naked capitalism

Anonymous says:

If you look at the list of 19 singled out banks, it looks as though this is the list of the entities that are “too big to fail”. In other words, the government can’t let them fail and therefore wants to prevent having to pay for bailing them out like it did for Bear Stearns. I don’t think it really implies that all of them are in a precarious position, although it is likely that many of them may be. All of the other banks can fail and the Federal Reserve will let them be taken care of by the FDIC.

Anonymous says:

This country club of IBs, Deposit Banks, regulators and the political elite s is rotten to the core. It’s like an incestuous grand family now showing their true colors. Exempt PDs from rules of naked short selling. Financial fascism at its purest. All of them be damned to hell! Bernanke’s testimony gave it away when he commented that a higher share price would be beneficial for Fannie and Freddie to raise more share capital. Voila, enter Cox and this Mussolini bill…presto, Anti-trust violations all over the god damn map. We need new police to police the current police.

Anonymous says:

I beleive that the rise in equity prices resulted from the fall in oil prices which itself resulted almost totally from the hope/belief that the Saturday Geneva meeting with Iran, Solana et al and Condi’s man would produce a uranium enrichment pause or other major positive development.

But what actually happened was something of a disaster, wherein the Iranian rep pretty much said, “FU Bush.”

Tom Lindmark says:

The rule change is somewhat a non-event. The circumstances and obvious intent to manipulate markets is not. It represents a dangerous trend in terms of the reaction of the government and the regulators to this whole series of events. These were my thoughts earlier today. http://blog.metro-real-estate.com/?p=738.

Anonymous says:

Shedlock does not see this as a non-event but a sign of desperation, see

http://globaleconomicanalysis.blogspot.com/2008/07/panic-by-fed-anatomy-of-short-squeeze.html

Anonymous says:

My understanding is that the new rules are designed to prevent naked shorting by forcing the short seller to have control of the shares he is selling already locked in, at the time of execution of the short sale, rather than just being able to sell shares before gaining control of the shares. The new rule is actually a good thing.
The problem is that the refs again are showing selective bias by only protecting the special 19. By their actions, the refs are implying there is a critical market operating deficiency with regard short sales. What should be done is that these new rules should be applied not just to these 19, nor limited to the banking industry as a whole. Rather, the new rules should be applied and strongly enforced across entire markets. Naked shorting is an unfair technique that allows a select few to artificially manipulate the market. This practice should be strongly punished.
The reason you won’t see anything close to this taking place is because the Security Industry will fight this tooth and nail. They will tell you with a straight face that this practice provides market liquidity. Yeah right. Phony market liquidity is what it’s really all about.
Look at Check Clearing for the 21st Century Act (or Check 21 Act) as an analogy. One of the reasons that the banking industry pushed for this was that it increased the speed with which checks can clear. Banks could then more quickly and act upon bad checks to reduce losses. So if I repeatedly write checks on my account before the cash is there (even if my intention was to have the cash in place by the time it cleared), and the checks continually bounce, I go to jail. But wait aren’t I just increasing market liquidity?
How is naked shorting any different than when you write checks before you control the cash and why should it be treated any differently?

Anonymous says:

Hello. Basically anyone can still short stock. Its just the naked shorting that is against the law. Nothing wrong with shorting, naked shorting on the other hand is complete horseshit.

Huff Puff says:

Blatant hypocrisy. Many of these protected banks are the worst short sellers, naked or otherwise. Then instead of equality before the law, we give privileges to the offenders? This rule is like giving criminals the exclusive right to bear arms.

Anonymous says:

Follow up to anon @ 9:37am- “How is naked shorting any different than when you write checks before you control the cash and why should it be treated any differently?

Oh… I got it now. It’s wrong when we try to get a free ride with the institution’s money(writing and issuing checks before we have the cash) -but- but it’s a shrewd investment strategy when the bank does the same thing with the public’s funds (let’s pretend the broker has the shares, so they can sell them, sit on the cash for free).

Is this how to make a market or Ponzi scheme?