Article

2010-05-20 Europe

Markets crash as German short-selling ban bites

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Posted by lotp 2010-05-20 00:00|| || Front Page|| [3 views ] Top

#1 "Nobody has a clue what is going to happen next," said Anthony Peters, a strategist at Swissinvest.

Im no economic wheeler-dealer but introducing regulations that will assuredly add confusion and uncertainty at a time of unprecedented volatility smells of desperation. Apparently, that transparency thingy is only for the upper echelon of the Davos crowd.

Posted by DepotGuy 2010-05-20 09:35|| 2010-05-20 09:35|| Front Page Top

#2 Politicians have shown they have no understanding of markets.

Given the collapse of the markets in 2008, I believe we can make the same statement about the people running and feeding the markets as well. Since they precipitated the large sucking of national treasuries to save their holdings, rather than allow them to perish off the books, it naturally invited equally incompetent people/politicians to participate in the process.

Posted by Procopius2k 2010-05-20 09:59|| 2010-05-20 09:59|| Front Page Top

#3 What a mess...

Posted by Keeney 2010-05-20 15:34|| 2010-05-20 15:34|| Front Page Top

#4 It is a ban on naked short selling of banks and financial instruments (can you say credit default swaps?). Naked shorts should be outlawed and those who do should be sent to prison because it allows vultures to short sell an infinite number of shares, eventually driving the share price to zero and the company bankrupt when they can't borrow or meet debt covenants because their stock price is too low.

Posted by ed 2010-05-20 16:05|| 2010-05-20 16:05|| Front Page Top

#5 Speaking of messes....anyone having difficulty logging on to Yahoo besides me?

Posted by Besoeker 2010-05-20 16:09|| 2010-05-20 16:09|| Front Page Top

#6 Naked shorts sell something they do not own and do not have. If they were to do this in other areas of the economy, they would be jailed for thievery. If they did this as an investment, it would be treated as a Ponzi scheme.

Posted by No I am the other Beldar 2010-05-20 16:27|| 2010-05-20 16:27|| Front Page Top

#7 Naked short selling is almost always a good thing. In particular, it limits manipulation of prices where shares or debt are held by a few. Governments particularly hate short selling because it hampers their attempts to manipulate prices of their debt, which is the case in Europe at the moment.

BTW, people sell what they don't have all the time. Buy electronics online and chances are the seller doesn't actually have the item you buy. Anyone who does, then goes out and buys it in time to fulfill the contract, which is exactly what naked short sellers do.

Posted by phil_b 2010-05-20 23:10|| 2010-05-20 23:10|| Front Page Top

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