In my humble opinion no other junior mining stock is a better example of the despair for this sector than ECU. I think the company has accomplished so many things during the last few years and yet the stock seems locked in a downtrend no matter what happens. All of this while the silver and gold spot markets power in an uptrend.

People who know me will also know that I am very convinced there is a great deal of sleazy dealings going behind the scenes. There are crooks running one scam after another that are having a direct impact on the trading of companies like ECU, and there are regulators empowered to put a stop to this behaviour who are not doing their jobs, and therefore in effect they are in league with the crooks. Since we cannot depend on an orderly and fair market, we must instead wait for the manipulation to collapse under its own weight, as did Enron, as did the Madoff ponzi scheme, and as has happened numerous other times.

When I talk of manipulation to the skeptics, I am always having to deal with the logical suggestion that sustained manipulation is impossible because other traders will sniff it out and take the other side of the trade. This is like saying that a broken bank machine which is spitting out money will be corrected because a good samaritan will run into the bank and report it. It sounds good, but it doesnt work it the real world. The scam to naked short stocks and flood the trading pits with paper gold and silver is paying off so well that no trader can stand in front of it. There are supposed to be a limited number of ECU shares for sale, but if there are parties that have chosen to just keep on selling and fail to deliver, then the selling presure will always overwhelm whatever buyers opt for the other side of the trade. Its that simple. Without a reliable and functioning regulatory body to enforce the rules, there is no reason this cannot carry on.

Too big to fail has many implications. If one or two banks have such a huge outstanding short position that they would be bankrupted if they had to cover in a squeeze, then I do not think the CFTC is going to do a damned thing about it, not after the FED has thrown hundreds of billions of dollars to keep the banks afloat. There are hundreds of billions of dollars of naked shorts that have been conveniently forgotten and swept under the carpet, rather than confront the criminals and let the firms that profit from the scam go bust. People can say whatever they wish, but if the regulators have allowed a few smaller companies to go bust but have chosen not to wade in and put a stop the the big firms that are responsible, then we have systemic corruption and there is no reason to assume that it will not go on indefinately.

So it should surprise no one that we have such bearish sentiment to deal with. Whenever ECU is on the verge of breaking out, there always seems to be millions more shares for sale to bash the stock back down on the first hint of weakness for the metals.

Now of course I do not have proof of my assumptions. The regulators are empowered to investigate trading irregularities and they are not disclosing their findings. Who went massively short LEH right before the firm was allowed to fold? We will never know because that obvious insider trading scam was not investigated or prosecuted. Who was behind the naked shorting that blew up Bear Stearns and made hundreds of millions for the perps? We will never know since the SEC will not investigate. Who profited from the HP/3Comm merger this week, when nearly a million dollars in call options were bought right before the announcement? We will never know. There are literally dozens of irregular trading scams every week that go unreported and do not attract attention from the regulatory agencies. Yet I am a nut if I dare to suggest that naked shorts are running over the junior minings stocks?

Despite the high profile scams that are not being investigated, we should all feel much safer that celebs like Martha Stewart get thrown in the can for minor infractions, and Mark Cuban is fined for insider trading that amounts to peanuts. When they finally do go after a big bank, they get let off with a small fine and no admission of guilt.

Should anyone wonder why the sentiment is crushed? The casino is rigged folks.

cheers!

mike