Resource Stock Update - V14 #8.13 - Markets, Naked Shorting Uncovered - Sept., 9, 2008

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                                                     Markets

All I can say is - I have never seen anything like this, many resource stocks have given back all
the gains of the last 3 years. In many cases 80% of the gains and more of this entire bull market
since 2003 have been wiped out. It makes no sense!

Likely, a number of hedge funds have been wiped out and have been liquidating. Naked shorting is
rampant and sickening!!

I have looked at numerous long term charts and we are at or around strong long term support areas.
Areas on the charts only seen on brief spikes down and levels of 3 or 4 years ago. I am talking the
XAU and HUI and other stock indexes.

I will have a complete update with charts to sort through this mess, but for now I want to  present
you with all the evidence and where to find it - that uncovers the naked shorting abuse in gold
stocks. It pales the so called naked shorting in the financials. This is nothing other than
corruption and manipulation!

I would suggest you check naked shorts in other U.S. precious metal stocks you know of that I do not
show below and would appreciate that you pass the stock symbol on to me

                  Naked Shorting - Uncovered

Shock and Awe!!!

I found a web site that reports naked short sales with data supplied by the SEC.
http://www.failstodeliver.com/

First the Awe!

So I checked all the stocks on our list that trade in the U.S. and the manipulation to bash gold
stocks is easily evident. The data only has prices since early 2007, so it is easy to compare the
stock price to increases and decrease in naked shorting. The SEC releases the data quarterly, so we
just have data to the end of June 2008.

It measures 'fails to deliver' which is stocks sold short with no borrowed stock to cover or
delivered after the 3 day settlement period for a trade. Fails to deliver on a given day are a
cumulative number of all fails outstanding until that day, plus new fails that occur that day, less
fails that settle that day. 10,000 fails or more are required to register and be reported.

Stock-Symbol   Reported short                   Comments
                            interest

Kinross, KGC - 6.5M - heavy naked short selling on Price rise early in 2008
Goldcorp, GG - 9M - many times naked short interest spiked to 1 - 1.5 million
Goldfields GFI  7M - many spikes to 1 to 2 million on price rises
Barrick ABX 8.5M - increase to 1.3 million on price drop in April 2008
Newmont NEM 15 M - increase to 500,000 on price increases in 2008
Cameco CCJ 8M - spike to 1.5 million on price drop in Aug. 2007
Agnico Eagle AEM - 3M - lots of naked shorting from mid 2007 to early 2008
on a steady price rise, numbers gyrated between 300,000 to 600,000

Yamana AUY 12M - spikes to 1 to 2 million on price increases
IMG Gold  IAG 2.7M  - very little activity
Cour D'Alene CDE 73M - big increase in late 2007 on price rise, 1 million to
6 million also spikes to 4 million this summer
Stillwater SWC 9M - increase activity in 2008 on price rise and price fall,
200,000 to 500,000
North American Palladium, PAL  4M - big increase to 3 million when stock went
down in late 2007

Junior Golds - Exploration - I added in MVG,KBX,SDRG and TRE for more comparisons

Claude Resources CGR - 13,000 - spikes to 500,000 to 800,000 on price increase
Exeter XRA 11,000 - increase to 200,000 in mid July on Price rise
Great Basin GBN - 1.5M - big increase to 2.5 million in late 2007 on price drop
and 1st qrt 2008 on price rise
Paramount PZG 18,000 - mostly between 25,000 to 60,000 with spikes to around
100,000 on price drops
Tanzanian Royalty TRE - 2M - lots of naked shorting in summer of 2008 with spikes
to over 600,000
Platinum Group PLG - 288,000 - fluctuates from 10,000 to 50,000 two increases push
stock down
Mag Silver MVG -575,000 - activity picked up in 2008 with price decline, numbers
only reported to 30,000 though
Kimber KBX - 12,000 - activity picked up in late 2007 with large spike to 600,000
on price decline.
Silver Dragon SDRG - 31,000 - lots of naked shorting in early 2008 up to 600,000
with price decline
Amex Gold AMXG - 14,100 - 2 large increase in naked shorting in mid 2007 and
March 2008 on price declines, up to 120,000 to 190,000 reported

On the junior stocks like, XRA, PZG, CRG, KBX, AMXG, SDRG. What concerns me is the SEC data is
showing a fair number of naked shorts that far exceeds the reported short interest. So it appears
naked shorting is more prominent then reported shorting on some juniors while others like GBN with
1.5 million reported short, Platinum Group with 288,000 reported Mag Silver 575,000 and TRE with 2
million reported also carry a reported short position plus naked shorting.

Now the shock!

So I thought I would check the 19 stocks the SEC had to protect and was shocked to find there was
very little naked shorting going on - using the SECs own data. There was some short term spikes of a
few million shares here and there and much less, but these are stocks with 1 to 4 billion shares
out, so these naked short interests are very insignificant - maybe half an hour of trading volume.
The only significant naked short activity I seen was 14 million shares with Royal Bank of Scotland
but they have almost 10 billion shares outstanding.

To be fair, the data reported is to end of June only, so perhaps the naked shorting seen big
increases in July - before the 15th, but we will probably have to wait 6 or 7 weeks for the next qtr. data
to verify

Junior gold stocks with just 50 to 100 million shares outstanding are seeing as much naked shorting as many of these financials that have 1,000 to 5,000 times as many shares outstanding. For example, many days Paramont is only seeing 10,000 to 20,000 shares traded so naked short sales of just 5,000 (would not be reported) or 10,000 can dramatically effect the price where 1 million shares of naked
short sales on one of these banks can be less than half an hour of trading in a given day.

You can go to http://shortsqueeze.com/ and get short quotes, it shows the reported short position
(not any of the naked shorts), shares outstanding and average daily trading volume.

The 19 protected Financials

Stock  Symbol,  shares out -        comments

Fannie Mae - FNM 1,076M - little naked shorting in 2008, some spikes in 2007
Freddie MAE - FRE 647M - seen short term spikes, up to 13 million naked shorts
in early 2008, but very little naked shorts since April
Lehman Brothers - LEH 694M - 1 spike to almost 2 million naked shorts in March,
other than that mostly small amounts around 400,000
Merrill Lynch - MER 1,500M - short term spikes up to about 500,000 shares
Morgan Stanley - MS 1,100M -one short term spike to 1.6m in Jan 2008, none since
Goldman Sachs - GS 400M - two spikes to about 600,000 in 2007 and 2008 but nothing
much else
Allianz Aktiengesellschaft (AZ), 4,520M - one short term spike to 2.5 million in
early 2008, other than that nothing else
Bank Of America Corp (BAC), 4,560M -  some spikes to 2.5 million
Barclays PLC (BCS),1,633M - most naked shorts was around 500,00
BNP Paribas (BNPQY.PK), - most was around 400,000
Citigroup Inc (C), 5,160M - one short term spike to 8 million, nothing much else
Credit Suisse Group (CS),1,010M - some spikes to 500,00 or 600,000
Daiwa Securities Group Inc (DSECY), - only 200,000 share or so
Deutsche Bank Group AG (DB), 500M - some spikes to 350,000
HSBC Holdings plc (HBC), 2,360M  - up to around 700,000
JPMorgan Chase & Co. (JPM), 3,500M - couple short term spikes to 1.5 million
Mizuho Financial Gp Adr (MFG), 5,700M  - pretty much nothing
Royal Bank of Scotland (RBS), 9.500M - one broader spike to 14.7 million in June2008
UBS AG (UBS). 2,012M - couple short term spikes to 2.5 million

(c) Copyright 2008, Struther's Resource Stock Report

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