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European Short Selling Ban Redux - Europe Reaches Deal On Naked CDS Ban As Desperation Sets In
As expected, the last European desperation step is here
- EU To Prohibit Naked CDS Positions, Unless To Hedge Exposure- Dow Jones
- EU - Deal Reached On Limits To Short- Selling, CDS- Dow Jones
You know, because it is all the speculator's fault. Just like the financial short selling ban lead to a brief rally only to be followed by an epic collapse, expect precisely the same thing to occur this time around.
And for those who may have missed it, here is Credit Suisse with its analysis of the disastrous consequences of the short selling ban
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good for the CME, NYSE-Euronext and Duetche Borse. more biz coming their way.
Bad for the TBTF banks, one less product for them to pitch.
That's ok. Bullish
Oh Dear. A very popular use of CDS is for traders to buy an "asset", then insure it with a CDS and then back-discount all the interests paid on the "asset" to Now for Bonus Time. This works great because with the CDS, the capital "consumed" by having a potentially risky asset on the balance sheet is negated by having the CDS as insurance - ignoring of course that in these fraudulent times an 'AAA' asset can go to Zero and a CDS might well be backed by air, because that would be the banks problem, not the traders - which means that banks can leverage to infinity "for free" as long as there are sellers of CDS ... everyone is Hapieee.
I.O.W: I think that the market is about to hit an air-pocket. A lot of OTC crap will quite suddently unwind .... or maybe they stick it to the ECB and the EFSF.
show me the gold - bathing suits - http://hedge.ly/gFWVSm
CFTC position limits, too.
This always ends well. Well then, up we go, for now. Someone please remind me. Similar rules changes were made in August, how long and how much of a temporary bump across all equities should we expect?
Calvinball Rule 1.2: Any player may declare a new rule at any point in the game.
It's not a matter of who's fault it is naked shorts whether in CDS or other instruments increase leverage in the system (the short seller receives the proceeds of the short at the time of sale) and something needs to be done to control and reduce the overall leverage in the system. True this measure is imperfect and stupid but it is polotically speaking low hanging fruit. We would all prefer if they would just overtly control all leverage but they don't have the will, the brains or the votes so instead we shall see a bunch of disconnected steps like this.
As a point of curiosity. Isn't banning Naked short selling something ZH has advocated for some time?
I thought it was naked cds.
Sure, while we are at it, they should also ban all CDS and increase ALL margin requirements to 100% for ALL commodities and PMs.
Bring it.
Well sure.
But.
I don't get why ZH is condemning this ban. As long as they only ban naked shorts, and not all shorts, this is a good thing, ain't it?
From my perspective, yes.
mine too. and would it not be funny if this actually worked? Reminds me about talk of fx interventions not working, only for swiss to show that it is actually very easy to weaken your own currency.
Of course the Swiss are in a very different situation than the U.S. and are a very homogeneous society by comparison.
Some commentators like naked
Allergic to regulations?
Me? I'd cut the FinSystem antitrust wise in 10000 pieces...
DoChenRollerBearing, is CheekyBastard ever going to comment here again?
I thought you maintained some contact? Times like these his input would
be welcome and entertaing to say the least!
Not that I know him beyond reading his posts, but I do remember him stating he having a serious illness in a post like a year ago.
Hope he is doing fine, his oppinions is a true asset
Lots of olt timers leaving, but he was here a few days ago, I think it was a OWS post. haven't seen CD in a while either.
Didn't Marla catch a serious illness too... Original RoboTrader lost his passwd and was replaced by momo-Robo. One by one they expire, or are converted, by...whom?
I've only seen one or two Cheeky posts in the past 6 or 8 months.
New Highs for the dayt. WTF WTF WTF
So if you can't play it by buying a CDS, looks like they will have to short the bund, thus making the underlying problem worse. Right?
ROR
Never saw that coming.
And of course all the TBTF have expose they need to hedge...as the fraud rigged game marches on.
Not sure if I have the balls to stay short into today's close with the market being so close to resistance and AAPL, INTC, and YHOO reporting after the close.
Just sayin'
Text of "The Rule?" Is there a "legitimate hedge" clause in it?
