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China Soars Most Since 2009 After Government Threatens Short Sellers With Arrest, Global Stocks Surge
Here is a brief sample of some of the measures the Chinese government and the PBOC have unleashed in just the past ten days to prop up the crashing market include:
- a ban on major shareholders, corporate executives, directors from selling stock for 6 months
- freezing more than half (1400 at last count per Bloomberg) of the listed companies from trading,
- blocking fund redemptions, forcing companies to invest in the market,
- halting IPOs,
- reducing equity transaction fees,
- providing daily bailouts to the margin lending authority,
- reducing margin requirements,
- boosting buybacks
- endless propaganda by Beijing Bob.
The measures are summarized below.
But it wasn't until last night's first official threat to "malicious" (short) sellers that they face charges (i.e., arrest), as Xinhua reported yesterday:
[Ministry of Public Security in conjunction with the recent Commission investigation of malicious short stock and stock index clues ] correspondent was informed on the 9th morning , Vice Minister of Public Security Meng Qingfeng led to the Commission , in conjunction with the recent Commission investigation of malicious short stock and stock index clues show regulatory authorities to the operation of heavy combat illegal activities.
And SCMP confirmed:
China’s police will investigate clues pointing to potentially "malicious" short-selling of Chinese shares, state news agency Xinhua says on Thursday. The investigation will allow authorities to "punch back" against unspecified illegal activities, Reuters reports Xinhua saying on its official microblog, citing unidentified sources.
... that the wall of Chinese intervention finally worked. For now.
And since this is all about one thing, the stock, market, it is worth noting that the Shanghai Composite Index had dropped as much as 3.8% to a 4 month low before the news that the cops were going to arrest anyone who used a wrong discount rate in their DCF, when everything suddenly took off, and the SHCOMP closed a "Dramamine required" 5.8% higher, the biggest daily increase since March 2009!
"As China beefs up its efforts to rescue the market, with even the public security ministry involved, market sentiment is recovering slightly from a panicky stage earlier," Shenyin Wanguo analyst Qian Qimin says by phone
This is how some other Chinese markets fared: CSI 300 +6.4% led by industrials, consumer staples; the Shenzhen Composite Index +3.8%; all ChiNext shrs trading today were limit up a day after virtually the entire market was locked limit down.
The best and briefest summary comes from China Southern Fund Management chief strategist Yang Delong, who said that the government efforts "hit the right spot." Well, yes, when you threaten to arrest sellers, it does tend to have a short-term effect. The only escalation from there is arresting anyone who doesn't buy which in turn would promptly lead to this.
"I shorted" pic.twitter.com/Q3FzGh7gVC
— zerohedge (@zerohedge) July 9, 2015
Elsehwere in Asia, the Nikkei 225 closed +0.60% after tumbling 3.2% earlier in the day, as the Chinese "anti-selling measures" spread and "inspired' confidence, with the ASX 200 unchanged and weighed by materials as iron fell to a record low. Across the board equities did pull off worst levels as gains in Chinese stocks sparked an improvement in confidence, which also weighed on JGBs, with losses exacerbated by a weak 30-year JGB auction which drew the lowest b/c since 2004.
The Chinese gain promptly rippled through Europe as well, which now appears more focused on Asia than on Greece, and European shares rose most since July 1. Ironically, for all the talk of an imminent deal, overnight none other than famous Grexitologist, Citi's Willem Buiter allowed us a 2011 deja vu when he joined JPM in saying that Greece’s exit from Eurozone is now the "base case" and most likely outcome, either via short-term exit in next few months or over next 1-3 years.
Curiously the Greek bond market seems to agree as can be seen by the price action in Greek 2 year bonds.
In any event the euphoria over Chinese central planners threatening with bodily harm in what is clearly one of the last steps before all control is lost, is enough to offset the unpleasant encroaching of reality. One wonders just what measures the US itself will take when faced with China's bursting-bubble predicament.
For now, however, after US stocks tumbled yesterday just before the NYSE "unexpectedly" closed for nearly 4 hours a day after 70% of Chinese stocks were frozen from trading, futures right now are set for a 1% open.
Somehow we doubt the NYSE will break today.
