Byrne, a Utahn who founded Overstock.com, claims that New York financial media and law firms have teamed up with big-wig business elites to create massive amounts of profit at the cost of American consumers through short-selling. He explained that when someone purchases a stock, there is a three-day stock settlement period during which a broker or a trader must provide a purchaser with that stock. However, through loopholes in the system, brokers and traders can legally not provide the consumer with that stock almost indefinitely, giving the purchaser an IOU instead. This enables brokers and traders to "flood" the market.
Through this "flooding," brokers can essentially issue the same stock to hundreds of people at no penalty. By increasing the supply of stocks, these dealers can dramatically drop the price according to the laws of supply and demand.
Byrne also demonstrated how the "cheating parties" make money off of the decline of a stock price through the process of "naked short selling". Naked short-selling occurs when certain hedge funds and broker-dealers flood the market for a particular firm's stock with IOU's for that stock, cracking the market in it. If they ever have to make good on their IOU's it is at fraction of the original price, and they get to pocket the difference. These methods are used to create huge profits, often killing the victimized corporation in the process, and leaving the purchaser high and dry. [Ed. Note: A Number of high profile firms, such as WaMu, AIG, and Wachovia, suddenly found themselves "high and dry" during this latest so-called "crisis".]
To counter this problem, in February 2007, Byrne filed a $3.5 billion lawsuit against Goldman Sachs, Morgan Stanley and nine other well-known brokers. Byrne said numerous publications, including the New York Post and Forbes magazine, have protested his "crusade," painting him as a crazed lunatic who is angry about Overstock.com's own stock price drop. Byrne said the Russian Mafia has become a silent player in the Wall Street game. And Byrne tells a story about a trip to the East Coast as an example of Russian Mafia involvement:
"About 15 months ago I was invited by a stranger into a greasy bar in Long Island," Byrne said. Claiming that he was Russian, the informant told him, "We have a message from Russia. We are about to kill you. We are about to kill if you if don't back down."
Additionally, Byrne remarked on how writer Mark Mitchell was threatened in New York and told to stay away from "the Irish guy," which Byrne believes was himself. "I've been looking at this for two years, and I'm pretty much convinced this is the single biggest scandal in the history of American journalism," said Mitchell, a former financial writer for Time magazine.
A number of mainstream references, to include Wikipedia, a July 2000 CBS News story, Jew Watch, the Jewish Tribal Review, and Erichufschmid.net present information about the Russian Mafia. In addition, Dr. David Duke, who's spent considerable time in Russia and has acquired a detailed knowledge of its culture and people, discusses the Russian Mafia at length in the following two YouTube videos:
Patrick Byrne also operates the DeepCapture website, where more of this type of information is posted. Ironically, Byrne supports the bailout, not for the sake of Wall Street, but for the sake of our financial system and the mobility of credit for small business. He favors attaching firm conditions to a bailout that would hold Wall Street stringently accountable.
All of this tells me that Utah Congressmen Jim Matheson and Rob Bishop voted the right way on the bailout by voting No, and Chris Cannon voted the wrong way by voting Yes. Matheson and Bishop need to hold out for at least the same conditions recommended by Patrick Byrne. A complete list of how House members voted is HERE.
Patrick Byrne has been previously featured on this blog. In November 2007, Salt Lake NAACP dominatrix Jeanetta Williams targeted him with a smear campaign because he said that if black kids didn't get a proper education, "you might as well burn them". Williams thought he was speaking literally. Byrne was also a promoter of Utah's failed 2008 school voucher initiative.