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Naked Shorts as Liquidity Machine

By Implode-Explode Heavy Industries

``The excess USTreasury sale (over and above USGovt deficits) is largely from naked shorting, marked by known Failure to Deliver. This explains how Wall Street and Big US Banks keep their liquidity flowing. These big banks are dead zombies bereft of income, so they counterfeit a source of income. The big banks (including investment banks) have seen a huge decline in IPOs, Bond issuance, and their lending business is way down also, seen in the credit data. They have a big source of income in the USTreasury Carry Trade, buying long, selling short. They have been parking those profits in the USFed, earning interest as Excess Reserves. These points require repeating so as to sink in. Legitimate income is not available.''

Full post as published by Mortgage Lender Implode-o-Meter on August 12, 2010 (boomark / email).