Newsflow has been relatively light in today's European session, thereby seeing equities (Euro Stoxx: 1.8%) take their lead from their Asian counterparts. In terms of US specific equity news, yesterday saw Alcoa officially kick off earning season after reporting Q2 Adj. EPS USD 0.19 vs. Exp. USD 0.22 and Q2 revenue USD 5.90bIn vs. Exp. USD 5.80bIn. Looking ahead to today, notable US earnings include Pepsi and Walgreens. With the state of play in Greece seeming to be on hold ahead of the weekend, Bunds have been relatively unmoved this morning, with fixed income markets seeing little price action and today's only notable auction a US USD 13bIn 30yr bond auction.
FX markets have seen a reversal of yesterday's moves in key pairs, with EUR and JPY weaker this morning, seeing USD/JPY retake 121.00 to the upside in an unwinding of safe haven flows after Chinese equities recovered some of yesterday's losses. The USD has also seen a reversal of yesterday's losses to trade higher this morning by around 0.2%.
Improved Chinese sentiment boosted the commodity complex with WTI (+0.73), Brent Crude (+0.59), with metals also benefitting from the improved Chinese sentiment to rebound from recent weakness. This gold trading higher (+0.2%) as it bounced back from March 17th lows and copper (+0.9%) also benefitting after reaching its lowest level since 2009 yesterday. UBS have revised its avg. platinum price forecast for 2015 to USD 1160 /oz vs Prey. USD 1280 /oz and its Palladium avg. price forecast to USD 770 /oz vs Prey. USD850 /oz. UBS also lowered their long term Platinum price forecast to USD 1600 (RTRS).
Looking ahead, the rest of the day sees the BoE rate decision, US weekly jobs numbers and comments from Fed's Kocherlakota, Brainard and George.
In summary: European shares extend gains, rise most since July 1, with autos, financials outperforming; U.S. equity futures rise along with gold, oil, dollar. Asian stocks rise most since June 23. Iberian, Italian, French stocks lead outperformers among European bourses; yields on Dutch, German, Greek, U.K. 10-yr bonds rise; Spanish, Portuguese yields fall. U.S. jobless claims, continuing claims, Bloomberg consumer comfort due later
Market Wrap
- S&P 500 futures up 1% to 2059.3
- Stoxx 600 up 1.5% to 378.6
- US 10Yr yield up 5bps to 2.24%
- German 10Yr yield up 2bps to 0.69%
- MSCI Asia Pacific up 0.7% to 140.7
- Gold spot up 0.3% to $1162.4/oz
- Eurostoxx 50 +1.7%, FTSE 100 +1.1%, CAC 40 +1.7%, DAX +1.6%, IBEX +2%, FTSEMIB +1.7%, SMI +1%
- Asian stocks rise with the Shanghai Composite outperforming; MSCI Asia Pacific up 0.7% to 140.7
- Nikkei 225 up 0.6%, Hang Seng up 3.7%, Kospi up 0.6%, Shanghai Composite up 5.8%, ASX up 0%, Sensex down 0.4%
- Euro down 0.39% to $1.1034
- Dollar Index up 0.23% to 96.51
- Italian 10Yr yield down 5bps to 2.17%
- Spanish 10Yr yield down 6bps to 2.17%
- French 10Yr yield down 0bps to 1.12%
- S&P GSCI Index up 0.8% to 412.6
- Brent Futures up 1.2% to $57.7/bbl, WTI Futures up 1.5% to $52.4/bbl
- LME 3m Copper up 1% to $5577.5/MT
- LME 3m Nickel up 2.6% to $11240/MT
- Wheat futures up 0.6% to 581 USd/bu
Bulletin headline summary from RanSquawk and Bloomberg:
- Chinese markets staged a relief rally to see the Shanghai Composite post its largest one day gain since 2009 following a slew of additional measures by Chinese officials to curb losses coupled with encouraging CPI data.
- Improved Chinese sentiment boosts the commodity complex, with gold and copper coming off their multi month lows.
- Today sees the BoE rate decision, US weekly job numbers, EIA NatGas Storage change, comments
from Fed's Kocherlakota, Brainard and George as well as earnings from Pepsi and Walgreens. - Treasuries decline amid gains in stocks and commodities, Greece headlines; week’s supply concludes with $13b 30Y bonds, WI 3.020% vs 3.138% in June.
