Shorts, page-44

For people to systemically manipulate stocks requires such an extensive conspiracy, that it is fanciful to think it happens, especially for years on end without detection, which is what has on occasion been suggested is MSB's case.

You don't look, you don't find. ASIC is underfunded to a massive extent.

There is plenty that does on in the ASX which goes undetected. And this is simply bad governance and fleecing of punters. Plenty of companies in Australia are below the $ market cap beyond which ASIC will investigate.

It's absurd to assume it's all roses. Sorry, no. That's why various commentators in the AFR have talked darkly about West Perth explorers and made various warning statements. It's always the case that punters are shafted and only some of the goings on are properly investigated.

The inverse is also true. That highly respected companies are capable of acting in bad faith.

Case in point: financial advisers. Various advisers have been quietly given the pink slip from a variety of high profile and highly respected financial organisations in the wake of the financial advisers scandal and they're now free to practice their dark arts elsewhere. It is taking some persistent members of the Senate Inquiry to apply sustained pressure about this and other issues. In large part it is required because despite mea culpas by the banks, the punters aren't being compensated. That's just one example.

This can happen in the market more generally. You only need to read a bit widely and look at high profile examples such as Enron.

The principle is you have an underfunded regulator, and you have the means. It doesn't take a conspiracy, which is an overused term. It takes a confluence of interests.

Pretending that it's all roses is a phenomenon that I call blindness. You can't say with total certainty that manipulation isn't happening of the shareprice in relation to shorting, just as you can't say with total certainty that it is.

This is in the realm of speculation and it's an entirely fair thing to refer to manipulation as a real and not a necessarily remote or absurd possibility.