Betcha Tyler has a post on it shortly.
angela merkel naked is also bad............
janet napolitano is worse, much worse! you'd never eat cheese again!
Next thing that is going to happen is this:
Banks will be using their "cash reserves" to go out on the open market and start shorting their own CDO's, and cause a massive squeeze.
if they were not such pussies, they would ban the collapse. Problem solved. Short ban here naked CDS ban there... what we need are bold steps. Ban the collapse. Now.
Unfortunately, your sarcasm rings too true. Never underestimate the capacity of unelected eurocrats to delude themselves.
I don't get it. If naked, then you are not wearing shorts. If wearing shorts, then you are not naked. Are the shorts transparent?
From what I have considered, it seems (but I have to check, too many charts, I also want to be able to study ratio (not only forex-any) charts of even triple ratio charts with movable/stretchable time scales, log-log plots etc) that after Eurozone final cleanup in 2013, from 2014 GPB will be pegged to the USD in rather narrow 0,71 GPB per USD+-2% corridor. in 2016, with USA default, GBP will obvioulsy move up into 0,5 GPB per USD within 2 years.
Also, relatively stable vs. USD during 2014 will be CHF and especially CAD. JPY may even grow from 2013 vs, USD. The big sufferer in USD index is EUR-hence USDx will move up quite a lot.
One more interesting thing ( I have not been able to make any meaningful assessment of Yuan) is that one currency that will appreciate against USD starting already from 2014 will be PLN, and perhaps, CZK. What it tells, is, that not only these countries have developed good industrial base in post soviet years, but also, that GERMAN economic machine will be running full speed after 2013 German federal elections (between 1 September and 27 October 2013) . From the chart I had published earlier elsewhere:
USD per EUR 2011-2018
One can see that something happens during early 2013 and than especially in end of 2013 when EUR temporarily takes back lost ground to USD. One of the possible reasons is that French elections in 2012 gives hope, while German in end of 2013 seals EUROZONE cleanup act in what ever form. After that , from UDS per EUR graph its clear, that, either as usual , promises are not kept or new factors arise that makes impossible for them to be kept ( and forces US to peg to USD to stoke inflation).
Such ideas about GBP,
Ivars
Forget the charts, smoke more hopium.
Like I care. I'll be on an Alpha Centauran interstellar cruiser late December 2012, flown by Mayan time travelers, who'll be evacuating us just before the Vampire Squid EATS THE ENTIRE FUCKING EARTH!
I ain't bullshittin'. It's in the prophecies. That's right bichez, we're gittin' a brand new planet!
Might not have that long, my friend. According to that Harold Camping cat, we have 3 days till the real end of the world. Remember? Haters ridiculed him because the world didn't end on May 21, 2011. But he said that was only the beginning of a process that would culminate on October 21, 2011. Vampire Squid tentacles already extending now.
Someone should tell our Euro friends that banning naked CDS trading will just make CDS spreads wider. Or am I wrong that when you have fewer participants in a market, you get wider, more volatile spreads? Not that traders won't figure a way around this in a heartbeat. What's to stop someone from being long a bond in Europe, allowing them to trade the CDS, then shorting the bond in some other market... net naked.
Yeah, for better or worse, "financial" engineering is well ahead of any regulators - even if they were trying to do their jobs as stated. And when it's just one market, as you point out, it's pretty pointless, except for perhaps determining which set of taxpayers is on the hook to bail these losers out later.
very good move - naked shortselling is basically a counterfeit fraud and should be banned
I disagree, we should have the right to state our opinion, an opinion worth something not just air comming out of our mouths. If the markets/leaders makes blatant misscalculations its completely legitimate in my view to state the opposite opinion which is screw you and your faulty analysis, lies, so on and so forth, putting our own or our clients money at stake.
In short I think we should have the right to call someones bluff, the truth will always win in the long run.
The problem isnt short selling its the fraudulent management and the morons refusing to acknowledge their incompetence.
Frankly I hope it has 'disastrous consequences' so we can get it over with this dog and phony show and end the whole fancy fair at once!
Of course it won't.
i never said shortselling should be banned i said naked shortselling. Why dont people understand the difference ?
i never said shortselling should be banned i said naked shortselling. Why dont people understand the difference ?