The Short Cut and How To Make Your Fortune in the Coming Financial Apocalypse

By Robert Farmilo 

THE TRUTH ABOUT MONEY

 

Picture of Robert Farmilo

 The Short Cut & 

How to Make Your Fortune 

in the Coming Financial Apocalypse

 GET CRAZY AND BUY THIS BOOK!
CLICK ON THIS LINK:
http://www.thegodconsciousnessproject.com

Some years ago I invented a game called 'The Stock Market.'  It was a board game.  It was great, too.  My little board game had many features of buying stocks and 'investing.'  There were dividends and other cool stuff.  Gee, gosh, golly, I was about eleven when I made up this game.

When I was twelve, I invented another game called 'The Property Game.'  This one was loosely based on a game that a much older friend of mine had invented.  This game originally just had companies that we bought and sold while going around a board.  The cool part of the game was my much older friend had devised a way to include percentages into the game.  We had to pay income tax, and property tax, and other neat stuff like that.  And it was all figured out by percentages.

This game was great for me to play, and I had a lot of fun, too.  It drove in deep a considerable aptitude for percentages, and really understanding how they worked, or rather, how to work them.  Also, as I went on and added new features to the game, it became increasingly popular among an ever growing circle of people who enjoyed playing the game.  As the game became more sophisticated, each game would last longer, and longer.  And nobody seemed to mind!

Somewhere along the line, I tried to figure out how to introduce shorting the market into the game.

And so I became very familiar with this ultra bizarre concept of how to make money, a lot of money, while the price of something is actually going down.

Here is a question for you, Dear Reader:

When did you get to know about what selling short meant?  And all the related bits and pieces?

I know that if you ask the average Canadian what selling short means, they will not be able to explain it to you.  Even if you ask for a basic explanation.  And many would be challenged if you explained the concept to them.  It is so counter-intuitive to how MOST people think money should, and is, made.

Give it a whirl and see what happens.  Go on and ask a few people, here and there, "Oh, buy-the-way, do you know what the term selling short means?"

OR:  "Can you please explain to me what 'short selling' means...how does it work, exactly?"

A lot is written about how the average person is programmed to be a financial idiot.  And that the powers-that-be like it to stay that way, too.  Let's face it, IF we are all taken behind the curtain of the altar, and brought in to meet the real Wizard of Oz, it is going to cramp the style of the elite few who have their hands on the levers of power.  And basically one equation that most of us understand is that money does equal power.

And power equals money.

Here is my basic explanation of what selling short is all about, and it's miracle power to make you a lot of money, IF you guess right, or are a complete scoundrel and make your guess come true by manipulating market forces.  More about that later.

MY SIMPLE EXPLANATION:

• So, you borrow a cup of  coffee grounds from Joe.

• You make a deal with Joe to bring him back the same quantity and quality of coffee grounds tomorrow by 10 A.M.

• Once you are out of Joe's office you immediately sell the cup of coffee grounds and pocket the cash.

• Then you wait until the price of the same quality coffee grinds drops below the amount of money you just made by selling the cup of coffee grinds you just borrowed from Joe.

• You wait until it is as low a price as it is going to be.

• Then you go and buy a cup of the same quality coffee grinds you got from Joe.

• And you go find Joe and return the cup of coffee grinds to Joe, plus maybe you give him a little bit more, as a sort of thank you.

• You keep the left over money.  Maybe you buy Joe a nice cup of fresh brewed coffee.

Here is a chart for you to ponder:

(Source, from Wikipedia)

