February 6, 2009

Dear Ms. Schapiro, I have been trying to convey this message but have found no interest to this date. This letter reflects ongoing activities which undermine all the efforts of the Federal Reserve and the Government to stabilize our economy.

The dire economic and social problem we are facing today is FINANCIAL TERRORISM perpetrated by speculators and HEDGE FUNDS GONE WILD facilitated by an incompetent and/or complicit SEC and other regulatory bodies. Speculators have illegally manipulated equity, commodity and bond prices that have caused the dramatic collapse in confidence that has then destroyed our nation's economic vitality. What began last year as wild speculation with oil prices and other commodities, quickly turned into a successful ongoing attack on our financial institutions. Weakness in our housing market and liberal lending was the original sin, but non existent enforcement of regulations permit these attacks that have caused our nation more economic harm than any other terrorist attack.

Equity manipulation:

When hedge funds and other speculators sell NAKED SHORT a stock, they are selling common shares that do not exist (SEC permits this). Speculators can therefore collapse any stock to the ground by “dreatin as many common shares as they wish, overwhelming any amount of buyers and therefore leaving destruction with every sell order. The Securities and Exchange Commission's (SEC) elimination of the short "uptick" rule a year and a half ago made this part of the manipulation extremely effective.

Credit manipulation:

Simultaneously, speculators make transactions in the so called CDS market and with absolutely no transparency "set" the pricing of these bond related contracts. The manipulated pricing of the Credit Default Swaps make it “tee that the targeted institution is having financial problems (no one properly regulates this market). CDS price movements are always presented in the media, combined with a collapsing stock price, as being very negative.

Media manipulation:

These "hedge funds gone wild" then move their other surrogates, the financial advisors and analysts, some of them well known college professors, many of whom are paid for their negative opinions and research reports regarding financial institutions. Rock star status is now customary for some of these individuals. They have secured television air time to spew their negative venom and find their reports published in the WSJ and other news media (without disclosing their conflict of interest in disregard of SEC regulations). Another perverse part of the media scheme is when speculators call andwhispe a very negative rumor to the talking heads of a CNBC, knowing the rumor will be transmitted but only identified as from a reliable "source".

Forced liquidation:

Once the attack is in motion other factors enter into play. Credit Rating Agencies react in a naïwe way by downgrading the credit profile of the attacked institution. Long term investors such as mutual funds are then forced to sell both equity and bonds. Mutual funds also have rules that force them to sell shares if their price falls under a certain price threshold. As these bond and equity prices go down in the ensuing panic, insane accounting rules force financial institutions to mark down their asset portfolios to unrealistic levels, creating false losses and feeding more panic. Why comment the effect this has on the average investor…!The financial terrorists know these rules all to well and take advantage of them.

End strategy:

At the end of this vicious strategy no company financial institution can survive...banks even turn against each other at this stagtrust and confidence disappears and fear is the name of the game. The financial terrorists win. Dramatic profits for a few at the expense of the American economy and the life savings of our middle class. Nationalization of financial

institutions or forced capitalizations or bankruptcy are the ultimate goals. This has been a coordinated action to commit fraud, just as bad as the Madoff scheme, but with much worse economic and social consequences.

There are no salary caps that will fix this. There is no amount of money in the stimulus plan that will fix this. Only STRONG INTELLIGENT REGULATION will help now and an unwavering enforcement of the law. If a hedge fund or speculator manipulated their way into huge profits, these profits are illegal and should be confiscated.

Let us call it what it is: financial terrorism.

Ms. Schapiro you are in a unique position to help recover the US economy and the savings of our retirees and middle class. If you require more experienced help at the SEC I am more than ready to serve. Sincerely from a very early supporter of President Obama,

Javier G. Mora