Comments on: LInks 5/22/08 http://www.nakedcapitalism.com/2008/05/links-52208.html Sun, 22 Nov 2009 22:11:10 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Yves Smith http://www.nakedcapitalism.com/2008/05/links-52208.html#comment-8418 Yves Smith Fri, 23 May 2008 00:23:00 +0000 http://www.nakedcapitalism.com/2008/05/links-52208/#comment-8418 Moe,<br/><br/>Mike Masters in Senate testimony provided ch<a HREF="http://hsgac.senate.gov/public/_files/052008Masters.pdf" REL="nofollow">arts and related commentary</a> about how index speculators (as opposed to traditional speculators) consume, not provide, liquidity. The point of an increase in margin requirements is to discourage such players from participating on a leveraged basis. Moe,

Mike Masters in Senate testimony provided charts and related commentary about how index speculators (as opposed to traditional speculators) consume, not provide, liquidity. The point of an increase in margin requirements is to discourage such players from participating on a leveraged basis.

]]> By: bobo7874 http://www.nakedcapitalism.com/2008/05/links-52208.html#comment-8409 bobo7874 Thu, 22 May 2008 20:52:00 +0000 http://www.nakedcapitalism.com/2008/05/links-52208/#comment-8409 I would like to hear what poster's have to say about these articles by Frederick Feldkamp, suggesting that SEC and FASB rules giving big brokers and banks an advantage in doing securitizations, increase credit spreads to the detriment of the larger economy. He's got graphs showing correlation between the enactment of various rules and increases or decreases in credit spreads.<br/><br/>http://www.iflr.com/?Page=17&PUBID=213&ISS=16148&SID=508136&SM=&SearchStr=<br/><br/>http://www.iflr.com/?ISS=16393&PUBID=213&Page=17&SID=514677&SM=&SearchStr=<br/><br/>http://www.iflr.com/?Page=10&PUBID=33&ISS=12024&SID=512055&TYPE=20<br/><br/>http://www.iflr.com/includes/supplements/PRINT.asp?SID=514325&ISS=16407&PUBID=213<br/><br/>http://www.iflr.com/includes/magazine/PRINT.asp?SID=508665&ISS=11974&PUBID=33 I would like to hear what poster’s have to say about these articles by Frederick Feldkamp, suggesting that SEC and FASB rules giving big brokers and banks an advantage in doing securitizations, increase credit spreads to the detriment of the larger economy. He’s got graphs showing correlation between the enactment of various rules and increases or decreases in credit spreads.

http://www.iflr.com/?Page=17&PUBID=213&ISS=16148&SID=508136&SM=&SearchStr=

http://www.iflr.com/?ISS=16393&PUBID=213&Page=17&SID=514677&SM=&SearchStr=

http://www.iflr.com/?Page=10&PUBID=33&ISS=12024&SID=512055&TYPE=20

http://www.iflr.com/includes/supplements/PRINT.asp?SID=514325&ISS=16407&PUBID=213

http://www.iflr.com/includes/magazine/PRINT.asp?SID=508665&ISS=11974&PUBID=33

]]> By: Anonymous http://www.nakedcapitalism.com/2008/05/links-52208.html#comment-8395 Anonymous Thu, 22 May 2008 15:49:00 +0000 http://www.nakedcapitalism.com/2008/05/links-52208/#comment-8395 Regarding "Raise Margin Requirements Now," keep in mind that airlines like Southwest are already not hedging as much of their fuel costs as they'd like to because margin requirements are so high. Margin requirements on oil, for example, have doubled since last fall. Margins are reset regularly as the price of a commodity goes up.<br/><br/>You could possibly reset margins for speculators and not commercial traders, but I don't think this will affect prices except to make the markets less liquid. If you look at the overnight trading on a commodity like oil, you frequently see big price swings that you would never see during the high-volume trading of the normal trading day. <br/><br/>There have been good posts on this blog about times when liquidity may be bad for a system, but there are also times when it's good. High liquidity in oil markets tends to make prices less volatile and less subject to manipulation.<br/><br/>If people want to buy oil, you really want them to be doing it on a high-volume, highly liquid market. You don't want them taking their capital and buying up oil fields and hoarding that supply in the ground.<br/><br/>Moe Gamble Regarding “Raise Margin Requirements Now,” keep in mind that airlines like Southwest are already not hedging as much of their fuel costs as they’d like to because margin requirements are so high. Margin requirements on oil, for example, have doubled since last fall. Margins are reset regularly as the price of a commodity goes up.

You could possibly reset margins for speculators and not commercial traders, but I don’t think this will affect prices except to make the markets less liquid. If you look at the overnight trading on a commodity like oil, you frequently see big price swings that you would never see during the high-volume trading of the normal trading day.

There have been good posts on this blog about times when liquidity may be bad for a system, but there are also times when it’s good. High liquidity in oil markets tends to make prices less volatile and less subject to manipulation.

If people want to buy oil, you really want them to be doing it on a high-volume, highly liquid market. You don’t want them taking their capital and buying up oil fields and hoarding that supply in the ground.

Moe Gamble

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