Yesterday I called DC "The Swamp". This simple metaphor is really a long term allegory of corruption and greed in DC that sucks up money and doles out crumbs, while claiming through their propaganda machines to solve all the problems of humanity. Little or nothing really gets done in The Swamp and no problem is ever solved. But the lawmakers, bureaucrats,lawyers and lobbyists get their skim. Here is an example of how such "issues" can easily be solved.
Short Selling
I. Naked Short Selling
There is obvious fraud in selling short stock not actually borrowed, aka "naked short selling". Yet this still occurs, albeit at lower levels. Buyers have to deliver cash on time, so why do some short sellers not have to deliver stock ? Why is this STILL an issue and STILL not solved ? Corruption and greed by the SEC and the Street.
Here is the two-fold answer: (A) a mandatory, no exceptions, instant buy-in for ANY short sale not delivered on time, (B) an automatic fine equal to the great of 2% or the profit on the short sale, and (C) a prohibition on such entity from further short selling for 90 days. No exceptions means simply no exceptions for market makers, ETFs, or anyone. Fraud is simply fraud and must be punished. Naked short selling would disappear overnight with this simply rule.
2. Uptick Rule
In case the SEC has forgotten, the raison d'être of the public securities markets is for investors to be able to buy and sell their investments. It's not designed for traders. So when news comes out that is negative, who should be at the head of the line for selling ? The owners - the investors. What is a reasonable fluctuation range for a stock in the absence of news ? Maybe 2% ? or 3% ? That's a lot - $3 on a $100 stock. Or use a sliding percentage scale based on the price level.
Prohibit ANY short selling, whether by market makers or ETFs or anyone, whether in stocks or any derivatives, when a stock has declined by 3% on a day from its prior day closing price. PERIOD. Big price drops will occur, when the owners sell madly on news. But they won't occur from bear raids.
Smart short sellers will make money be shorting BEFORE the news. Raiders and computer short sellers will be eviscerated.
OK, that solves the issues of short selling permanently. Those in DC who are not part of the solutions are part of the problem.
An Observation
Why is Australia able to fund a superb national broadband program but the US is not ?
BBC: "The Australian government has announced a massive project to extend broadband Internet systems across the country. ... "the government to choose instead the more ambitious fibre-to-the-home network offering 100 megabits per second, accessible by 90% of Australian homes. " The cost is A$43 over eight years.
Hello Barack ? Why isn't YOUR stimulus plan doing this ?
Word of the Day
"Confute" - verb, transitive [$10]; from the card file
Confute means 1. prove (a person)to be in error; 2. prove (an argument) to be false.
Sentence: Can anyone confute my assertion that a naked short sale is a fraud ? Why is this still an issue ? Answer: the SEC is part of the Swamp.
Le Mot du Jour
"Prêter" - verb, regular -er conjugation
Prêter means (transitive) to lend, to attribute; (VT indirect with à) to be open to.
La Phrase: L'homme du bunker prête toujours à nouvelles idées, mais y adopte avec modération.
Sentence: Bunkerman is always open to new ideas, but adopts them sparingly.
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67 comments:
Bunk...do you see hyperinflation down the road?
No, when growth and demand resume, the Fed can quickly pull out the quantitative easing. They aren't acutally "printing" the money. It's in electronic form in the monetary base. Hence easily removeable, unlike hyperinflations.
And banks will have to build reserves in good times, so lending will not grow exponentially.
Actually, with all the talk of a new "reserve currency" I wonder where world monetary growth can / will come from ?
This is a thought I've been working on for awhile.
In the past it caem from the US current account deficit - sending dollars to foreign central banks to be a reserve base for their own money supply.
No dollar export means world reserves are stagnant.
Noodling over this ...
no short selling if a stock is down over 3% ??? huh ???
i better start lookin for a job if that ever become law
does cc sabathia have the best power slider in the major leagues ??
i think so
LET'S GO YANKEES !!!!!!!!
does mark tejeira have power to all fields ?? i think so
LET'S GO YANKEES !!!!!
is derek jeter the best shortstop in the major leagues ?? i think so
LET'S GO YANKEES !!!!!!
A-fraud ! A-fraud !.....come out come out wherever you are.....you lil bitch........A-fraud's a faggot and she's afraid to face the crowds
'i'm injured'
pfffffffffffffffffffffffffffffft
metropolitans ........johann.. jj .. Krod
it's a winner!!!.........good night and drive safely
'uptick rule'
is the Bman f'ng serious ??? todays blog may be the best........the best in nonsense.......ridiculous
The old uptick rule was fine, but with today's fragmented, electronic markets, I'm not sure it can be implemented.
A sliding scale starting at 10% for low priced stocks to 2% for $00 stocks is OK, but complex.
