Reporting From Freedom Fest Edition # 3:
The Art of Manipulating the Market Dear Investor’s Daily Edge Reader, What I saw yesterday at FreedomFest in Las Vegas was enough to agitate me beyond belief. Anyone who’s a regular reader of Investor’s Daily Edge knows that we hate market manipulation. We despise when big players take advantage of the market to screw the little guy. And yesterday the CEO of Overstock.com, Patrick Byrne, showed the clearest evidence I’ve seen yet of such manipulation. For three years he’s been preaching about naked short selling (not to be confused with short selling). Naked short selling is when a big institution sells shares short that they have no clear possession of. In essence, they give the other firm an IOU which can last months, even years. Patrick said that big market players were manipulating stocks down by issuing a huge amount of naked shorts against the stock (which increases supply of the stock, in essence pushing its value down). Because he brought this out into the open, Wall Street thought of him as the boogey man. I plan on covering everything he said in full detail. What i'll reveal is so sensational, that Patrick and one reporter covering his story allegedly received death threats from some of these 'big players'. Stay tuned for the complete story in the weeks ahead. When I tell you that this is revealing stuff, I really mean it. You will never look at the market the same. But Not Everything Was About Manipulation After Patrick’s speech, I saw Peter Schiff and Rick Rule talk about the need - or lack of need – for more regulation in the markets. They mentioned that banks and financial institutions got themselves in the problem they are in today because of improper regulation. With that said, when Ben Bernanke asked for more powers yesterday, Rick and Peter were completely against it. That’s because, as Rick Rule put it, “when you incentivize stupidity, people will willingly act stupid”. So how did the government incentivize stupidity? By privatizing profits and socializing losses. What that means is that because the government is willing to bail out huge financial institutions, they’ve essentially taken risk out of the market. And what that means is that market participants are more willing to take on risk, and not worry about the repercussions such risk might have. The Fed trying to avert a recession in 2001-2002 and even today was one example. Bear Stearns was a clear example. And Freddie and Fannie may be the next example of that. Because risk has been taken so out of context in the market, that puts us in a very serious situation. You can’t avert a recession because it fixes the problems that the boom created. And when you put that recession off, it just causes a bigger problem later on. But today the situation is so grave that putting it off means that we could see hyper-inflation, super-high interest rates, and a lot of pain. The recommendation? Diversify internationally, buy precious metals, and get out of the dollar. And we think that getting into cash-rich companies that pay you steady dividend payments, is another great way to try and avert the problems that are on the horizon. Why? Because these are the companies that have the cash to withstand any serious market downturn. Your Tuesday editor Andrew Gordon found one such company with $4.81 billion of cash on hand. Not only that, but they are extremely underpriced and getting ready to hand loyal shareholders a $606 million payout. If you want to know more about this company, then read Andrews urgent report here. But be aware, you need to be in this company by September 8th, or you’ll miss getting this payout. More to come… Today we’ll be listening to the CEO of Whole Foods talk about freedom, commodities trader Kevin Kerr talk about international investing, and David Morgan talk about the benefits of precious metals investing. Those are just a few of the topics we’ll see today. And we’ll keep you fully updated and let you in on the great interviews we’ve had with some of the presenters here. Till then, stay free, Charles Delvalle P.S. Let me know what you think of this piece at feedback@investorsdailyedge.com [Ed Mention: The markets been heading south almost daily. It’s about time you crash-proofed your portfolio by getting into high-income paying companies that continue to give you quarterly paychecks no matter what happens in the stock market. Andrew Gordon has found one cash-rich company with over $4.81 Billion that is readying a $606 million payout. Read his urgent report here to find out all the details and protect your portfolio form the oncoming market crash.]
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