Page 3 June 7, 2024 The Sun Bay Paper Market Attack on Trump Media Cont. from pg. 2 Economic freedom is crucial for prosperity. It features well-defined and enforced property rights, the ability to trade property rights freely, and the ability to invest property profitably. Property rights are the bedrock of any free market economy. Without ownership rights, individuals cannot engage in market exchanges that move resources from less to more valued uses. Property rights and the legal systems that enforce them are complementary. Without both, property rights are either moot or trivial. Secure property rights incentivize using property in ways most valuable to society. If property rights are incomplete or insecure, the incentive to use them efficiently decreases. Owners will not invest in the long run when property rights are not secure, while secure property rights incentivize entrepreneurs to channel resources to their highest-valued uses. Market prices provide information about the relative scarcity of resources. When prices increase, it signals higher value elsewhere, prompting owners to sell. Friedrich Hayek noted: “The marvel is that…without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people…are made to use the material or its products more sparingly; i.e., they move in the right direction.” Market Manipulation and Naked Short Selling In ages past, naked short sellers were perp-walked. They are celebrated today—so long as they short the “right” companies. Naked short selling involves selling shares without borrowing or ensuring they exist. Coordinated naked short selling—like we have seen recently with TMTG— smacks of criminal activity. “In typical short selling, the borrowed shares are eventually returned to the lender. In naked short selling, no shares are actually borrowed or delivered, creating ‘phantom shares.’ This generates artificial sell pressure, with naked shorters profiting from the downtrend. It’s market manipulation 101,” said Wall Street insider John Tabacco. Naked short selling gained notoriety in the early 2000s. Regulators found it highly detrimental because it allowed traders to drive down prices artificially. The Dodd-Frank Act of 2010 aimed to prevent the practice with strict provisions. Despite this, the practice continues through loopholes. Traders use “zero-plus” agreements, “payment for order flow,” and multiple entities to circumvent regulations. The SEC’s Division of Enforcement has received many complaints about naked short selling. Investors and companies claim significant losses due to insufficient action against this practice. Calls for Regulatory Action Legal and Economic Warfare Against Trump Mirrors Nazi Tactics CAPTION: TMTG’s Nunes wrote to the State of Louisiana Office of Financial Institutions last week requesting investigations into DJT stock manipulation. In addition to letters to Nasdaq, TMTG’s Nunes wrote to the State of Louisiana Office of Financial Institutions requesting investigations into DJT stock manipulation. He highlighted persistent failures to deliver (FTDs) and potential unlawful collusion among market counterparties. Nunes emphasized the need for regulatory help to protect shareholders and ensure market fairness. The unprecedented naked short selling of DJT stock and the lack of regulatory action highlight broader economic freedom and property rights issues. Economic freedom diminishes without well-defined and enforced property rights, leading to inefficiencies and reduced prosperity. Secure and complete property rights and free trade are essential for a thriving economy. But in the TMTG case, the regulators aren’t even feigning action. The coordinated legal and economic assault on Trump is not just an attack on one man or one company. It represents a broader attack on America itself, mirroring the tactics used by authoritarian regimes. The use of regulatory and legal means to target political opponents signals a dangerous slide toward totalitarianism. The legal and economic warfare against Trump mirrors the worst of these tactics. The current American ruling elite are using their power to suppress dissent and consolidate control. This erosion of democratic norms and the rule of law threatens to plunge the nation into turmoil. The warning signs are clear: America is on the road to authoritarianism, and without immediate action, further decline and war are the inevitable historical results. The “Never Trumpers” making a deal with Democratic elites to destroy Trump should heed history’s lesson. In the early 1930s, German elites allied with a charismatic yet eccentric political party leader to forestall the communist advance on civil society. They thought they had made a good deal and could control a simple politician. The deal they made was with Adolf Hitler. The German elites ended up losing everything when the Nazis – after they had subdued the “Communist,” “Gypsy,” and “Jewish” threats, nationalized much of what they owned to feed the unchecked government apparatus. A similar fate awaits the “Never Trumpers.” Once the MAGA carcass is devoured, the Democrat beast will turn to find its next meal - them. The unrestrained appetites of a maddened State are insatiable. Once the American Republic is dead, no one is safe. Ronald Reagan spoke of an American “rendezvous with destiny.” Until recently, our American Republic was “the last best hope of man on earth.” Is that still true? Have we failed the “last great experiment for promoting human happiness” our ancestors gave us as our birthright? With the weaponization of justice, the erosion of secure property rights, and the politicization of market regulation, have we taken “the first step into a thousand years of darkness?” Given recent events, it is hard to reason otherwise. We hope and pray that we are wrong. We demand the restoration of the American Promise: Truth, Justice, the Rule of Law, and Free and Honest Markets. The first step is Donald J. Trump’s vindication and return to the Oval Office. Richard Luthmann A Broader Attack on American Democracy
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