July 25, 2011
i reviewed my stockbroker's balance sheet and found that the accounts payable is about 5x the accounts receivable. is this from debt/equity swaps that have not been bought in? why haven't they? why are they relatively constant?
then i looked at some of the other major stockbrokers' balance sheets that are public. and i found that they had the same problems.
THIS IS NO SECRET. not to the SEC who has been "reviewing" them. not to anyone, except me when i opened my account. i had NO IDEA that stockbrokers would allow shortsellers to take my $. i bet many shortsellers have "bought in" and are now enjoying their fast cars and good food, but the brokers have not bought in.
the only thing i can surmise is that the SEC allowed stockbrokers to allow naked shortselling, that the stockbrokers have no interest in buying in these debt/equity swaps. and since there is no progress toward reducing these debts to their customer/investors, the stockbrokers think they can delay and mitigate this regulation.
what the heck did their auditors say about this huge debt? does anyone realize that it is owed to the investors?
do you expect them to be bought in even by 2012? how are they going to do that? the debts dwarf revenues and receivables? and the investors have suffered.
further, there is NO WAY any of those brokers qualify to have a positive margin. therefore none of them are qualified to allow any of their customers to sell short. all of them are credit risks. none of them have balance sheets that are readily available on their websites. most of them advertise. most of them have reviews about prices, software, news, etc. but they haven't been financially reviewed.
the brokers are not solvent. neither is our government. so who's going to protect the investors from this financial disaster? and why does it keep happening?
this is totally bizzaroworld.
if brokers can't service their customers and trade in the market any better than this, they should not be allowed to trade at all. then what? oh, yeah, the clearinghouse would pay if everyone went broke. and so would the SIPC. yeah, sure, that would happen.
if this was in a court of law, there would be BIG damages for breaching fudiciary duty to their own customers. do you realize that this is criminal action? we have taught our best and brightest how to defraud the public.