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Burn the Silver Share Shorts, Check Out CDE Fundamentals

Commodities / Gold & Silver 2009 Feb 18, 2009 - 06:46 AM GMT

By: James_Anderson

Commodities Best Financial Markets Analysis ArticleAnd an Open Letter to Nancy Pelosi – Speaker of the US House of Representatives - Silver Investors, especially those in Silver Equities have been put to a severe test over the past 8mths. It was bad enough that the Silver bullion price was cut over 50% from US$19 in July '08 to $9 in Nov. Silver shares started falling a lot earlier than physical  from March/April '08  & fell right out of bed losing up to 94% of their value.—and that's just the BIG already established Companies ! A lot of  smaller Co's  have been wiped out & will not recover.

There is no doubt in my mind that the above was no accident. It was in my opinion engineered by greedy, unscrupulous Wall St criminals who are allowed to do so by corrupt  & negligent  regulators. Those already interested & involved with owning Precious Metals are well aware of the ongoing & continuous manipulation & intervention by TPTB. It is a subject that has been well covered & we expect that the manipulators will be overwhelmed  at some time & hopefully sooner than later J

SHORT SELLING   (without the “Up-Tick” rule)  is the mechanism used  to rape & plunder

(Naked Short selling is another issue -well covered by Market Oracle & others . It is still an unresolved issue)

Many of us are victims of US short selling. Short sellers have targeted the Co I am invested in even though the Co has working assets (Mines) , appears to be well funded & has assets that have appreciated significantly since the melt down on World Share Markets in Oct 2008. This has caused me to doubt  there is anyone responsible in the US Govt for Financial Management . As an Australian citizen I find it incomprehensible that such lax financial oversight  could be allowed to happen in the so called World's most "advanced country" -and for so long!   Many thousands are in a similar position having lost on paper a huge part of their former Share investment for no good, explainable reason except that Greed & Corruption  runs rampant in the US Share Markets despite “supposed” increased scrutiny since the meltdown last year. It would appear to be a fact of life that the US Regulators are beholden to & in cahoots with the criminal side of Wall Street. Otherwise why have immediate changes not been made to the Short Selling Rules? 

Shorting  is done by Institutions & not always just by Hedge Funds. Shorting is always better if you hunt in packs. Collusion between shorting Fund Managers pays although no one will admit it & no one will be able to prove that it goes on! Targets for shorting are shares in which you can generate fear . When you factor in the huge whack that Silver received last year (US$19 down to $9) it would appear that was the first step –now followed up by unrelenting shorting. it's likely that the Criminals have been given the perfect victims –the large & liquid   Silver Co's who have exposure to debt because of funding for new mines etc. Analysts & Rating agencies jump on the “band wagon” to help their “mates”. It's a bad situation to be in for any Co –but the Shorts can be beaten.  The following is essential for a fair market.


In Australia & other "advanced" countries the "up-tick Rule" applies to all shorting -whether deemed to be a  "Financial Stock or not". The “up-tick rule” or “tick test” required short sellers to sell at a price above the last price paid for a stock, or at the price of the stock's last trade if it was higher than the previous price. The rule had been in effect since 1938, but the SEC removed the rule last year, on July 6, 2007, after saying it was “obsolete" thus giving short traders a free reign on shorting without any real mechanism to mitigate.

Nov 18th 2008  - -Wall St Journal -- "There's a Better Way to Prevent 'Bear Raids" -  The SEC should restore the up-tick rule   --


The SEC was warned by two commentators not to repeal the up-tick rule since it limited "bear raids" -- when short sellers drive down a stock's price in the hopes of scaring other investors into dumping the stock or triggering margin calls to force liquidations. In response, the agency approvingly summarized the views of three other commentators -- that bear raids "are highly unlikely to occur in today's markets, which are characterized by much smaller spreads, higher liquidity, and greater transparency than when the rule was adopted 70 years ago." This summary did not take into account another factor -- the advent of over $1 trillion managed by hedge funds with the ability to short stocks.

In fact, after the repeal of the up-tick rule, there was a marked increase in the number of NYSE-listed stocks with price drops of over 40% in a day -- a rough proxy for a bear raid. In the 12 months following Sept. 30, 2007, the number of such huge drops doubled as compared to a prior period with similar market declines and high volatility -- the 12 months following March 31, 2000.

The passage of the Economic Stabilization Act of 2008 has not stopped bear raids, so the SEC is reviewing its tool kit on short selling. Instead of another blunt tool like a temporary ban, the SEC should promptly bring back the up-tick rule

Nothing so far has happened -- allowing the criminal element to rape & pillage as usual.

Of the major Silver Co's  the 3 most  shorted are Silver Standard Resources Inc (SSRI) 7% of Shares, Hecla Mining Company (HL) 13.9% of Shares &  Coeur dAlene Mines Corp (CDE) a massive 14.85% or 76.4 million shares! It is mind boggling & patently reeks of collusion. All of these Companies are invested in an asset that has appreciated substantially over the past few months. Silver has risen  over 30% ( Oct 24th '08 to Feb 11th 09)

CDE  - - Worth looking at for the fundamentals if you believe in a higher Silver Price.

Despite being "well funded" CDE  was driven down to a low of .36cents on Nov 20th .The price then gradually recovered to .98cents on Jan 8th when physical Silver was at US$ 10.88 per oz.  Silver is now at US$13.40 on Feb 11th '09 and CDE has been driven down  again by Shorting to the unrealistic price of $.68cents !

