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Because The Financial Short Ban Was Not Enough, Europe To Proceed With CDS Short Selling Ban Imminently, Accelerate Terminal Unwind
Just because Europe did not learn any lessons with the financial shorting ban which made everything much worse, here comes this via Bloomberg...
- EU LAW TO BAN NAKED SOVEREIGN CREDIT DEFAULT SWAPS WITH COUNTRY OPT-OUT IF RISK TO SOVEREIGN DEBT MARKET -- EU SOURCES
- EU SAID TO BE CLOSE TO DEAL FOR CURBS ON NAKED SOVEREIGN CDS
- NAKED SOV. CDS DISCUSSIONS PART OF TALKS ON SHORT-SELLING LAW
- SCHAEUBLE SAYS COSTS OF NAKED SHORT SELLING OUTWEIGH BENEFITS
This means that cash Sovereign bonds are about to go bye bye as the only recourse will be to short the living daylights in good old-fashioned govvies. And so we move one step closer to the final unwind courtesy of idiot European bureaucrats who are handing free money on a silver platter to the skeptics...
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Silver platter, bitchez!
In my opinion they need to go A LOT further. To keep this fragile recovery going the world needs to get together to ban ALL negative bets on banking stocks. Banks provide loans to the government in order to pay for essential fiscal programs to boost aggregate demand. The primary dealers are the necessary counterparties to both central banks and governments, and if countries want to continue their fiscal and monetary stimulus programs these banks will need to be recapitalized and protected. The sooner people grow up realize this, the sooner we can start repairing the world economy.
Here is an exellecnt exampe of a TBTF supporter and an anti freee market capitalist, what a fuckin dickwad.
I really think he's pulling your leg. Think of an even more subtle Hamy Wanger.
Here's an excellent example of someone that wouldn't know sarcasm if it bit him in the arse.
MDB is just practicing his art - don't take his words literally. Read some of his other posts before assuming he's on the level. "Essential fiscal programs" should be a clue.
Candyman, I didn't bother to check, but you must be fairly new around here. Don't feel bad, I missed the ever so subtle sarcasm in MDB's first few posts myself, and I'm usually pretty alert to sarcasm.
I really hope this comment is in jest. People like this are beyond delusional and should not be allowed to breath my air. I don't want un-wanted toxification of the air I breath. You must be a GOLDMAN EMPLOYEE or a a GOLDMAN PLANT.
Here is a free tip. GOLDMAN is not doing GOD's Work.
God's work begins afte the banks fail and he is left to sort them out.
I disagree - fuck the "skeptics", fuck investors, fuck capitalism - outlaw every gain which does not derive from productive work - i.e. outlaw "investments", stocks and bonds, which all are de facto "loans" -
in sshort - OUTLAW ALL & ANY CREDIT ITSELF
LOGIC: do we not read daily on zerohedge that too much too easy credit is the source of all evil?
SO therefore: If Credit = Expectation, i.e. Capitalism Expects Gain Without Labor, and, One's "Investment" Gain = Another's Loss of "Investment"/Time/Labor - then capitalism/credit is essentially unfulfillable expectation, denial, laziness, fraud & slavery.
Eureka, isn't that Sharia?
Europe bans shorts, backsides now exposed.
And we all know finding inventory to short sovs in especially non liquid countries/issues is hard as fuck.
Ridiculous.
What will I do now without my CDS
i have plenty of old cds if you want them. eagles greatest hits, rolling stones, pink floyd...... i dont even have a cd player anymore.....
CCR?
CCR; "who'll stop the rain"
MBS: "who'll stop the fraud"
BTO: "takin care of business"
CDO: "Takin care of bonus"
ELP: "In the beginning"
CDS: "The beginning of the end"
i see a bad moon rising....
Quick! Naked short Silver!
The Rotheschildes are laughing because they did that a few weeks ago already.
Tell me what fool is going to buy sov debt anymore except the central bank.....more idiots at work.
The Major Banking Houses have no choice. They need to fuel their ponzi.
Price discovery - so last century.
Speaking of naked short selling, Isn't CME having a vote on position limits today?
It is ongoing right now, but frankly I doubt there is anyone in the world naive enough to expect the CFTC to do anything at all to actually improve the regulation of the markets?
http://www.capitolconnection.net/capcon/cftc/101811/CFTCwebcast-live.htm#
ROFL -- RealPlayer OR Windows Media Player. Great choices.
Why am I not surprised?
It's like it's still 1998 over there.
I'm stuck in 1997, mebbe I can help. There is much discussion of pass-throughs and exemptions for 'bonafide hedges', storage companies exemptions, everyone with the POWER will be exempt from anything discussed today.
With JPM's 'storage' of copper and GS 'storage' of aluminum, I'm sure they are in the clear.
IOW, exactly what we expected.
Hmmm. Strange. Mr. Market seems to not see this as bullish.
Mr Oil doesn't care
Mr Oil never cares. Cause he knows bitchez wanna be all up in his shiz.
Banksters ain't shit but hoes and tricks.....
Give him until the end of the day to squeeze the shorts on this "good" fundamental news.
Naked shorting is quite the oxymoron. Europe should just ban shorting anything naked all together.
More headlines from Germany:
GERMAN RULING COALITION SOURCES: MERKEL SAYS EU SUMMIT TO DECIDE ON WORK PLAN FOR GREECE (LOL!!!)