Short sellers were blamed for the Wall Street Crash of 1929.^[7] Regulations governing short selling were implemented in the United States in 1929 and in 1940.^{[citation needed]} Political fallout from the 1929 crash led Congress to enact a law banning short sellers from selling shares during a downtick; this was known as the uptick rule, and this was in effect until July 3, 2007 when it was removed by the Securities and Exchange Commission (SEC Release No. 34-55970).^[8] President Herbert Hoover condemned short sellers and even J. Edgar Hoover said he would investigate short sellers for their role in prolonging the Depression.^{[citation needed]} A few years later, in 1949, Alfred Winslow Jones founded a fund (that was unregulated) that bought stocks while selling other stocks short, hence hedging some of the market risk, and the hedge fund was born.^[9]
Negative news, such as litigation against a company, may also entice professional traders to sell the stock short in hope of the stock price going down.
During the Dot-com bubble, shorting a start-up company could backfire since it could be taken over at a price higher than the price at which speculators shorted.^{[citation needed]} Short-sellers were forced to cover their positions at acquisition prices, while in many cases the firm often overpaid for the start-up.^{[citation needed]  Source:  Wikipedia}

OKAY, THIS IS ME, AGAIN:

Obviously the effect of the elite upon the great masses of the "great unwashed" have been tumultuous and devastating.
 The idea of shorting 'something' has been with us for a while, starting with the most infamous and stupid example, The Great Tulip Short of 1609.  This began in Holland, and just before the collapse of this...crazy, crazy cycle of greed and impossible-to-sustain bubble...a tulip bulb could buy a very nice house.

At the peak of tulip mania, in February 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble (or economic bubble),^[4] although some researchers have noted that the Kipper- und Wipperzeit episode in 1619–22, a Europe-wide chain of debasement of the metal content of coins to fund warfare, featured mania-like similarities to a bubble.^[5] The term "tulip mania" is now often used metaphorically to refer to any large economic bubble (when asset prices deviate from intrinsic values).^[6]
(Source:  Wikipedia)

^{And if you think this was insane, read this next part:}

The event was popularized in 1841 by the book Extraordinary Popular Delusions and the Madness of Crowds, written by British journalist Charles Mackay. According to Mackay, at one point 12 acres (5 ha) of land were offered for a Semper Augustus bulb.^[7] Mackay claims that many such investors were ruined by the fall in prices, and Dutch commerce suffered a severe shock. Although Mackay's book is a classic that is widely reprinted today, his account is sometimes contested. Some modern scholars feel that the mania was not quite as extraordinary as Mackay described. Some even argue that not enough price data remain, historically, to represent an all out tulip bulb bubble.^{[8][9]
(Source:  Wikipedia)} 

...so if you think that is crazy, and you have the time, read more about the whole short thing...on Wikipedia.  As you educate yourself, you will notice that the practice of selling short continued, and reached its ultimate silliness in the last roasting retch riot of late August, 2008.  Here are some more excerpts for you to digest:

 Naked short selling restrictions

During the 2008 financial crisis, critics argued that investors taking large short positions in struggling financial firms like Lehman Brothers, HBOS and Morgan Stanley created instability in the stock market and placed additional downward pressure on prices. In response, a number of countries introduced restrictive regulations on short-selling in 2008 and 2009.^[10][11] Investors argued that it was in the weakness of financial institutions, not short-selling, that drove stocks to fall.^[12] In September 2008, the Securities Exchange Commission in the United States abruptly banned short sales, primarily in financial stocks, to protect companies under siege in the stock market. That ban expired several weeks later as regulators determined the ban was not stabilizing the price of stocks.^[12][11]
Temporary short-selling bans were also introduced in the United Kingdom, Germany, France, Italy and other European countries in 2008 to minimal effect.^[13] Australia moved to ban naked short selling entirely in September 2008.^[10] Germany placed a temporary ban on naked short selling of certain euro zone securities in 2010.^[14] Spain and Italy introduced short selling bans in 2011 and again in 2012.^[15] Worldwide, economic regulators seem inclined to restrict short selling to decrease potential downward price cascades. Investors continue to argue this only contributes to market inefficiency

The Securities and Exchange Commission initiated a temporary ban on short selling on 799 financial stocks from 19 September 2008 until 2 October 2008. Greater penalties for naked shorting, by mandating delivery of stocks at clearing time, were also introduced. Some state governors have been urging state pension bodies to refrain from lending stock for shorting purposes.^[35] An assessment of the effect of the temporary ban on short-selling in the United States and other countries in the wake of the financial crisis showed that it had only "little impact" on the movements of stocks, with stock prices moving in the same way as they would have moved anyhow, but the ban reduced volume and liquidity.^[13]

