8 replies to this topic

[milbank]

I am still in shock at the decisions that have been made by our government over the last 24 hours and had no intention of doing anything until I felt comfortable enough and knowledgeable enough of all the angles. The commentary on this board, FF, has been a great deal of help. Maybe I should just rent a room in the Adirondacks and watch the leaves change for a couple of weeks and come back on Oct. 2nd. I don't know. Anyway, great work folks. Thanks.

[dcengr]

I shorted all day in protest and made a handful of change in my futures account. But I can see their motivation. Last thing we need is utter chaos.

[milbank]

Like I said last year, it was all going to come down to Hobbesian choices. Nontheless, I need to see how this plays out and how much affect it will have on the overall markets. Good, bad or indifferent, these latest moves by the Fed and Treasury are unprecedented in my experience and not seen since the 1930's.

Edited by milbank, 19 September 2008 - 03:54 PM.

[kaiser soze]

While I am against government attempts to curb short-selling like the rest of the traders on the board, I would offer a slightly different take. We know that some of the largest institutions such as CALPERS, etc have stopped lending stocks for short-sales. I have accounts at four brokerages. When I have tried to borrow shares, some brokers say they cannot or will try, etc but IB is always mysteriously able to locate shares. I am convinced that naked shorting is still widely prevalent. I am also convinced that so many loopholes exist (eg.options markets,etc) that make a mockery of any rule designed to limit ONLY naked shorting. They tried targeting naked shorting along but that is not preventing it. That is why they targeted all short sales this time. It is not a problem in healthy sectors such as materials and energy where the companies are hugely profitable and the fundamentals are healthy so that naked short sellers know they will be eventually run-over by the freight train of buyers if they kept shorting these names. But several financials are technically insolvent already, no buyers and others are on the way to insolvency. Those that are not insolvent also have very poor earnings visibility and little to no growth to look forward to. Under these conditions, unrestricted naked shorting can indeed lead to the accelerated demise of the underlying franchises.

[milbank]

Your take makes a lot of sense Verbal nontheless, whatever the reasoning, they suddenly changed a very basic part of the game and while I don't trade banks or the index, I was not sure how or if this would have some sort of collateral affect on other sectors. I decided to not do anything but observe and take in the wisdom of the board as the first day of this played out. I was surprised at how little the indices went up compared to what I thought they might do. I was betting myself the Dow would do a minimum of 600 points up at some point. It didn't come near it. The market was due for a bullish move anyway so, this was much more muted than I expected. I'm looking forward to reading what people further post in regard to this move by the SEC this weekend.

[TMN]

I shorted all day in protest and made a handful of change in my futures account.

But I can see their motivation. Last thing we need is utter chaos.

u do make sense

[TMN]

you all make a lot of sense. i reckon a lot of us feel concern although we are making $$ out of the crazy ranges we' re seeing daily. it would be nice if we were able to collect the made $$ in an orderly manner. the markets will soon focus on non existent or declining earnings in other sectors. and this rally will / has helped help financial insitutions to find some bagholders, as cash is worth gold at the moment..

[OEXCHAOS]

You're welcome, milbank. I didn't like the way the volume dried up. That suggested to me that folks don't want to buy or sell or short. THAT's bad for us. Mark

[Rogerdodger]

You're welcome, milbank.

I didn't like the way the volume dried up. That suggested to me that folks don't want to buy or sell or short.

THAT's bad for us.

Mark

It reminds me of those movies where the ship is leaking badly but the crew makes a last ditch patch.
Everybody holds their breath and stands motionless as the water stops gushing...then all hell breaks loose.