Seeing A Bigger Picture, What you have been deconstructing at Wikipedia Review... Options

[Patrick Byrne]

Congratulations on the great progress you have made defrocking some high clergy of Wikipedia since I last visited.

Full disclosure: My name is Patrick Byrne. I work at Overstock.com, which for about one year has employed a former journalist named Judd Bagley to oversee the creation of our car tab and a Wiki called "Omuse," handle relations with the press, and design a new tab (in the works). Long before Judd joined our company, and as a hobby since, he was analyzing techniques employed by a small group of people to hijack social media. Using the handle "Wordbomb" he posted the results of his analysis on this site and on a site he created called "antisocialmedia.net" (for the record, he did not tell me about antisocialmedia.net before he did it, nor for some time after its creation would he confirm that it was he who was behind it). In your admirable endeavors to unscramble what is going on behind the scenes at Wikipedia, Judd/Wordbomb has done his share of work. By a strange coincidence (?), one of the people whose pefidy this community has uncloaked, Slim Virgin, turned out to be a woman from my own past, and I posted elsewhere on this site such information as I thought might be helpful to you (which Mr. Brandt seemed to appreciate). I say this all in full disclosure because the financial press labors to find any incompleteness in my posts on the Internet, apparently finding something unholy in my exercise of first amendment rights without availing myself of (or recognizing the need for) their services.

Now to my point: Nothing is more irritating, I know, than to have someone suggest to you that your own cause is really part of a bigger struggle. One always suspects an attempt to divert one's energies into whichever other cause that speaker favors. So I insist that I seek no diversion from your own current, noble, efforts, when I suggest to you that the threads you are pulling here lead deeply into the heart of a financial scandal that has been percolating into the headlines for six months, and may swamp any financial scandal of our lifetime.

On another message board within Overstock.com I have begun synthesizing information about that scandal, starting by creating one concise, cohesive overview post. Rather than gum up this board with information about that other financial scandal, I will give a link to that overview post: HOW THE SYSTEM REALLY WORKS: INTRO

After you have read that you will wonder if there is independent confirmation of what I wrote there. There is a great deal, and organizing it will be the subject of my subsequent posts. In the meantime, however, consider taking 25 minutes to watch a Bloomberg Special Report, "Phantom Shares". Bloomberg has the most "elite" viewership of any news organization in the world (which may count against it in the eyes of some radicals, I know). Consider what it means when a news service at the pinnacle of the Establishment reports that our capitalist model is powered by a reactor that almost no one has heard of, and that this reactor that has a crack in it (and why it is that only such an elite news service could run that story).

Given my earlier involvement on the Slim Virgin issue, I hope that Daniel Brandt and you will forgive what may seem like a commercial interruption. I simply wish you to understand how what your are confronting here really is part of a larger puzzle, so that you may know the stakes riding on your efforts.

Warm regards,
Patrick M. Byrne
CEO, Overstock.com

[Unrepentant Vandal]

Most traders do not set out to fail to deliver. But my understanding is a stock trade is still settled after 4 days, and that considerable pit trading still goes on in the US equity exchanges. In this situation, naked short selling is bound to happen, because humans make mistakes. And no one has really explained how market makers can operate without naked shorting unless they were to make greater spreads - in which case there goes liquidity!

I absolutely agree that setting out to naked short sell is market manipulation, but that news report doesn't really provide any evidence of that.

[Patrick Byrne]

I'll address two points in one post.



Vandal says:

It isn't practical to ensure that it is possible to borrow what is being sold, one just has to assume that it is. Inevitably this leads to occasional naked shorting.

That can be differentiated from deliberate naked short selling with no intention to settle - but there is little evidence of this happening...

I absolutely agree that setting out to naked short sell is market manipulation, but that news report doesn't really provide any evidence of that.

In fact, Vandal, the SEC hired an economist, Leslie Boni, to study that very question. She was unique in that she was granted access to a great deal more data than other researchers have ever been allowed. She used it to test the hypothesis that these unsettled trades are arising out of "random human error" as some say (I call it "The Dog Ate My Stock Certificate Defense"). If it were truly random human error, then these errors would be spread across the market like a smooth layer of peanut butter, right? In fact, however, they are heavily concentrated in a comparitively small number of stocks, which is inconsistent with the hypoethsis that they are random, and consistent with the hypoethsis that they are deliberate, or "strategic" (unless one is going to postulate the existence of dogs smart enough to eat only certificates of high neg rebate stocks).

Strategic delivery failures in U.S. equity markets
http://www.sciencedirect.com/science/artic...f955d51c395a8fe


Pwok says, "CEO Byrne introduced the Overstock.com dispute here, and I told him exactly what I thought of him, his company, and the dispute. "

You make my point for me once again, Pwok. Other than the introductory disclaimer identifying myself I have done everything possible to divorce this dispute from Overstock. The post to which I linked does not even mention Overstock. The fact is that so far you have refused to engage this subject beyond the facile bromides and knee-jerk insults one sees on a Yahoo message board. Good luck with that.

Patrick