derivative-based shell-game & dishonesty, but with slightly different financial instruments, using more techniques of deception - made possible through 1) Wall Street lobbying & associated loopholes ... 2) asymmetrical information access & gathering ... 3) grey area insider trading ... 4) expensive subscription data services ... 5) raw market manipulation ... and more. 

An analogy:

It would be as if you bought a car in full, paid in cash, but the dealership keeps the title, and then, at night, they take your car and use         it for joyriding, taxiing, rentals, and more - putting miles on it and even damaging it - while you have very little say in the matter.

It's criminal, at the end of the day. That's not new, though, when it comes to much of Wall Street. Habitual criminality is a main-stay - and even encouraged and fostered - in much of the financial industry. 

Again, when you hear talk about "corporations having too much power!" - this is another mechanism making that possible.

Bernie Madoff

Importantly and a main impetus for this site existing is this: you can insure shares are in your own name using the SEC sanctioned Direct Registration System which legally must be processed when requested - by you. Again, just so we're clear, if shares are held in a brokerage, they are NOT in your name and you do not own them, unequivocally.  You must use the DRS if you want the protection afforded by such status.

By "DRSing" your shares they are then placed in your name and are now truly owned by you - such that they can't be used against you in classic Wall Street corruption, loophole abuse, and confidence trickery. 

This website talks more about the DRS at length, as does this website. (hint, hint) Both are well-worth the time to peruse - there is a huge amount of value (hint, hint) in both sites.  

A case study and example...

Forget about Gamestop. There's nothing to see here. Move along. Nothing to see here.

(Narrator: There was something to see there.) 

An analogy: 

What we're talking about here is similar to an airline overselling tickets for a flight. 

In this case, it's to the tune of many, many, many seats over capacity - magnitudes greater, it looks like, in fact. 

As such, the airline needs to get volunteers to be bumped to other flights. Though, in this case, the resentment and grievances towards       the associated organizations is such that no one is interested in being "bumped" unless the perks are very (*ahem* very, very) valuable,     more than anything any "airline" has ever offered. 

By directly registering shares you're guaranteeing a seat on the flight - turning a counterfeit/phantom share/ticket into a real one - and      taking part in the price discovery associated with that.

...for the cost of a few gallons of gas...

We're talking about a company that is cash flow positive (Free Cash Flow; FCF), no long term debt, ~$1B in cash/treasuries and another ~$1B inventory, moving into the "digital property rights" space, which has been missing from the internet since it was invented -- all lead by a team assembled via a 30-something billionaire entrepreneur who took Amazon to the cleaners with Chewy. A company trading at less than 2X assets alone, while currently undervalued by Morningstar where insiders are buying much more than selling. The latest quarterly report shows a profitable company for fiscal year ending January 28, 2023.

There's also a shareholder-base that's die-hard and world-wide with loyalty like nothing the market's seen before - who are DRSing shares every single day. It's completely and utterly, 100% unprecedented. 

As well, and possibly more important than anything else, there's a very good chance to expose and hold Wall Street accountable for destroying families and lives across the nation and world without accountability...

...for the cost of a hamburger and appetizer...

Let's expose Wall Street's fraud and criminality...

                                                                                                                                                                                                   ...and repossess ill-gotten gains from two-bit conmen.

You are encouraged to protect yourself using the information presented here. The Self-Regulatory Organizations (SROs) throughout the broader stock market - ("We investigated ourselves and found no wrongdoing, Sir! <drool>") - such as the Financial Industry Regulatory Authority, Inc. (FINRA) and the New York Stock Exchange (NYSE), as well as the Depository Trust and Clearing Corporation (DTCC; i.e. "Cede & Co."), will not and do not have your best interest at heart. You are being backstabbed, whether you own stocks/securities or not. Now's our chance to turn around and defend ourselves.

This website is dedicated to education and market literacy. Nothing here should be taken as financial advice.