U.S. government law enforcement agencies including the SEC, FBI and DOJ are on alert and are believed investigating terror and other related short selling illegal manipulation of the market place.

It was reported that between August 26 and September 11, 2001, groups of speculators, including Middle Eastern country investors, some reported connected to terrorist such as Al Qaeda and the Ben Laden family, these groups were believed connected to predicting the demise of certain airline and buildings including the New York Trade Center. Still others were identified by the American Securities and Exchange Commission as Israeli citizens, who sold "short" a list of 38 stocks that could reasonably be expected to fall in value as a result of the pending 911 attacks. According to the reports these speculators operated out of the Toronto, Canada and Frankfurt, Germany, stock exchanges and their profits were specifically stated to be huge.

Apparently none of the suspicious transactions could be traced to Bin Laden because this news item quietly dropped from sight, leaving many people wondering if it tracked back to American firms or intelligence agencies

The feds have seen a possible similar trend operating on Wall Street recently and no end to the panic selling on Wall Street without government intervention. U.S. corporate regulator, the SEC, is seeking to ease the terror by implementing emergency rules relating to short selling.

This possible action will be stronger than the recent use of the emergency powers that the SEC invoked in July to slap a temporary ban on "naked" shorting of 19 companies, including the mortgage insurers Fannie Mae and Freddie Mac, and a number of major investment banks and commercial banks. The new aim will be to stop "unlawful manipulation" of American companies and their stock and to hopefully help to maintain orderly markets. Just how much damage has been done is not known but is believe catastrophic.

Short selling of stocks involves the opportunity to gain large profits by passing shares to a friendly third party, then buying them back when the price falls. Historically, if this precedes a traumatic event, it is an indication of foreknowledge. It is widely known that the CIA uses the Promis and other cutting edge software to routinely monitor stock trades as a possible warning sign of a terrorist attack or suspicious economic behavior. A week after the September 11, 2001 attacks, the London Times reported that the CIA had asked regulators for the Financial Services Authority in London to investigate the suspicious sales of millions of shares of stock just prior to the terrorist acts. It was hoped the business paper trail might lead to the terrorists.

The US Government as a result of the recent falling market has now nationalized Fannie Mae and Freddie Mac, by investing American tax payer’s money to hopefully bail them out. US Government has also nationalized the world's largest insurer, American International Group, (AIG) which was not on the SEC's list. That so far has cost the American tax payer an additional 80 million for an 80% ownership of the shares. This nationalization of Massive American institutions is a socialization of America. The government is expected to form an entity not unlike the one they put together during the S&L crisis. That was where the government formed a vehicle that bought most of all the bad paper using tax money and later sold it back into the market place.

That is what the powers to be plan as a way to handle this market problem. The estimated cost will be in the trillions according to sources close to the on going high level meetings of government, Congress, SEC and the Federal Reserve (a private corporation).

The government claims by placing them in what it dubs as "conservatorship" or this so called new entity will give the American people the opportunity to make money should the government be able to turn it around. However even should they make money on the deal it is hard to see how the American people could benefit from it, according to Wall Street insiders? All this while two of the major investment banks on the SEC list have now disappeared -- Lehman Bros and Merrill Lynch.

Naked" short selling practice is technically not illegal, but dealer-brokers are required to have "reasonable grounds" to believe the securities can be borrowed to enable settlement. The English has recently abolished the practice and the U.S. is expected to follow suit.

The SEC has long held the power to make emergency orders, but it is only now that they are invoking orders that will be unprecedented. Such orders may become permanent.

The SEC has also adopted a rule that makes it fraudulent, and a violation of the law, if short sellers deceive broker-dealers or any other participants as to their ability to deliver securities within time for settlement.

Those new rules apply until October 1 unless further extended. Their introduction follows strong lobbying by the American Bankers Association to clamp down on short selling amid concerns that the price of their stock was being manipulated.

"We are concerned about the possible unnecessary or artificial price movements based on unfounded rumors regarding the stability of financial institutions and other issuers, exacerbated by naked short selling. Our concerns, however, are no longer limited to just financial institutions," the SEC said.

"In addition, we have become concerned that some persons may take advantage of issuers that have become temporarily weakened by current market conditions to engage in inappropriate short selling in the securities of such issues," it added.