- The selloff in China’s stock markets halted after regulators late Wednesday banned major stockholders from selling stakes; more than half the country’s listed companies have been suspended from trading
- Templeton Emerging Markets Group called the stock sale ban an act of “desperation”; UBS Wealth Management labels it “extreme”; Wells Fargo Funds Management says it just “postpones the inevitable”
- China’s securities regulator suspended reviews of IPOs and other share sales, people familiar with the matter said
- With a cacophony of voices predicting a possible exit of Greece from the currency, Tsipras has until Thursday midnight to present an economic plan that includes spending cuts in exchange for a new bailout
- Merkel is doubtful he’ll deliver, and is now willing to accept a Greek exit, according to two govt officals familiar with her strategy who asked not to be named
- Draghi suggested the Greek debt crisis is getting increasingly hard to fix, speaking hours before the ECB maintained its freeze on extra aid for the country’s banks
- An agreement to curb Iran’s nuclear program could create a bonanza for U.S. defense contractors who already are benefiting as the Obama administration tries to assuage Israeli and Gulf Arab concerns by cutting deals for more than $6b in military hardware
- Sovereign 10Y bond yields mostly higher; Greek 10Y yields 19.439%. Asian stocks mostly higher. European stocks and U.S. equity-index futures fall. Crude oil, gold and copper higher
US Event Calendar
- 8:30am: Initial Jobless Claims, July 4, est. 275k (prior 281k)
- Continuing Claims, June 27, est. 2.250m (prior 2.264m)
- 9:45am: Bloomberg Consumer Comfort, July 5 (prior 44)
- 1:00pm: U.S. to sell $13b 30Y bonds in reopening
DB's Jim Reid completes the overnight event summary
If anyone was under any illusions that we're living in free global markets then China's recent policy actions should be a reminder that we're not and haven't really been for several years. Global financial markets are not really operating under capitalism but then again I'm not really sure I know what you'd call the system we are currently living under.
A simplistic analysis of the problems over the last couple of decades is that bubbles are repeatedly being inflated by policy action and then never allowed to deflate properly when they turn. Whether that be a huge Greek government debt pile that the authorities have been too scared to see default over the last few years or whether that be a Chinese equity market in apparent free-fall, there is a link. These and numerous other examples in recent years leaves huge sub-optimal resource allocation issues throughout the global economy and a need for more and more stimulus to retain stability. To be fair China is only doing what the West did a few years ago when they banned the shorting of things like various company equities and sovereign CDS. However China does seem to be raising the bar in terms of intervention techniques. One such example came yesterday after the China close with the news that the China Securities Regulatory Commission has banned major shareholders (with stakes of more than 5%), corporate executive and directors from selling stakes in listed companies for six months. A truly breathtaking initiative.
For us the China situation is more potentially worrying than Greece for global markets but overall it fits with our view of intervention and high liquidity being needed across the globe for many years to come. Don't be surprised by more Chinese major policy initiatives over the coming days. If Greece does go towards the exit door, expect the ECB to further aggressively intervene.
Looking at the follow through this morning, there's been more volatility but there are perhaps some signs of the various measures of the last couple days having an effect with the Shanghai Comp (+1.30%), Shenzhen (+2.93%) and CSI 300 (+2.43%) currently in positive territory. The Shanghai Comp in particular initially opened nearly 4% lower only to then swing to a 2.5% gain in the space of an hour before then settling down. According to Bloomberg over 1400 companies are still suspended from trading on the mainland exchanges. Data for the region was almost overshadowed with so much of the focus on the equity moves. However, China’s CPI print for June showed a modest +0.2% rise to 1.4% yoy and was slightly above market expectations. PPI continues to remain under pressure however, with the June reading moving even lower to -4.8% yoy (vs. -4.6% expected) from -4.6%.
As we discussed over the last few days, the sell-off in China has also had a knock on impact on parts of the commodity market. Although rebounding slightly yesterday, Copper had struck a 9-year low on Tuesday, falling as much as 18% off the highs of early May. Iron ore has been another casualty of the sell-off with the commodity falling over 30% from the highs in June (including a 10% crash yesterday) which has had a knock on effect on Australian mining names in particular.
Returning to other markets this morning, the Hang Seng (+3.43%) is benefiting from the rebound in China but it’s a relatively weak session elsewhere with the Nikkei (-1.28%), Kospi (-0.08%) and ASX (-0.39%) all down. S&P 500 futures are around half a percent higher while 10y Treasury yields have moved up 3.4bps.