Heck, I wouldn't care if a complete exemption existed for individuals shorting less that 10,000 shares, as long at a complete ban was in place for hedge funds and intitutions.
The public is being driven from the markets and that's very bad.
Reuters.com reports U.S. securities regulators will consider about 4 proposals to restrict short selling, a type of investing blamed for accelerating the severe downturn in financial services stocks. Proposals the SEC will consider at its Wednesday meeting include the restoration of the "uptick rule," which allowed short sales -- a bet that a stock's price will fall -- only when the last sale price was higher than the previous price, the chief of the SEC said. "We are going to put forward about four different proposals, and one of them does include the original (uptick rule)," SEC Chairwoman Mary Schapiro told reporters. "There are different modified versions because the markets have changed a lot, even since 2007." Schapiro said other proposals on the table include a so-called "bid test" and a "circuit breaker." One source familiar with the matter said the SEC bid test proposal would only allow shorting at a price above the highest available bid. The SEC also is crafting two circuit breaker proposals: One would temporarily halt short sales of a stock if the stock has already fallen by a certain percentage, the source said. The other would trigger the application of an uptick rule or bid test after the price of a stock experienced a decline by a certain percentage, such as 10%, the source said.
This SEC effor tis just part of what's necessary to stop raiding. Credit default swaps have to be banned unless one actually owns the bond or debt.
Local papers in the NY area are purely comical...one guy actually calling for Girardi to be fired already...lmaooooo....its one game guy....
Bunky...good stuff this morning...we need the lost generation back in the game and the rules must be fair to get them back...aazzhead is so narrow minded, buy some puts you putz.
Yes, without the public, there can be no bull market ever.
I thought we are currently in a bull market?
lolol
are you as binary as "the golfer" ?
Does Lloyd Blankfein read this blog?
"Goldman Sachs has pledged to change the way it does business going forward"
lmaoooooooooo
lol Bunkerman....
this guy Blankfein is some salesman...
"Hey pal I was born at night, but not last night"
Bunky, have you followed the Baltic freight index down 19 days in a row, 55%...oil can't hold the 50 handle and natty flat on it's back like a drunk Mav prom date...lil worried about some of these data points...are we taking a lil more sugar sir.
im wondering where the $ goes when china decides there is no way in hell we can ever pay them back?
one of these days they will figure out they dont need to borrow money from us, so we can sell cars to americans who already have 1 or 2 in every driveway. eventually they will care more about building and selling cars in china, where almost nobody has one.
USA standard of living is too high, and must come down, a lot.
we have been sucking off the tits the world. the milk is about out.
its not south park where u can just put this debt on a discover card and then start shopping again.
although they actually make a decent point. the cure is to get credit flowing again, but loose credit created this mess in the first place. and the demographics here look like japan in 89. with 1 small exception.
the usa is graduating what, 50%, from friggin HS? the people who get most of this debt, prefer meth to math.
there can't be any bull market without beefers......end of story.....period........you can take that to the bank jack
and there also won't be any bull market without shorts
Bman wants to 'control' prices.......bulgarian style
'selling cars in china'
lmaoooooooooooooooooooooooooooo
85% of the chinese population are peasents......they eat dirt......make about $2 a week
ya..........chinese domestic buying power is huge
PS......china better hope we come out of this recession ..........or they gonna go into a depression
ummmm.............i believe the world has ben sucking the milk out of our tits
the massive US consumer market has created jobs all over the world..........those days are over
Bud the USA is in a recession?
I have taken the sugar and await a dip now.
I expect Baltic index to drop until China iron ore deal is announced.
Oil around 50 sure beat oil under 40
Natty needs weather. It's been oversupplied for a couple years.
u r almost there bud.
the chins will go from making 2 bucks a week to 200.
and americans will go from making 2 grand a week to a grand or something like that.
but there wont be any deflation, except in long dated assets (ie stocks, bonds, and real estate), in the USA.
Cockfighting ring busted in North Philadelphia.
what a great place to raise a family! lol
uh mern ... let China spend its dollars here to buy stuff.
so they wud rather make us rich and keep themselves poor?
Look, it's simple. A dollar gives one the give to buy something for a dollar.
When the bonds mature, the US gives them dollars.
They can spend them, or convert them or reinvest them. That's all.
and China IS poor already. they need to spend those $ to buy things for their people.
Did you never hear the King Midas story, mern ?
man you coloreds on this blog are a negative lot.
After the financial market collapsed last fall, the Fed responded with a massive injection of liquidity and expansion of the monetary base.
Eventually, Ben Bernanke & Co. will face the challenge of having to remove that liquidity from the system. "That's a big and difficult task and probably the authorities will not be able to do it well," says legendary financier George Soros, chairman of Soros Fund Management. "That's the fear that drives people into gold."