Europe, Australia and China

In the UK, the Financial Services Authority had a moratorium on short selling 29 leading financial stocks, effective from 2300 GMT, 19 September 2008 until 16 January 2009.^[36] After the ban was lifted, John McFall, chairman of the Treasury Select Committee, House of Commons, made clear in public statements and a letter to the FSA that he believed it ought to be extended. Between 19 and 21 September 2008, Australia temporarily banned short selling,^[37] and later placed an indefinite ban on naked short selling.^[38] Australia's ban on short selling was further extended for another 28 days on 21 October 2008.^[39] Also during September 2008, Germany, Ireland, Switzerland and Canada banned short selling leading financial stocks,^[40] and France, the Netherlands and Belgium banned naked short selling leading financial stocks.^[41] By contrast with the approach taken by other countries, Chinese  regulators responded by allowing short selling, along with a package of other market reforms.^{[42]
(source:  wikipedia)} 

^{FIRST FEATURED YOUTUBE VIDEO}

Jim Chanos is a legendary short seller and Founder of Kynikos Associates, the hedge fund management company he started in 1985. Sitting down with Opalesque.TV, he talks about his background and first great short idea in Baldwin United, which led him to believe he could successfully start Kynikos utilizing a short selling mandate.

Chanos gives insights from his 27 years in the business into the asymmetries between the long and short side of investing and talks about the drastic difference in psychology between successful short sellers and long only investors. While the actual skill-set (to analyze companies etc.) is identical, good short sellers must be capable to withstand the "giant positive reinforcement machine" that Wall Street has become. This is something most investors cannot do and why most of them, even hedge fund managers, fail on the short side.

OKAY, IT'S ME AGAIN...and you are safe.

Here is the thing.  In early 2008, I knew that the party was going to be over, and sooner rather than later.

I had a little bit of money in the market, and so I got out of the market and put my small little bit of cash into some simple interest bearing stuff that wouldn't be touched by the coming storm.

Somehow, I just knew, somehow, that the big, fat, bloated stupid idiots were going to pull the temple down around their own stupid...stupidity.

I know that there were just a few of us who knew, really knew, that the party was definitely over.

I had to wait a few months for the first lurch, and it came, and then there was a nice market correction, hooray!, and I heard a lot of heavy breathing, some of it was relief...and then the summer came, and a few more voices started to whisper about the pin and the bubble and how these two forces were going to meet conclusively.

THE PIN AND THE BUBBLE MEET! 

I know that for many of us groovy people, the idea that there could be 'people' who would, on-purpose, create a systemic problem so that they and a few of their close associates could make a colossal amount of money, well, that is JUST a conspiracy thing, and, we all know that Santa Claus and the Easter Bunny NEVER conspire together, especially when the Tooth Fairy is involved in the whole Gay Pride thing.

(what?)

Well, what I am going to write down next makes as much sense as the last statement I just wrote.

The pin that burst the bubble was an on-purpose event created by a few people who would make ENORMOUS profits by selling short.

IF you know something is going to happen 'cuz YOU are going to make it happen, this gives you an edge.  In this case it gives you a pin.  And the pin that burst the bubble was made in secret, and carefully put into the bubble so that the bubble would burst, and in that sudden bursting, some of the elite of the elite made so much money that your head would explode if you knew how much money was transferred from the pockets of a very large group of people into the pockets of a very, very small, tiny, little group of people.

This is the dark-side of shorting the market.  It is usually a crime.  In one sense, it is a variant of  'insider trading.'

What you need is an edge, too. 

So, what happened is that a particular sort of 'financial instrument' was created.  It is called 'a derivative.'

Oh, I know, you know, Old Aunt Suzie knows, that derivatives have been around for a long time.  Depending on how you let the drunken barber shave your world, (your view of reality), it could be a financial instrument as old as money...maybe older.

Now, here's the thing, SLAVERY is a sort of financial instrument, too.  And most of us don't want to be sold into slavery, and go work on Poppa Joe's plantation, picking cotton in the hot, hot, Mississippi sun.