Over to the latest on Greece. Yesterday we learnt that Greece has submitted a request for a 3-year bailout program from the ESM as had been widely expected. In the letter, the Greek government said that it would detail a ‘comprehensive and specific reform agenda’ by today. There were some suggestions that the letter carried some softer language, including rhetoric around softer demands for debt restructuring however it will be the finalized list of reforms from the Greek side which will ultimately decide which direction we head over the weekend. Outside of the news of the formal loan request, a European Parliament session yesterday which included Greek PM Tsipras was said to have been stormy and led by more defiant rhetoric out of Tsipras. Elsewhere we also heard that Greek banks will stay closed through Monday and extend capital controls in light of Sunday’s summit, while the ECB also kept the ELA cap unchanged.
The subject of Greece was also a focus in the FOMC minutes with the text showing that ‘many participants expressed concern that a failure of Greece and its official creditors to resolve their differences could result in disruptions in financial markets in the euro area, with possible spillover effects on the US. Clearly a lot has happened since the last FOMC meeting last month with regards to Greece. We did however get a hint as to the current Fed thinking through San Francisco Fed President and voting member Williams. The Fed official played down a lot of the concern however, saying that the risks emanating from Greece are ‘unlikely to overturn the otherwise strong fundamentals’ of the US economy and that the economic impact on the global economy remained an ‘unlikely tail risk’. Williams also said that the ECB has the ‘means and will’ to limit the fallout.
The remainder of the minutes offered few surprises on the whole. Officials saw ‘economic conditions as continuing to approach those consistent with warranting’ a start to the normalization process, with members agreeing to make decisions on the target fed funds rate on a meeting-by-meeting basis while there was also some mention of members seeing room for additional progress in reducing labour market slack.
As well as his more conservative comments around Greece, the Fed’s Williams reiterated his forecast for 2015 liftoff and didn’t change his expectation of two hikes this year, saying that ‘every FOMC meeting is on the table’. Williams also noted that the employment goals ‘is in sight’ while there is ‘still some way to go on inflation’. Elsewhere and with regards to China, Williams said that he is ‘a lot less concerned’ about China’s near term outlook, while optimistic that they have the ‘will and the leeway to take the necessary policy actions’.
There was little in the way of market reaction following the minutes. Treasury yields had already declined in the run up and the 10y benchmark eventually closed 6.6bps lower at 2.193%. Fed Funds contracts took another leg lower with the Dec 15 (-1bp), Dec 16 (-4bps) and Dec 17 (-5bps) contracts falling to 0.245%, 0.885% and 1.550% respectively with the latter now creeping in on the YTD lows in yield. We still think the Fed won't hike in 2015 but market pricing is increasingly reflecting this possibility. Elsewhere, US equities had a weaker session with the S&P 500 falling 1.67% while the NYSE halted trading for over 3 hours following a technical malfunction. Oil markets were mixed with Brent (+0.35%) a touch higher but WTI (-1.30%) sliding now for the fifth consecutive session while Gold finished +0.27%. Consumer credit data for May came in below expectations at $16.1bn (vs. $18.5bn expected) but we did see a near $1bn upward revision to April’s print to $21.4bn. Elsewhere, Alcoa unofficially kicked off earnings season (reporting after the closing bell) in the US with a miss. The earnings calendar is set to kick into gear next week when we see the US banks reporting so along with Greece, China, and the Fed (Yellen's semi-annual testimony) there’ll be plenty to keep an eye on.
Closer to home yesterday, the impact from the turmoil in Chinese equities appeared to be relatively short lived in European markets as the Stoxx 600 (+0.04%), DAX (+0.66%) and CAC (+0.75%) all finished up, while peripheral markets largely outperformed with the IBEX and FTSE MIB +0.81% and +2.64% respectively. With markets swinging once again back to hope of progress in Greece, peripheral yields moved tighter with Italy (-5.0bps), Spain (-3.6bps) and Portugal (-12.2bps) all having a decent day. 10y Bunds moved 2.9bps higher to 0.669% while Greek yields surged wider, led by the 2y (+241bps) part of the curve.
