Spooky Economy

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Burrell is a highly knowledgeable financial expert and industry authority with over 30 years experience working for major national and international brokerage firms. He interviews in a clear, no-nonsense, “tell it like it is” style that makes difficult-to-grasp financial concepts seem easier to understand. [1]

Burrell has spoken out on an illegal and dangerous practice called “naked short selling”, a method where the perpetrator creates counterfeit electronic shares of a stock and then sells them quickly. When the market is flooded, the price of the stock goes down and then the legal holders of that stock panic and sells theirs also. This causes the price to go even lower. After the price is at the bottom, the perpetrator buys the stock back for far less money and pocket the money. Under U.S. tax rules enacted in 1993, if the short seller is able to drive the company into bankruptcy, the short seller is entitled to keep all their profits tax-free. [1@27:23]

According to Burrell, the fraud is so widespread that there are more “shorts” than the total float of the market. This is to mean that there are more “borrowed” stocks than actually exist. [1@5:42]

Burrell states that this practice can net millions of dollars and is believed by financial experts to have been the cause of investment firm Bear Stearns' destruction.

Burrell has also spoken out about how weaknesses in the clearing and custody system (the “escrow” of stocks) is regularly being "gamed" by bankers, hedge funds and organized crime. He believes the ultimate goal is the illegal transfer wealth from the United States to foreign entities.

Quotes

We've allowed our clearing and custody system to essentially be gamed... Market bankers, hedge funds, off-shore banking interests, many others including organized crime have jumped through holes in our clearing and execution services... and have gamed those systems to the point where they are now able to manipulate markets... The most recent episode is what happened to Bear Stearns... In a period of literally 24 hours it was gone.[1@6:00]
There was a company here that went through a major proxy battle with some hedge fund opponents... They finally ended up in an annual shareholders meeting with a proxy battle... [the company] had 60 million [shares] outstanding... [and] 80 million proxies showed up to be voted [on]. Prima facie, 20 million shares of that stock had been counterfeited...[1@8:30]
Try to understand that in the [year] 2000 raid, the Wilshire 5000... lost over $17 trillion in market cap (value), top to bottom. Seventeen trillion dollars was, at that time, three times the total retirement assets in all accounts of that type in the United States. So the average American retirement account conservatively was down 50 to 75 percent, if you had never sold a... bond.[1@41:10]
Effectively, RegSHO (a rule against naked short selling) is a fraud.[1@10:31]
The real problem is settlement failures which are intended to do two things. One, they are intended to launder money criminally and to evade taxes offshore – by moving the trades to offshore positions. Those a principal activities of what's going on right now.[1@14:15]
What it is is part of a systemic attack on all wealth in this country. It's been ongoing for more than 35 years, that I can document.[1@14:43]
Regarding the fleecing of American investors in the 1974 drive to American energy independence and the current discussions on energy, Burrell states “What we have now is a whole new movement in the same direction that will repeat the same crimes over and over within six to ten years, and to me, it is one of the ugliest chapters of American history.[1@17:31]
The SEC doesn't need a housecleaning. The SEC needs to be broken up. You need to take the enforcement division and sent it to DOJ and take the market reg people and send them to Treasury.[1@20:44]
[Because of naked shortselling], if an Intel or Oracle or Microsoft were started today they would not have... an ice cube's chance in Hell.1@21:52]
Bluntly, I would be guilty of a breach of fiduciary duty if I advised an American company today to go public in the U.S. Our markets are corrupt from top to bottom, front to back.[1@32:34]
The power of the people who are profiting from this is so enormous, financially, that they have managed to corrupt system from top to bottom, front to back. And they have been able to obstruct effective legislation.[1@32:51]
For years there was a conspiracy after the ERISA Act of 1974 created the monster that is America's modern retirement systems, literally, the criminals were in a feeding frenzy trying to figure out how to rip off pension funds and rip off the values of real estate created by the boom in real estate. Well, they managed to figure out how to do both.[1@33:50]
In these foreclosures, they can't even find the title. It's the paper the securitized assets that the mortgage papers and titles were put into have been sliced and diced and sold and resold so many times they can't find the title to the homes. If anyone thinks that's accident, they're not just being naïve, they're being irresponsible.[1@34:25]
On July 12, 2008, Burrell said “The Bank for International Settlement put out a report last night that forecasts a global economic meltdown as a result of nothing more than the failure of the entire real estate mortgage market in the United States. The mortgage market by itself, they are predicting, is going to drag entire world into a depression that will make '29 look like a girl scout camp.”[1@43:07]
In the end there is going to be a real price paid by people who own real securities (stocks) because, real honestly, the thieves here have stolen so much that they can't be dealt with without crashing the system, is my concern.[1@44:44]
Medicare/Medicaid is going to bankrupt in about two years, 2011-12.[1@46:56]
The people who are running this game on the world economy right now, they are smart people, and they are wealthy people. They are powerful people and they are ruthless people. And people who get in their way are going to pay a price.[1@47:40]
You have to throw the bastards out... and you have to take the money back from the people who stolen it. Because otherwise you're sending a signal 'Hey, you can steal big and get away with it.'[1@48:25]
I got one group of shareholders in a company that was raided [by shortsellers] horrifically. It's chairman and CEO was jailed in literally a maximum security prison and kept in solitary confinement for a debt – a fine that was under appeal to the appeals court. They accused him of being in contempt because he ran out of money for which he could pay the fine.[1@49:17]

Personal Concerns

None reported publicly.

Proposed Solutions

  • "Throw the bastards out" (Remove the wealthy intellectuals gaming the system) [1@48:25]
  • Break up the SEC (U.S. Security Exchange Commission) and delegate it's responsibilities [1@20:44]

Must-see Resources

  1. Audio: The Greatest Crime in History [July 12, 2008]
    URL: http://www.financialsensearchive.com/Experts/2008/Burrell.html
  2. Video: Phantom Shares (on topic of naked short selling, Bud Burrell's concern)
    URL: http://video.google.com/videoplay?docid=4490541725797746038#

Questions To Ask

To be added

Added October 28, 2009 Posted December 4, 2010 Revised (n/a)

This is my opinion. It's a work in progress. I hope it's helpful.

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