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  • IAMNATHAN IAMNATHAN Oct 23, 2009 7:42 PM Flag

    * Corporate Bonds Can Not Be Shorted *

    Is there a difference between Retail and Corporate Bonds, or are you disputing what Fidelity told me?

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    • I am not a Wall Street professional. So that testifies to my honesty.

      As far as I know most anything mortgaged with a bank can be resold. If you borrow money to buy stocks or bonds the bank lends them to short sellers who RESELL them. The stocks and bonds used as collateral for loans are resold many times.

      Even vacant land or real estate mortgages are loaned out to short sellers and resold many times. That is the banks' insurance in case the "homeowner" who borrowed money defaults. The short sellers borrow the deeds, repackage them into new securities and resell the property and keep the money in the bank. The banks and short seller resell the real estate mortgages as new securities to investors, real estate back securities. Of couse the short sellers want to buy those securities back for less too. That way the investors in real estate backed securities lose the money, in case of loan default, and NOT the banks and short sellers. I think Fannie Mae and Freddie Mac buy the shorted home mortgages.

      I suspect there may be a secret conspiracy in land ownership. I mean. What if England, and Spain, and the Churches never actually gave up or sold the land. Instead, they took out loans on the lands they owned in the new world and the world . The short sellers borrowed the land deeds and resold them, and more people took out loans on the land and the land was resold again.

      I would like to do a title search on property. Who really owns it? You can buy some land, but you may be buying it from someone who borrowed the land deed from the bank. Many people may have a claim to own the land. Eventually, the person who borrowed the land deed may have to return it to the bank and the original owner. And that could be the SECRET cause of wars. Reclaiming land.

      No likely. you say. But the public really doesn't know WHAT kind of political "deals" were made over the centuries. The historians surely don't know what's up.

      Maybe the US is not an aristocracy or monarchy, but most everthing is privately owned by a small group of people. This small world oligarchy survives by keeping its operations secret. A theory.

      Perhaps it is conspriracy paranoia. I don't know. I do know you can buy vacant land and then not be able to get a development permit. Why? You probably bought shorted land. the ownership claims are not settled, even if you have the deed to the land and pay property taxes.

      Wall Street is a trade secret. Trade secrets on Wall Street is inside trading. It is supposed to be illegal.

    • Nathan, retail bonds (actually "notes") trade like stock on an exchange. That is why they are sometimes confused with preferred stock. They can be shorted. These were sold as $25 par (that is why they are sometimes referred to as "Baby Bonds"). Institutional bonds were $1000 par and sold through fixed income brokers. I do not believe those could be shorted but I am 100% sure retail notes (which is most of bonds) were shorted.

      As an aside, reps at Fidelity, TDAmeritrade, etc do not always have correct info. You wouldn't believe how many had no clue as to what these securities are.