Over in the UK, DB’s George Buckley noted that yesterday’s Budget (the first by an all-Conservative government since the late-1990’s) was long on measures. George summarised that what was announced amounted to a significant increase in tax-take/spending outlays for the Treasury, but it is important to see this for what it is. George believes that rather than a meaningful tightening in fiscal policy, we should view this as a ‘fleshing out’ of the austerity envelope that has already been announced and as a result George believes that this has little impact on when the BoE will begin to raise rates, with May 2016 still favored. 10y Gilts closed +5.9bps higher yesterday at 1.891%.
In terms of the day ahead, Greece and China will likely attract the bulk of the headlines again. Data wise in the European timezone this morning we’ve got German trade data due as well as the UK BoE decision at midday. Its quiet this afternoon in the US with just initial jobless claims due, although the Fed’s Kocherlakota, Brainard and George are all due to speak today.
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Beating ploughshares into guillotines.
We Shot some selling folks.
We shot some short folks.
So who gets to realize all those juicy stock profits from overpriced and fraudulent valuations?
I can just see all these Chinese day traders staring at each other, wondering who gets the prize to pay off their bad realestate investments.
We have to kill you, to help your stock portfolio.
it's for the "greater good" comrade!
Stupid bureaucrats! Who will buy when the "longs" decide to liquidate???? This will be the last "short covering" rally in China. Next time the Chinese market will crash for good.
The direct result of this action will be capital flight.
So you would feel less attached to your long positions if you knew someone couldn't short the fuck out of them?
Bath House stopped in mid-hump when he heard news of possible arrests.
Turned up the volume and redoubled his efforts.
You buy stocks! You keep stocks! You sell stocks, we kirr you!
Execute a sell and be executed.
That works. Stock market communist style.
No different than Vegas. You are allowed to take a little from a table that is rolling in bucks for the house. Just don't think you can own the table.
Short selling should not be allowed period. It's not what the market was set up to do which was to allow firms to raise capital. Whoever allowed short selling was a fool anyway. Any nation with any kind of backbone would ban it.
The same could be said for HFT.
"One wonders just what measures the US itself will take when faced with China's bursting-bubble predicament."
we saw that yesterday, they pulled the fkn plug on the entire exchange!
You can bet your biffy that won't happen today.
But you never know,,, they might break it "a little" just to deflect criticism...
President Xi: (sighs) "If I could only get these new programs past the Central Committee. John, I hired you from the West to advise me. What say you?"
Corzine: "I have taken the liberty, Great Leader, to draw up a list of short-sellers within the Central Committee. Have them arrested."
Xi: "I knew you could find a solution! I have heard my partner, Vlad, has made you an offer. I will double it."
Corzine: "No, my President. I stay bought."
Xi: "At least take these two nubile concubines back to your quarters."
Corzine: "With pleasure, Great One. (bows)."
Aha, so it wasnt Soros after all, because an arrest threat wouldnt make him worry as he is out of reach. Now you stupid chinese can look right into mirror as to who was responsible - your very own oligarchs!
Short covering rally
Nothing whatever wrong with selling something you own ....... selling something you do not own is wrong .... and is fraud.
In a bit less than 6 months, they will have to ban selling for 6 months (unless you have the right friends). BTW, what is everyone buying again?
Buy or die !
More examples of a 21st century free market. And the hits just keep coming.
Apparently the Chinese are every bit the morons that the Amerikans and Europeons are.
While they are at it, toss in a mandatory MyRA.
Shorting is just another zio trick to steal ownership and resources from credible business that are trying to produce something. Firms should request that shorting be banned.
Stock market has turned into a casino - it was set up for financing the REAL economy. Now it is just a joke and killing real capitalists. Those who short are not real capitalists - they are just gamblers. Send them to China for their lickings. Hedge funds are scum bags sucking the life out of the economy.
Please.
Shorting overinflated , central bank driven bullshit is a more legitimate way to make paper than through massively subsidized "real economy" companies manufacturing crap in china , and selling it it to you using the usual army of PR , marketing and corporate fuckers , and paying less taxes than you are.
Please.
Shorting overinflated , central bank driven bullshit is a more legitimate way to make paper than through massively subsidized "real economy" companies manufacturing crap in china , and selling it it to you using the usual army of PR , marketing and corporate fuckers , and paying less taxes than you are.