In regard to the few remaining Wall Street financial institutions lift, like Mogen Stanley, Goldman Sacks may have fallen victim to such practices. The feds are worried and have become concerned about "sudden and unexplained" declines in the prices of securities, which could create questions about the underlying financial condition of an issuer, which in turn could create a crisis of confidence without a fundamental underlying basis. This crisis of confidence could impair the liquidity and viability of an issuer "with potentially broad market consequences".

Washington Mutual and other deposit banks are in jeopardy. WaMu's $310 billion in assets, its diverse loan portfolio, its large base of depositors and conservative risk management were supposed to protect the thrift from collapse. Now it appears to be the next domino in the row.Other sectors still American car makers and other and related industries are all venerable to short selling techniques and the SEC is committed to stop this dangerous type of maneuvering.

The real controversy over naked short selling, however, concerns price manipulation. Here the fear is that a maverick trader could spread false rumors about a company while massively shorting its stock. Such aggressive actions would allegedly push the price down, allowing the trader to reap a guaranteed profit from his self-fulfilling prophecy.

The matter of 911 is still under investigation and none of the government investigating bodies -including the FBI, the Securities and Exchange Commission (SEC) and DOJ -are speaking to reporters about insider trading. Even so, suspicion of insider trading to profit from the September 11 attacks is not limited to U.S. regulators. Investigations were initiated in a number of places including Japan, Germany, the United Kingdom, France, Luxembourg, Hong Kong, Switzerland and Spain. As in the United States, all are treating these inquiries as if they were state secrets.

Given all of this, at a minimum the government regulators who are conducting the secret investigations have known for some time who made the options puts on a total of 38 stocks that might reasonably be anticipated to have a sharp drop in value because of an attack similar to the 9/11 episode.

The silence from the investigating camps could mean several things: Either terrorists are responsible for the puts on the listed stocks or others besides terrorists had foreknowledge of the trouble that was about to strike Wall Street or may have even contributed and used that knowledge to reap a nice financial harvest from the instability of the market place.

Federal investigators are continuing to be so closed-mouthed about these stock trades, and it is clear that a much wider net has been cast, apparently looking for bigger international fish involved in dubious financial activity relating to the world stock markets. Top market observers indicate that the bear raids on the banks and brokers were NOT a case of piling on by US based hedge funds. And from what they are seeing and hearing about in terms of order flow, the vast majority of the financial short selling the past week or so were being done overseas. It appears that the lion's share of shorting was coming out of overseas houses such as London and Middle Eastern Countries such as huge oil money centers like Dubai and others. It may not be a coincidence that the financial short selling ban is now both here and in London.

Then there is another coincidence: The huge increase in shorting of the financials occurred on the anniversary of 9/11. And on top of that, the same institutions attacked on 9/11/01 were many of the ones suffering in recent days.

There was unusually heavy trading in airline and insurance stocks several days before September 11, 2001, which essentially bet on a drop in the worth of the stocks. The same is suspected being done on some recent failures and weakness like Lehman Brothers Holdings, Inc., Bear Stearns and others.

In reference to 911 just a month after the attacks the SEC sent out a list of stocks to various securities firms around the world looking for information. Many of the same firms who failed this go round were also on that list. At that time the list included stocks of American, United, Continental, Northwest, Southwest and U.S. Airways airlines, as well as Martin, Boeing, Lockheed Martin Corp., AIG, American Express Corp, American International Group, AMR Corporation, Axe SA, Bank of America Corp, Bank of New York Corp, Bank One Corp, Cigna Group, CNA Financial, Carnival Corp, Chubb Group, John Han*** Financial Services, Hercules Inc, L-3 Communications Holdings, Inc., LTV Corporation, Marsh & McLennan Cos. Inc., MetLife, Progressive Corp., General Motors, Raytheon, W.R. Grace, Royal Caribbean Cruises, Ltd., Lone Star Technologies, American Express, the Citigroup Inc. ,Royal & Sun Alliance, Lehman Brothers Holdings, Inc., Tornado Reality Trust, Morgan Stanley, Dean Witter & Co., XL Capital Ltd., and Bear Stearns.