*So the facts are that after  an increase of 18.81% in the price of Silver CDE drops over 30% in Value!

This is plainly ridiculous but small & even large investor are held captive by these criminals.,with NO HELP from the regulatory authorities.  Check out CDE "assets" for yourself.  Management may be lacking in entrepreneurial ideas BUT they still have a very impressive list of assets not at all factored in by most PM investors. Do your own due diligence & see what value lies here in a very manipulated share price.

(CDE)  . From their Website  is the following brief  facts:

Snip:   Couer d'Alene Mines Cororation is one of the World's leading Silver companies and also a significant gold producer. Coeur, which has no silver production hedged, expects to produce over 20 million ounces in 2009, a 66% increase over 2008 levels.  Last year, we began production at what is expected to be the world's largest pure silver mine - San Bartolomé in Bolivia – and we are also currently constructing another world-leading silver/gold mine – Palmarejo in Mexico, which is expected to begin production this March. Coeur also owns and operates underground mines in southern Chile and Argentina and one surface mine in Nevada ; and owns non-operating interests in two low-cost mines in Australia. We own a major gold project - Kensington in Alaska - and conduct exploration activities in Argentina , Chile and Mexico .

Coeur's cash costs have remained below $5 per ounce (adjusted for gold byproduct), as silver prices have fluctuated from $9 to $17 per ounce over the last 2 years. Its Palmarejo project has the potential to substantially reduce those cash costs. In late 2008, Coeur cut its corporate G&A costs by 40%.

Back to the Shorting of CDE by criminal elements of the USA Financial Mafia.

I have seen my  own "Investment" in this USA Co go from $US5.16 (March3rd 08) to $US$.36cents! on Nov 20th 2008. I have a very large holding & elected NOT to sell on the way down. In my wildest nightmare I could not have imagined  this Operating Co with 5 mines being manipulated to the depths it has been. I am still holding over half a million shares because I don't believe the current price is anything other than a false price. I urge you to put prejudice aside & look closely at CDE for the inherent value I believe is there.

If CDE does not appeal for what ever reason please buy one of the other major shorted Silver Stocks. We can win this with or without the regulators. Don't hold your breath waiting for “them” to fix things.

James Anderson


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Disclaimer  -- The author is a private investor with no formal qualifications. This article has been prepared from a wide variety of sources which the author to the best of his knowledge and belief considers accurate. The author does not warrant the accuracy of the information and forecasts contained in this publication. This information is provided for educational purposes and nothing written should be construed as a solicitation to buy and sell securities

An Open Letter to Nancy Pelosi-  The Speaker of the United States House of Representatives   

Dear Madam Speaker,

I'm a 64 yr old self funded, retired Australian with US Stock Investments and am writing to you in desperation because of the ongoing financial manipulation that is occurring unabated on US Sharemarkets. It is a disgrace that the most obvious & blatant  manipulation (Short Selling without restriction) by Giant Hedge Funds & Institutions often working in collusion   has not yet been addressed ! This is making  US markets a no-go area for ordinary investors -hardly a situation that will lead to economic recovery. It is disturbing & unjustified  that the SEC has not already taken steps to curtail the actions of these criminals. One only has to get on the Internet to find that this Criminal Shorting is occurring right across the USA stock market. Hardly a good advertisement for your Country.There are plenty of US citizens also up in arms but so far there has been no action. Anyone with sense would not invest in ANY USA based company under the present regulations & lack of accountability. 

The current situation it not fair and not good for America's reputation. It needs urgent fixing. I wish you well with that mission & hope you can turn things around.For a start the SEC should be forced to immediately & without further procrastination bring back the "Up-tick Rule" for shorting ANY Stock or Security. ( I have already sent a letter to Mary Schapiro the Chairman of the SEC. All I received back was an automated receipt)

In Australia & other "advanced" countries the "up-tick Rule" applies to all shorting -whether "Financial or Not"

 Bringing back the up-tick rule would at least  prevent basically sound institutions from falling victim to over aggressive bear raids -which is what is happening right now!  Among the many news reports on the subject is a theory that if the up-tick rule were put back into place then it would begin to level the playing field to at least some extent. Is it enough? Likely not, but it would at least give some measure of control into the markets.

The “up-tick rule” or “tick test” required short sellers to sell at a price above the last price paid for a stock, or at the price of the stock's last trade if it was higher than the previous price. The rule had been in effect since 1938, but the SEC removed the rule last year, on July 6, 2007, after saying it was “obsolete" thus giving short traders a free reign on shorting without any real mechanism to mitigate.

Nov 18th 2008  - -Wall St Journal -- "There's a Better Way to Prevent 'Bear Raids" - The SEC should restore the up-tick rule   -- The SEC should restore the uptick rule   Out with Cox, in with Uptick Rule  -- @11th Feb short position was 76.4m shares or 14.85% of issued Shares

Madam Speaker this is a scandal  of gigantic proportions & it is now in your court to fix it without delay. Every day that drags by with nothing done puts another nail in the US recovery. I urge you to bite the bullet & fix it now.

Thank you
James Anderson

*The above letter will also be sent by Reg Mail to The Speaker after Publication of this article

© 2009 Copyright James Anderson |- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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