Shorting is just another zio trick to steal ownership and resources from credible business that are trying to produce something. Firms should request that shorting be banned.
Stock market has turned into a casino - it was set up for financing the REAL economy. Now it is just a joke and killing real capitalists. Those who short are not real capitalists - they are just gamblers. Send them to China for their lickings. Hedge funds are scum bags sucking the life out of the economy.
How will The Fed rally the markets if there are no shorts to squeeze?... Oh yeah, overnight Futures.
I like ZH alot but it is obvious that many here do not know anything about real work, all they think about is a quick buck trading stocks. Well I got some news for you. This is BS work and not the REAL economy. That is what has gotten us into this problem in the first place.
USA does not have enough regulation to deal with human greed as there is always someone to legitimize creating cheats in the system like shorting.
What is even more obvious is that you don't know shit about how market works.
Short selling means a stock is borrowed AND repurchased , it contributes more to upside volume in price discovery than buying alone would , because fear works both ways .. supports are created by short covering and volume is reversed during short squeeze
Next is 'you can buy but you can't sell'
So much for trying to maintain the ' illusion ' of free markets.
"Resliliant" .... "Markets"
Obama joins his socialist friends and does the same.
There are people dying to sell their shares.
Sell now, before the government outlaws it!
I'm still waiting for the day they don't allow anyone to sell period, only trade with other 'government certified' stocks. Not just in China.
You mean like trading your stock for worthless paper IOU's?
Kinda like now?
Buy, sell, calls, puts, should be allowed, but anyone who thinks that shorting is legitimate needs their head examined.
Just imagine if you had a company that you worked very hard at, and some asshole shorts the shit out of it, ties up your financing, people start to wonder if you company is crap for no reason other than somoene like Soros thinks he can make a buck on it.
When Capitalism reaches its zenith, everyone will be an investor and no one will be doing anything.
Central Bank inflated asset bubbles will provide for all.
The biggest market in the world today is derivatives, money making money without a useful product or service in sight.
With the market in derivatives being ten times larger than global GDP we can see that making useful products and providing useful services is nearly irrelevant even today.
We are nearly there.
What could go wrong?
... "... a ban on major shareholders, corporate executives, directors from selling stock for 6 months"
... hell of a great idea ... it would eliminate stock buy-backs, pump and dumps and malicious shorts by the Squid, Soros, JPM, Citi, Buffett, chinese and worldwide oligarchs, etc. ...
... and they faced their market problems head-on ... didn't make excuses of 'software glitches' and other alibis spawned by the yellow-spined-let's-close-the-damned-thing-before-the-whole-thing-tanks NYSE ...
... and to those China-haters ...
... you can hate China all you want, but before you do that, check your AAPL and other smart gadgets in your pockets (see where they're made); and count how many times you laugh at those fat-assed redneck shoppers at Walmart when you visit and buy all those cheap Made in China trinkets; and how you gushed at how much you would save lining up on Thanksgiving sale before the sun rises at your favourite retail shop, kicking and punching each other out, to get your greedy hands on those I-don't-need-it-but-it's-so-cheap Made in China electronic stuff ... and while you're at it ... check your house and count how many Made in China items are scattered around your kitchen and your whole house ... and then you can hate China all you want ... hypocrites! ...
... and, btw, in case you haven't realized, China became rich because of you ... remember, the best part of waking up is opening your eyes ...
I can’t believe the stupid comments about shorting on ZH. Short sells are a legitimate trading and market method that are an integral part of maintaining markets. Stocks move in directions. Shorts are for the down direction. If we cut shorts out of the markets 60% of the trading programs are toast. This relegates market trading to follow trend only. In this type of environment you will see huge downers as everyone tries to pile out of the trend at once.
So let us eliminate shorts and see what happens. The first thing go is all commodity and index futures. Futures purchase require both sides a long buyer and a short seller. Instead we can require full payment in advance for commodities to be delivered. That should shut down civilization pretty quick. Then there is those short covering rallies that boost the stock and the market we can do away with those also and require people to buy 5 times more after a sell off to keep the markets in tune with today.
What stupidity…
What BS. Markets were created for capital funding sources for business not some crap casino as you want.
If you believe what you say then don't complain about banks selling naked shorts on the gold futures market. I suppose you like the new gold market in shanghai where you can only buy and sell real metal to find real price discovery. Ok for gold but don't touch our casino stock markets.