GERMAN COALITION SOURCES: MERKEL SAYS LEVERAGING EFSF VIA ECB IS RULED OUT
GERMAN COALITION SOURCES: MERKEL SAYS EXPECTS AGREEMENT ON SENDING DEFICIT-BUSTING COUNTRIES TO EUROPEAN COURT
I wonder what a 'Work Plan' is?
Arbeit macht frei?
They will line the Athenian streets with trees.
Could it be one step closer to "ein volk, ein reich, ein fuhrer"?
No because Schauble has already made it clear that next weekend would not be "A Final Solution"
But, really that's what Europe is aiming for: line up all the taxpayers and ship them off to debtor's camp.
But, really that's what Europe is aiming for: line up all the taxpayers and ship them off to debtor's camp.
MERKEL SAYS EXPECTS AGREEMENT ON SENDING DEFICIT-BUSTING COUNTRIES TO EUROPEAN COURT
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What are they going to do? Fine them?
save button fail :(
+1 ROR
Right?
... EURO 2.9 TRILLION FINE FOR YOUR MALINVESTMENT!
It would actually be a pretty clever way to pass funds through. Everyone could take a turn Greece could sue Germany for its predatory lending practices and Germany could "pay" them a settlement. They could just keep the can moving for awhile with this MO.
I am now convinced that we are dealing with a bunch of inbred morons.
These guys really have been parading around with no clothes on for years. Now the naive little boy called "the market" is about to yell this previously ignored fact out to the world.
in 2 months we will see the headline - "Europe bans ALL selling"
Isn't "naked short selling" on everything BAD in general ?
Why would this be bad news ? Just interested to know.
Tomorrows headline, today: Europe bans gravity.
Beware, I am not a fan of the politicians, I hate them for their actions most of the time.
But take some time, think about this, about this new regulation.
To me, in fact, this regulation may make some sense, which a short selling ban on stocks of course does not.
I don´t understand why banning the naked cds would detonate the liquidation of the bonds, it´s suposed to be banned the naked CDS, not those covered with actual insurable bonds. Someone could please explain that´s assertion from Tyler?
Thks
if you can't be naked CDS, then you'd go naked the underlying Sov's. But the ban would surely have to cover that as well.
None of these actions generally will work unless they're permanent. Short term is pointless, it's like your compressing a spring and when the ban ends it blows up in your face. But needless to say people will find ways to make the trade, ban CDS and maybe TRS or CFD 's will become the new thing.
OK. I see it.. They have to just ban NAKED SHORT SELLING on everything period, forever.
Not just ban it for month or so on product X. Cause this way they are just causing more volatility and benefiting specific investors groups or gov.
When their backs are at the wall i.e. panic mode reactions.
Interesting how a good idea could just become the opposite of what it is supposed to be, just by changing the timeframe from "forever" to "short period of time" ;)
Agree. Naked shorting is one of the primary reasons we have such a massive derivative timebomb over our heads. Please explain why banning naked shorting is such a bad thing Tyler. Surely this is one of the things you rail against?
Is MillionDollarBonus a JPMorgan plant.???
Or just another idiot.
MDB is a gem, his schtick very subtly demonstrates the absurdity that is Keynesian thought.
Naked CDS purchasing is sometimes referred to as "hedging". You need not own the actual bonds to be affected by a sovereign debt default. You could be trying to hedge the risk associates with muni bonds at a state level that have a correlation exposure to the home country credit rating, yet there is no specific instrument or willing party to underwrite CDS protection for the specific entity tied to the bond you own. Hence, you buy the CDS protection to the sovereign debt, a much more liquid instrument.
give me a break, it's naked shorting, which is illegal in the us, and the delivery which is supposed to happen in three days often doesn't, and no body gets proecuted. at times the short interest in lehman was greater than the free float (sorry not sure correct term). nothing wrong with this rule I agree with it completely
What exactly is the purchaser of a CDS shorting?
From the FT-- reasons why the naked CDS ban is a bad idea from Andrew Baker, chief executive of the Alternative Investment Management Association.
http://www.ft.com/intl/cms/s/0/4e954256-ef3e-11e0-918b-00144feab49a.html...
1. Without the naked sellers, those hedging sovereign assets won't have anyone to trade with.
2. Those hedging other types of investments, like those in infrastructure won't be able to use CDS.
What I don't get is the technical feasibility of this kind of ban. Isn't there an international market for CDS? If you can't trade in Frankfurt, why can't you trade CDS in New York?
Ultimately, the ban seems like a distraction to blame speculators for real problems.
A naked short is a counterfeit, plain and simple.
Kitco has the post 'Position Limits ‘Sideshow’ To Real Financial Reform – CFTC’s Dunn'
http://www.kitco.com/reports/KitcoNewsMarketNuggets20111018.html
Dunn says. “To be clear, no one has proven that the looming specter of excessive speculation in the futures markets we regulate even exists”
Would GATA’s evidence of gold/silver price suppression constitute excessive speculation ?
ARE YOU KIDDING ME?....you know what this means? that these libertarian/corporatist idiots are not only allowed to create TOXIC DERIVATIVE time bombs but cover them in crazy glue too.
something tells me that these Ayn Rand-ians will be heavily engaged in trying to sabotage the FEDERAL GOVERNMENT with these new FWMDs