Soros wouldn't say whether he's actively trading gold but certainly implied it's a good bet; more explicitly, he agreed with the view there's a "bubble" in Treasuries that's likely to burst sooner rather than later.
"The moment this fear of deflation turns into a fear of inflation, you'll find interest rates rise in the long end which is going to choke off the recovery," he says. "If we are successful [in reviving the economy] we are heading from the prospect of deflation to stagflation."
like gross he is talking his book, but stag implies weak growth. what if there is just a long contraction, but his flation thesis is right?
i dont know. im bald,umemployed azzhead and graduated with a solid 2.0 from dayton.
"im bald,umemployed azzhead and graduated with a solid 2.0 from dayton."
lmaooo costanza indeed
http://www.israelnationalnews.com/Radio/Player.htm#0%23776
this is a tangible explanation and it makes sense.
one of your fellow harvard allums i went to hs with, sent this to me via facebook.
king midas seems not relevant to this quaqmire.
maybe to bayan, but to not the chins.
"y dont the call it roundtine?"
lol
and no, Dr. leo, it wasnt luzak. this guy got an 800 (math portion) on his sats in the 7th grade.
now he gets more ass than a car seat!
stop pushin that jew rag on us mern
Gosh, all those Treasuries have helped Japan a lot. They'd be better off spending it on their people.
And China .. that currency would be worth ZERO without those Treasuries to back it up.
Look at the Ruble after the commies fell.
The Midas story fits - money is what it can be spent on or used for. Piled up it's worthless.
ECB is going to hurt Europe for a decade if they don't wise up and get off the 1923 bugaboo.
whats jew rag? something bud gets when he hangs with doozio, in south beach?
sounds itchy
Karahci exchange up 44% ytd...more proof that short sales should be outlawed and financial ruin a myth of the lazy american colords...silk turbans for all.
sorry mern justa pitch....check swing....Ball!!!!!..good eye
Bunkerman what would turn you bearish at this point sir? Can Meredith make you see her way is the best way to invest?
florida bush leauges...hurt them bad I know...I'll call of the dogs....sorry.
Bud you'll love this:
guy just called Mike Francesa and called CC Sabathia a bust...he can't handle the pressure...he's out of shape...his fastball has lost something....
LMAOOOOOOOOOOOOOO
listen bob
have you made me laugh in the past......yes........on occassion you are mildly amusing.....but today is not one of those days
you are a disgusting pig......you make me puke
"Bunkerman ... Can Meredith make you see her way is the best way to invest?"
not even if she gave me a ...
oops ;)
cc sabathia 2009 season
6-12 4.7 era
4,234 burritoes
2,345 hot dogs
Hiiiiiyyyyyyyyyooooooooooo
Lookouttt Mrs B!!!!!!..lool
A trade war
or a real war like China v. Taiwan; or N.Korea v. S. Korea+Japan+US
Acceleration of Obama tax increases to this year.
Otherwise, I'm bullish.
I see the cup full !
An optimist in the free person's natural desire to better his life.
that means 3%+ growth, btw.
the above are re turning me bearish.
lmaooooo Bunky.....well played sir...
but I have a feeling Meredith could change your thesis with some of her best "work"
"you are a disgusting pig......you make me puke"...LMOOOO...nonono that was not me...buying EJ day high made you puke....thanks jim.
Goldman Sachs CEO calls for new pay standards
Goldman Sachs CEO Lloyd Blankfein calls for new Wall St. pay standards, hedge fund oversight
insert bunchline.........
hmmm
"Goldman Sachs CEO Lloyd Blankfein" must read this blog !!!!
that was Bud's thesis for his $200 GS price target...the kinder gentler beefer...they will lead us to the promised land...up and down greenside desert indeed.
Uh ... Bud's thesis for $200 GS was the chart, by his own admission.
Cutting pay of the top would help the Street and many other firms.
That IS one of my bull market theses.
Bud...call off your daddy.
a good season coming indeed...Bunky swinging like kingkongkingman...not even his pitch...off to ice the arm.
Bunkerman if you really think Blankfein is being honest...well then....well...you know...
Bunkerman if you really think Blankfein is being honest...well then....well...you know...
are you kidding me ?? today one of the Bman's all time worst performances in the blog
'ban short selling' 'uptick rule' 'SEC in the pockets'......blah blah blah blah blah blah....
l'homme de bunker ?? more like
l'homo de bunker
of course he's being honest .. he wants to cut the pay of all those working for him so his stock is worth more.
typical CEO.
oh wait.....i misunderstood frosty's post
ummm......well..........what else is new
bob can you speak f'ng normal english !!!!!!!!!!!!
"Look for the bulls to try to continue the streak of late-day saves"....what a lock on the tape...thanks jim.
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