And this comment about commodities : I never said options were bad. Buy an option. There is never a legitimate reason to short anything.
Buy, Sell, and options are enough. Even shorts didn't satisfy the greedy. So they invented derivatives. Now that market even affects the underlying commoditiy. The whole market needs a reset back to it's intent.
You are only against what I am saying cause if what I suggest was done you would have to actually WORK at a productive position in the economy rather sitting aroud in your underwear all day trading - which delivers nothing to a real economy.
Butthurt ,much ?
there is no "real economy" bullshit. If you can make paper trading and fight against CBs , go for it. If you can't , shut the fuck up , take some responsability , and do something else for some corporate overlord or whatever you can do .
It doesnt matter.
whatever butt boy. It's your line of thinking that got US in the mess it is now.
I'll be glad when the big reset comes and all this crap casino is done.
Best you learn a trade. Perhaps shining shoes.
I would love to discuss further about price discovery , risk control , individual liberties and responsabilities , basic human psychology and freedom of thoughts with you , if you'd like. But i dont think you'd enjoy it.
Well I know that anyone who shorts has no right to criticize JP Morgan or George Soros as they do the same thing but larger.
Also the fiat created for all this margin, more money for nothing, inflating margin, and margin risk putting brokers and their customers at risk.
Also what annoys me, if I buy a stock in good faith (based on earnings of a firm, their products etc - which of course no one cares about on ZH as they are all just easy money flippers and not investors) and my broker then turns around and lets someone else short my stock, then my broker does not have my stock. This leads to possible risk if the short seller is insolvent, broker becomes insolvent and I have to take the loss.
Now how about the gold miners. They have a product people obviously want, but gold is shit shorted to the point where these firms cannot raise capital without huge interest costs and fear of bankruptcy. That scenario is a fucking joke, even you will agree on that.
Short Selling was the cause of most major stock market crashes in history and the uptick rule was removed in 2007 in the US by lobbied corrupt politicians.
Get rid of short selling, if you don't want something, don't buy it. If you want to sell something, own it first. If you think something will go up or down, buy an option.
I hope the BRICS have the sense to ban short selling, then everyone will have to follow.
I sense we got off from the wrong foot.
i've been trading for a long time , but always options or equivalent tools offered by my broker , never in anything that could influence the actual underlying . let alone participate in the downfall of regular businesses without which i would have nothing to trade in the first place.
I don't know if you still think me and my kind are to blame for the global meltdown , i just do what i like doing after being laid off 2 times in the corporate world.
i lost big on my miners portfolio because i refused to take my losses , i thought about shorting but never did. The problem i have is that shorting , whatever we can feel on the subject , is not always inherently bad . it can bring fresh ,long liquidity after repurchase , and corrective momentum. secondly , it always carries a risk of loss and is subject to liquidity , as in any other financial decisions , and independently of how we feel about shorting stocks , running after short sellers and sending them to jail is not the right thing to do in a legitimate trading place . All stock exchanges have rules , and i'm perfectly fine with a decision to ban short selling as practice , but going after someone for their financial decisions is plain over the top imho.
You seem like a nice guy. I have no problem with you personally After all we both lost on gold miners and were screwed over. We are in the same camp. I am down 60% on miners due to US intervention in the gold market to protect the US dollar.
I have no problem with short sellers themselves as they are just using the rules, I just have a problem with the rule itself. I find it is not only destructive to stock values and company financing but also in turn it creates unemployment and general social turmoil. Firms who use the market for financing generally employ a lot of people who pay taxes, have families, buy homes etc. How can real leaders of nations allow such turmoil to benefit a few rich Wall St type lobbyists?
It is sad that most market crashes were caused by short sellers who benefited hugely while millions were left employed and finanically wiped out. The chinese just lost 3.5 trillion in market value. That's more than the GDP of Canada and Russia combined. Sure it was overvalued and may have come down naturally given poor earnings, but not so far so fast. The average Chinese Mom and Pop investors are now in bad shape having lost their life savings in a country where they may have only made a few grand per year.
There is no humanity spoken about on CNBC. And for sure it will take 20 years before the next generation comes along to get sucked into the market hype. Meanwhile real firms who want to create something and new jobs are at the mercy of these bandits.