Highly placed Wall Street observers say now without governments intervening the terrorist my have been able to have brought the U.S. and other westerners to their Financial knees. This may have been a serious terrorist attack with most Americans not knowing anything about it, and we may never know the truth.

Terrorist Attacks

(within the United States or against Americans abroad)

1920

1975: Jan. 24, New York City: bomb set off in historic Fraunces Tavern killed 4 and injured more than 50 people. Puerto Rican nationalist group (FALN) claimed responsibility, and police tied 13 other bombings to the group.

1979: Nov. 4, Tehran, Iran: Iranian radical students seized the U.S. embassy, taking 66 hostages. 14 were later released. The remaining 52 were freed after 444 days on the day of President Reagan's inauguration.

1982–1991: Lebanon: Thirty US and other Western hostages kidnapped in Lebanon by Hezbollah. Some were killed, some died in captivity, and some were eventually released. Terry Anderson was held for 2,454 days.

1983: April 18, Beirut, Lebanon: U.S. embassy destroyed in suicide car-bomb attack; 63 dead, including 17 Americans. The Islamic Jihad claimed responsibility.; Oct. 23, Beirut, Lebanon: Shiite suicide bombers exploded truck near U.S. military barracks at Beirut airport, killing 241 marines. Minutes later a second bomb killed 58 French paratroopers in their barracks in West Beirut.; Dec. 12, Kuwait City, Kuwait: Shiite truck bombers attacked the U.S. embassy and other targets, killing 5 and injuring 80.

1984: Sept. 20, east Beirut, Lebanon: truck bomb exploded outside the U.S. embassy annex, killing 24, including 2 U.S. military.; Dec. 3, Beirut, Lebanon: Kuwait Airways Flight 221, from Kuwait to Pakistan, hijacked and diverted to Tehran. 2 Americans killed.

1985: April 12, Madrid, Spain: Bombing at restaurant frequented by U.S. soldiers, killed 18 Spaniards and injured 82.; June 14, Beirut, Lebanon: TWA Flight 847 en route from Athens to Rome hijacked to Beirut by Hezbollah terrorists and held for 17 days. A U.S. Navy diver executed.; Oct. 7, Mediterranean Sea: gunmen attack Italian cruise ship, Achille Lauro. One U.S. tourist killed. Hijacking linked to Libya.; Dec. 18, Rome, Italy, and Vienna, Austria: airports in Rome and Vienna were bombed, killing 20 people, 5 of whom were Americans. Bombing linked to Libya.

1986: April 2, Athens, Greece:A bomb exploded aboard TWA flight 840 en route from Rome to Athens, killing 4 Americans and injuring 9.; April 5, West Berlin, Germany: Libyans bombed a disco frequented by U.S. servicemen, killing 2 and injuring hundreds.

1988: Dec. 21, Lockerbie, Scotland: N.Y.-bound Pan-Am Boeing 747 exploded in flight from a terrorist bomb and crashed into Scottish village, killing all 259 aboard and 11 on the ground. Passengers included 35 Syracuse University students and many U.S. military personnel. Libya formally admitted responsibility 15 years later (Aug. 2003) and offered $2.7 billion compensation to victims' families.

1993: Feb. 26, New York City: bomb exploded in basement garage of World Trade Center, killing 6 and injuring at least 1,040 others. In 1995, militant Islamist Sheik Omar Abdel Rahman and 9 others were convicted of conspiracy charges, and in 1998, Ramzi Yousef, believed to have been the mastermind, was convicted of the bombing. Al-Qaeda involvement is suspected.

1995: April 19, Oklahoma City: car bomb exploded outside federal office building, collapsing wall and floors. 168 people were killed, including 19 children and 1 person who died in rescue effort. Over 220 buildings sustained damage. Timothy McVeigh and Terry Nichols later convicted in the antigovernment plot to avenge the Branch Davidian standoff in Waco, Tex., exactly 2 years earlier. (See Miscellaneous Disasters.); Nov. 13, Riyadh, Saudi Arabia: car bomb exploded at U.S. military headquarters, killing 5 U.S. military servicemen.

