Short sales are prohibited. JPM issues $10b in stock during that blackout. The stock price did not become diluted but on Friday rose 11% even with a threat of Q3 loss. Those who may want to short, can’t. They pick up WaMu assets dirt cheap due to the fed seizing things and claiming them effectively worthless and not allowing the market deal with their bankruptcy. Obviously that’s after the fact they’ve done this with other failed companies. Given that JPM is a partial owner of the Federal Reserve, their size, connections, and history of the Federal it’s unsurprising that Bernanke, Paulson and friends show favoritism toward them.

While I disagree with some of what he proposes I think generally he’s pointing out important aspects which need to be looked at in the least.

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