But I am WAY off topic.  And more about SLAVERY in blogs to come.  I know you are going to love my predictive painting of our brave new world to come...and it is coming soon!

 YOUR BASIC MODERN DERIVATIVE:

This is a device that allows you to hide all the crappy junk you want in a very complicated legal document.  And if you have enough pull and clout, you can get various bond rating agencies to give the crappy junk a nice seal of approval, get the coveted triple A rating.

Thing is, most people INSIDE the game didn't even know what was in just one derivative, let alone the millions of derivatives that were being sold.  IF you took the time to unpack just one single derivative, you would soon discover that a multitude of financial sins were buried inside the tight, small, black print.  The triple A rating was a nasty lie hiding a truth too unpleasant for most people INSIDE the game.  So you learn to not ask too many questions, and keep to the party line, and push junk.

Along the way, a new fun financial instrument was created to make things even more fun for the few.  It was a form of 'insurance' to make bets with.  I could buy a 'guarantee' that a derivative was going to be okay.  Santa Claus and the Easter Bunny and the Tooth Fairy made a deal.

I could even buy some 'insurance' on how a deal would go, even when I wasn't actually one of the people involved in the deal.  I could make a bet on how it would go.  Yes!

The Ultimate Bookie had come to Crazy Town, and set up shop, and was hustling this stuff...and it was ALL PERFECTLY LEGAL!

And it was...SOPHISTICATED...don't you know.

So all the hip cats had to pretend they knew what the bleep it all meant, and how it all worked, and that EVERYTHING WAS HUNKY DORRY!

In December 2007 the Bank for International Settlements reported ^[5] that "derivatives traded on exchanges surged 27% to a record $681 trillion in the third quarter" (Stever et al. BIS 2007–12 Page 20) ^[5] of 2007 as "investors bet on losses linked to record U.S. mortgage foreclosures" and Federal Reserve and the European Central Bank policy changes intended to offset the credit slump. ^[6]
Along with many other financial products and services, derivatives reform is an element of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010. The Act delegated many rule-making details of regulatory oversight to the Commodity Futures Trading Commission and those details are not finalized nor fully implemented as of late 2012.
(Source:  Wikipedia)

Yes, you read right:  $681 trillion...and that was in just one fiscal quarter of one year, the speed-up year BEFORE the year of the Pin and the Bubble.

What is so very odd about the number above is...that the world-wide total global economy is estimated to be:

$69.99 trillion (2011 estimate) 

or is it

$80.33 trillion (2011 estimate)? 

Anyway, whatever it is, (and what's $11 or so trillion dollars between friends?) when you compare the numbers...I mean JUST the volume of derivatives sold in one fiscal quarter of one year, say somewhere 'round $681 trillion, to maybe the top estimate of 2011, the ENTIRE world economy...all of it...at $80.33 trillion...hmmmm...do the math for me, will you CrimeStien?  What's that?  Comes out to...$600 trillion and some change (a mere $330 billion)...difference?  How can this be?  What-the-bleep is going on?  Where is all this money?

Second Video from You Tube:

Learn How To (what-the-bleep)

Short-Sell Penny Stocks

More about (what-the-bleep?) this very sophisticated financial term a little later.

 Here is another chart for you to look over:

Economy of the world During 2003 unless otherwise stated
Population	7 billion (2011)[1]
GDP	Nominal: US$69.99 trillion (2011 est.)[2] PPP: US$80.33 trillion (2011 est.)[2]
GDP growth	3.7% (2011)
GDP per capita	Nominal: US$7,178 PPP: US$12,000 (2011 est.)
Millionaires (US$)	~10 million i.e. ~0.15% (2009)
Unemployment	9.1% (2011 est.) note: 30% combined unemployment and underemployment in many non-industrialized countries; developed countries typically 4%-12% unemployment (2007 est.)
Billionaires (US$)	1,011 (2010)[3]
People paid below US$2 per day	~3.25 billion (~50%)
Trailing-ten-years. Most numbers are from the UNDP from 2002, some numbers exclude certain countries for lack of information. See also: Economy of the world – Economy of Africa – Economy of Asia – Economy of Europe – Economy of North America – Economy of Oceania – Economy of South America (Source:  Wikipedia)