1996: June 25, Dhahran, Saudi Arabia: truck bomb exploded outside Khobar Towers military complex, killing 19 American servicemen and injuring hundreds of others. 13 Saudis and a Lebanese, all alleged members of Islamic militant group Hezbollah, were indicted on charges relating to the attack in June 2001.

1998: Aug. 7, Nairobi, Kenya, and Dar es Salaam, Tanzania: truck bombs exploded almost simultaneously near 2 U.S. embassies, killing 224 (213 in Kenya and 11 in Tanzania) and injuring about 4,500. 4 men connected with al-Qaeda 2 of whom had received training at al-Qaeda camps inside Afghanistan, were convicted of the killings in May 2001 and later sentenced to life in prison. A federal grand jury had indicted 22 men in connection with the attacks, including Saudi dissident Osama bin Laden, who remained at large.

2000: Oct. 12, Aden, Yemen: U.S. Navy destroyer USS Cole heavily damaged when a small boat loaded with explosives blew up alongside it. 17 sailors killed. Linked to Osama bin Laden, or members of al-Qaeda terrorist network.

2001: Sept. 11, New York City, Arlington, Va., and Shanksville, Pa.: hijackers crashed 2 commercial jets into twin towers of World Trade Center; 2 more hijacked jets were crashed into the Pentagon and a field in rural Pa. Total dead and missing numbered 2,992¹: 2,749 in New York City, 184 at the Pentagon, 40 in Pa., and 19 hijackers. Islamic al-Qaeda terrorist group blamed. (See September 11, 2001: Timeline of Terrorism.)

2002: June 14, Karachi, Pakistan: bomb explodes outside American consulate in Karachi, Pakistan, killing 12. Linked to al-Qaeda.

2003: May 12, Riyadh, Saudi Arabia: suicide bombers kill 34, including 8 Americans, at housing compounds for Westerners. Al-Qaeda suspected.

2004: May 29–31, Riyadh, Saudi Arabia: terrorists attack the offices of a Saudi oil company in Khobar, Saudi Arabia, take foreign oil workers hostage in a nearby residential compound, leaving 22 people dead including one American.; June 11–19, Riyadh, Saudi Arabia: terrorists kidnap and execute Paul Johnson Jr., an American, in Riyadh, Saudi Arabia. 2 other Americans and BBC cameraman killed by gun attacks.; Dec. 6, Jeddah, Saudi Arabia: terrorists storm the U.S. consulate, killing 5 consulate employees. 4 terrorists were killed by Saudi security.

2005: Nov. 9, Amman, Jordan: suicide bombers hit 3 American hotels, Radisson, Grand Hyatt, and Days Inn, in Amman, Jordan, killing 57. Al-Qaeda claimed responsibility.

2006: Sept. 13, Damascus, Syria: an attack by four gunman on the American embassy is foiled.

2007: Jan. 12, Athens, Greece: the U.S. embassy is fired on by an anti-tank missile causing damage but no injuries.; Dec. 11, Algeria: more than 60 people are killed, including 11 United Nations staff members, when Al Qaeda terrorists detonate two car bombs near Algeria's Constitutional Council and the United Nations offices.
2008: May 26, Iraq: a suicide bomber on a motorcycle kills six U.S. soldiers and wounds 18 others in Tarmiya.; June 24, Iraq: a suicide bomber kills at least 20 people, including three U.S. Marines, at a meeting between sheiks and Americans in Karmah, a town west of Baghdad.; June 12, Afghanistan: four American servicemen are killed when a roadside bomb explodes near a U.S. military vehicle in Farah Province.; July 13, Afghanistan: nine U.S.soldiers and at least 15 NATO troops die when Taliban militants boldly attack an American base in Kunar Province, which borders Pakistan. It's the most deadly against U.S. troops in three years.; Aug. 18 and 19, Afghanistan: as many as 15 suicide bombers backed by about 30 militants attack a U.S. military base, Camp Salerno, in Bamiyan. Fighting between U.S. troops and members of the Taliban rages overnight. No U.S. troops are killed.; Sept. 16, Yemen: a car bomb and a rocket strike the U.S. embassy in Yemen as staff arrived to work, killing 16 people, including 4 civilians. At least 25 suspected al-Qaeda militants are arrested for the attack.