March 19, 2009
Dear friends,
It has been many years since i have seen most of you. I hope you all are doing well. The reason for this email is what i feel is an emergency situaiton for our nation. This is not a joke!
Today we found out how quickly Congress can act when enough citizens are angry about something. I am referring the the $160 million in bonuses that Congress taxed away form AIG Employees.
As most of you know the US Treasury (the tax payer) is now owner of about a trillion $$$$$ of
US banks, Financial, Insurance etc. This is owned in the form of stock in most cases. So your
value fluctuates based on the price that the market gives your investment.
What most of you do not realize is why we had to bail out the banks. In late 2007 two rule
changes took place. One was Mark to Market Accounting. The other was a short selling rule were
shorts were given the ability to destroy stock values with a shorting rule called the Shorting to
the Down Tick. FASB and the SEC are looking to make changes to these rules because of
public uproar. The hearings are April 2 for Mark to Market and April 8th for the DOwn tick rule,
What I do not understand is the reason for such long delay is such a critical matter. Think about
it,the bonuses given to AIG employees taxed away in two days. These bonus were not
destroying the financial markets day in and day out. So why a three week delay before a review
of these rule changes. Simple because shortsellers have so much power over world financial
markets!
Short sellers destroyed our bank stocks today for no other reason than they can. Bank stocks on
average lost 10 to 15 % of their value in one day. The tax payer and Treasury lost $100 billion
and the shortsellers made the money you lost today.
This means that taxpayers lost 1/10th of a TRILLION DOLLARS TODAY. You say so what its
only stock. Most people do not realize that short sellers ultimate goal is to destroy the common
stock and send banks and financial's companies into receivership. There is a little known rule
that if a company goes broke short sellers never have to cover their shares and they end up not
having to pay taxes on their gains.
The market crash over the past year or so has caused investors, pension funds 401ks etc to lose
over 11 Trillion $$$$$. This money did not disappear it went into very powerful short sellers
pocket. All because of two dangerous rules.
For those that do not understand Mark to Market I will give a simple explanation. It is the value
a company must place on an asset even if payments are being made of similar home etc at last
trade. So if there is no market for a home because homes are not selling it has little to no value.
Because of these rules, banks lose money on almost every loan they write unit the rule
changes.
Because of this the banks had to come to the tax payer begging for money or be shut down. The
writedowns on prforming loans was mindboggling.
These loans in over 90% of the case are performing loans. A simple rule change destoryed the
banks. A simple ruel change will stabilize the banks. So why not change. Short sellers do not
want this rule to change as it would stop the ongoing bank robbery that is taking place. Up until
October 2007 we had what was called the UP TICK RULE for short sellers.This required short
sellers to pay .05 up on the stock they were betting would drop. It created a little upward
pressure on the stock. In October2007 the SEC decided to bring in the down tick rule. What this
did was allow short sellers to sell a stock to the down tick. It gave powerful traders the ability to
overwhelm the buyers causing continual crash conditions in stocks. It has destroyed our banking
system that would be profitable if it was not for these rules. All of the losses are due to Mark to
Market Write downs. Because of these write downs banks have had to set aside money each
quarter as the losses mounted each quarter. This prevented them from buying their shares to
defend their stock price.
I say all of this so that you understand that if you and everyone you know don't start screaming
form the roof tops and emailing everyone you know demanding the up tick rule be brought back
and a major change in Mark to Market were asset values aver given a fair value based on cash
flow models or Cost basis accounting your trillion dollar investment will be worthless. You will be
on the hook for a trillions of $ with no hope of getting it back.You will also need to pay to bail
for the failed banks. This will cripple your children with a debt that they will never be able to
pay back.
If you demand Congress , the SEC and our President take action by immediately restoring .05 cent up tick rule and major change immediately Mark to Market. The stock owned by the
Treasury of all financial's will go way back up. We will see a massive rally in the markets and
banks will stop writing down assets. They will then have money to start hiring again. The choice
is your Trillion in debt or Trillions in profits. Bank of America has a book value of $35 per share.
It trades at less than $7.
You need to react now and email this letter to all of your friends and call Congress and the
President and the SEC.
The Treasury lost $100 billion today. Tomorrow it could be a few hundred more billion$. I have included direct links for you to click for all three government agencies.
http://www.sec.gov/contact.shtml
http://www.congress.org/congressorg/info/contact.tt
http://www.whitehouse.gov/contact/
email this letter to everyone you know and ask for them to demand action now!
Paul Revere once screamed the British are coming. Hear me and hear me good. Shortsellers are coming to totally destroy America as we know it. They want to destory our Treasury and leave us a beggar nation. The question is do you care enought to fight!!!!!!!!
Best wishes,
Timothy Kershaw