For more about this whole CRAZY deal, check out this link, and then make sure you come back, okay?  Cuz, well, I'll miss you!

http://risklearn.com/a-history-of-derivatives-a-3000-year-history-part-2/

 THE HEDGE FUND LEARNS HOW TO SELL US ALL SHORT:

We have all heard of HEDGE FUNDS.  These are NOT about gardening, or the hedge in your back yard.  This is a way to off-set risk.  IF I am reliant on a particular commodity, and want to guard against a price rise or a drop in price, depending on my 'what-the-bleep' risky EXPOSURE looks like, I buy some guarantees, I buy some of whatever it is at a guaranteed price.  I can even do this as an option.  I can buy the promise of a fixed price, and not have to take delivery of whatever it is that I have sort-of bought.

Now the term 'what-the-bleep' is a very technical term that is used in elite financial circles.

It is particularly in use among those who buy and sell hedges on bets.  So, let's say this was about a horse race, and I had a horse running in the third at Darlington Downs...and there was a lot of heavy action on the horse, and I wanted to lay-off some of the action, so I would maybe make some bets on some of the other front-runners, and spread my risk.

So what does a hedge fund have to do with making money on something that is going down in value?

Well, a lot, really.  Remember, a very few made a lot of money in the last Pin meets the Bubble.  And we are seeing how the bubble was somewhat patched up so that it could be reinflated.  And now the Bubble is being pumped up, again.  And the PIN is being carefully sharpened for the biggest and best 'pop' EVER!

And that is coming very soon.  Best guess is somewhere around 2015, maybe 2016.  So, to be specific, the financial thing is going to go into a very serious collision with reality.  There will be what is laughingly called 'a correction.'   This is when the very technical term 'what-the-bleep' is going to be on the lips of the many, and the few, too.  Except for the VERY few, and they will have another very technical term on their lips.  A silent, unspoken term.  A very smuggy kind of silence wrapped 'round their very technical term.

Here is another link for you to explore:

http://husky1.stmarys.ca/~gye/derivativeshistory.pdf

Just make sure you come back here after you finish exploring...

...otherwise I'll start missing you!

  CLICK HERE>>>WEALTH DISTRIBUTION IN AMERICA

  AND NOW A MESSAGE FROM OUR SPONSOR!

Hey there, are you wanting to know what God thinks and feels?

Would you like to have private and personal consultation with God?

How about clear, precise, two-way, telepathic communication with God.

I know you think I am putting you on...

...well, I am actually serious.

In the book GOD CONSCIOUSNESS, there is a specific chapter about MONEY.

IF you are interested in what God  has to say about this subject: 

>>>CLICK ON THIS LINK AND GET THIS BOOK, FREE, NOW!<<<

>>>http://www.thegodconsciousnessproject.com<<<

Fourth Video from You Tube:
How to Find Best Stocks 

For Short Selling Video

The book is controversial, for sure, and it is supposedly written directly by God.

The premise is that you DO NOT have to believe or have faith.

Here's the thing...read the book, 

and try the stuff in the book, 

and I know you'll get the result.

It actually works!

CRAZY!

Next video from You Tube:

Abhishek Sachdev, Managing Director of Vedanta Hedges, speaks exclusively to IB Times' senior business journalist, Lianna Brinded, on mis-selling derivatives.

 Wait!  There is More!

 SHORT THE BRITISH POUND,

MR. GEORGE SOROS!

This guy had the guts and the glory.

More about him and the amazing deal he pulled off.

And what you can learn from his AMAZING story.

ALL THIS AND MORE IN 

PART TWO  

OF:

"THE SHORT CUT & HOW TO MAKE YOUR

 FORTUNE IN THE COMING FINANCIAL APOCALYPSE" 

  Also check out these two blogs:

click here>>>How to Make Money Online: SCAMS!

 click here>>>HOW TO MAKE MONEY ONLINE: PROMOTION

===============================

===============================

===============================