Should be calm, right ?
Hahahaha .... surely you fantasize !
European markets are up about 5% today as they catch up to the late Friday PM rally in New York.
This morning's WSJ had a story about the crisis at Morgan Stanly in September. The hedge funds, credit default swaps and rumors combined to cause the panic. Hedge funds and even the Street itself would buy credit default swaps and short the stock. They say they were "hedging".. Sure.
That credit default swap "market" really needs to be shut down. There really is no natural insurer of credit in size, except one who actually buys the debt for cash.
All exotic derivatives - derivatives on indices of thinly traded exotic securities - need to be eliminated. That includes derivatives on volatility. No derivative that is not traded in a central exchange should be permitted.
Hedge funds need a massive dose of world-wide regulation to stop them from being the financial Vikings - raid, rape, pillage in the world markets.
Short ETFs should be banned. They are just a loophole from stock borrowing rules via market maker exceptions. Stock borrowing rules should apply to market makers including ETFs.
Overall, the markets need to return to reality, and away from casino gambling in "notional" products.
French
I ran across an interesting usage in my French lesson yesterday:
"Le sauve-qui-peut" comes from the verb, 'sauver', meaning to rescue, save. Le sauver-qui-peut means the panic, stampede, mad rush.
Hmmm ... so le sauver-qui-peut de riches means panic/stampede of the rich.
French is fun.
Actions
I await the expiration of mutual fund transfer limits so I can re-balance Krypto Fund.
For Alpha Fund, I am thinking about putting together a package of single digit / battered stocks to buy that might give me a 10x return over a year or two. Just thinking for now. No rush.
Word of the Day
"Bodkin" - noun [$10] used in Hamlet's Soliloquy by Shakespeare
Bodkin means 1. a blunt, thick needle with a large used esp. for drawing tape etc. through a hem; 2. a long pin for fastening hair; 3. a small pointed instrument for piercing cloth, removing a piece of type for correction, etc.
Sentence: Aftermarket analysis of events in this crisis is showing that mobs of hedge funds gang up on targets to each stick a bodkin into its body, hoping to hide in the crowd.
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27 comments:
i don't know about short etf's
but 2x and 3x shud definitley be banned.........pure gambling vehicles
Rutgers with another beat-down........mike teel with the heisman charge
are they playing next week? what's the spread ?? does it even matter ??
'the house that ray rice built'
i dont know y but i went and watched that eagles abortion.
donny and kolb looked about the same.
what is the constant?
big, fat, stupid mormon Andy Reid!
he mite be the worst coach in the NFL!
to me, one should just short the actual ETF, rather than have "long" ETFs that are short via derivatives.
A short ETF is an evasion of short selling rules.
so Bman....you are saying one should not be allowed to be short in a retirement account?
hmmm ... hadn't considered that, Mav. I actually think direct shorting in retirement account should be OK.
In lieu of that, maybe short ETFs for some large indices (S&P, Q's, etc.) would be OK - no double/triples, though. But you can see how these short ETFs are an evasion, though.
Market maker exception needs to go.
The major principal is that the markets should be forced back to reality and real securities and away from derivatives etc.
double/triple ETFs of any kind are just an evasion of margin rules.
is this fool from Citigroup serious? telling us how hard he's worked and what a great job he's done...
Hubris indeed
yes Bunky...let's make the entire market iiliquid...we need to elminate every option to raise cash or hedge risk during a crisis...we have punished the rich enough, at least those not wise enough to panic when obviously approriate.
The market worked better in the 1980s once portfolio insurance was eliminated.
Or even early 1990s.
This excessive trading/volatility with derivatives is driving the public away.
Maybe even bring back specialists and route all trades through them.
This market mess is like wild swings of 100 years ago.
if they want to hedge like that, go to the S&P futures market.
The pits ... where all can see.
Get rid of the electronic crap where the beefers can hide.
this market has no liquidity
wild swings of 10% mean no liquidity - no ability to get a trade off at a reasonable price.
Funnel all the trades through one place would give real liquidity.
Or even go the nickel pricing.
The amrkets are for real investors to invest and companies to raise capital.
Not derivative gambling by beefers.
Thye have lost focus of the principal pur[pose of the markets.
Dito for bond markets. But the credit default swap crap turned that into a casino, too - devoid of the crucial connection of companies raising debt and investors making long term investments in bonds.
Now it's just a gamble on default.
bring back the specialists????
oh man...they are the original thieves...are you serious bman?
I see Europe is up about 10% - gosh, what a "liquid" marhet.
the bison on a stampede now
no more lone wolves ????
something has to be done to bring sanity to this mess.
at least then a humnan being had some influence ... now there are just machines trading with machines - madness.
Fine ... keep the electronic markets ... make the prices nickel increments ... just prohibit ALL computerized trading and ALL program trading.
make a person enter the trades.
Put beefers on an equal basis with individuals.
ah yes, full return to the the good old days, mutual funds churning the portfolio 100% a year to generate skim and taxes for the investor, dooming the majority to under perform a targeted index...the old boys club of specialists where price is detremined by the number bunktinis consumed during lunch.
at least the specialists made the beefers pay for their antics by discounting their blocks bigtime.
Now the average Joe gets 5% ripped on his little mutual fund exchange with some nutty move in the last five minutes;
or gets his little ETF trade gutted by some computer trading program/
I want the beefers at a DISADVANTAGE compared to the average investor. Not having a built in advantage as now.
If they do their antics, the should pay.
ITS ANDY'S FAULT!!!!!!
besides, long ETFs and index funds eliminated churn risks for average Joe.
sure feels like the hoodlums and gangsters pounded each other to smithereens in the speakeasy
'valentine day's massacre'
PS....ever see that movie Bman? the original in black and white.......a very young george segal
back from dog aquatic therapy aka dog swimming foro the Kelpies. They seem to like swimming in a heated pool.
I see the liquid, efficient market is going it's thing.
Oh, those modern innovations are wonderful.
Guess I should not gripe today - am rather long.
I'm not sure I've seen that movie, Bud.
"Guess I should not gripe today"...perhaps we have come around to the truth of the matter after all :)
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