"If you increase you PB value, your draft position goes down in the contraction draft."

Yet another reason not to trade prior to it.

"If I follow your logic, why make trades before the FA draft, I could pick up players then."

No, why make trades before the Contraction draft, where you can pick up players. The contraction draft, even coming from 4 weak teams, looks to have a much better, deeper pool of talent than the FA draft.

Am I missing something here ? We're talking about three drafts , in order:
Contraction
Rookie
FA

Right ?

If you're looking for a 3B, for example, then you have an idea if the rookies look like there will be one there for you (Hinske?). If you get real lucky in the FA draft you could get Bellhorn, but it drops off after him and you certainly can't count on getting one of the top few picks. But in the contraction draft there could be 4 adequate to good 3B's, which when combined with other teams needs and the fact that there's only 20 teams picking means you will most likely get some help there. Why would you trade for a 3B now? When the contraction draft is done then you can look at your team and it's needs, the likelihood of getting help in those areas in the rookie and FA drafts and start trading. However, until the contraction draft is done I don't think teams will be trading much.