I wish we had real leaders in this country. The ones we have now are bribed and waiting for their board appointments.
What kind of moron buys into a system that breaks daily in a downward trend or your threatened with incarceration -or worse- for selling.
Kind of like winning in a casino only to be told you can't cash those chips in.
The naked shorts I can sort of understand but if your willing to put your chips where your mouth is,,, they're your chips and you should be able to do as you wish with them.
PRChips
Crash all you want. We'll make more.
All these real downs and fake ups. I'm gonna need a vomit bag.
-Gab Timov
what happened to your twitter button?
The Chinese, just like like the Russians, are members of the IMF. All IMF member countries are PROHIBITED from backing their currencies with gold:
http://www.24hgold.com/english/news-gold-silver-why-does-the-imf-prohibi...
The Chinese are idiots, just like the Russians. Both the Chinese and the Russians are firmly in the fiat/paper money camp. Were it not for their collaboration with Goldman Sachs, JPM and CITI, how do you think that gold and silver prices could have been held down otherwise? All the idiotic Russians had to do was ask for gold in payment of for their oil and gas, instead of US dollars, if they wanted to win this war without firing a bullet. The Chinese? What a bunch of utter morons. They are buying real estate in the US, thinking that they'll have access to their assets if they ever step out of line? How about making their people work for slaves' wages to produce shit they can't afford for themselves and ship it to the Americans and the Europeans in return for digital I Fuck You's which are not even promises to do anything -- and unconstitutional fraud to boot, in the case of the FRNs?
Spread the word.
The Chinese, just like like the Russians, are members of the IMF. All IMF member countries are PROHIBITED from backing their currencies with gold:
http://www.24hgold.com/english/news-gold-silver-why-does-the-imf-prohibi...
The Chinese are idiots, just like the Russians. Both the Chinese and the Russians are firmly in the fiat/paper money camp. Were it not for their collaboration with Goldman Sachs, JPM and CITI, how do you think that gold and silver prices could have been held down otherwise? All the idiotic Russians had to do was ask for gold in payment of their oil and gas, instead of US dollars, if they wanted to win this war without firing a bullet. The Chinese? What a bunch of utter morons. They are buying real estate in the US, thinking that they'll have access to their assets if they ever step out of line? How about making their people work for slaves' wages to produce shit they can't afford for themselves and ship it to the Americans and the Europeans in return for digital I Fuck You's which are not even promises to do anything -- and unconstitutional fraud to boot, in the case of the FRNs?
Spread the word.
Given that the IMF is openly contemplating having gold in the currency basket, and China, Russia both buying gold hand over fist (with US dollars as it is priced in US dollars) I would say that they are the opposite of the idiots.
Let me get this.....the markets are UP worldwide because the Chinese government threatens to arrest short sellers?
In case anybody had doubts...The entire world has gone totally ape shit, bonkers, 100% off the rocker.
This planet has to be the absolute arm pit of the entire universe.
I say, Fuck you all.
short selling bans have be done many times, even in the USA not so long ago. Ban all short selling, it is the most illogical use of capital ever devised.
Sell a stock short and go to jail. Now I call that an open and free market. Why not just make a law that forces the stock market to always go up 1% every day.
Wag the Dog.....if the markets stop going down and re-levitate, then that must mean the economy is improving........
Obviously those evil short sellers are to blame for the entire crash. Fortunately over here they have been pretty well exterminated.
It was humurous during lunch today when the talking heads of Bloomberg and CNBC were spouting about how good the markets were doing today. I don't think these talking heads realize how close they are to becoming completely unnecessary.
It is illegal to sell on some of the markets and on the ones where it isn't illegal to sell, the markets will be shut down if there is more selling than buying.
"China Soars Most Since 2009 After Government Threatens Short Sellers With Arrest, Global Stocks Surge"
Wrong. It should have read,
China Soars Most Since 2009 After Government sick of US manipulation cyber punks US media, airlines and it's beloved stock exchange"
Presto, Chinese stock marked collapse subsides.
I think we have a solution to all our ills! The SEC can issue a regulatory ruling that stocks can only go up up up! Any selling of stocks will therefore be illegal. (Blantant naked short selling of Gold and Silver will continue to be encouraged however, and supported with tax-payer funds)
This would solve our problems