MOChassid

The rambling thoughts of a Modern Orthodox Chassid (whatever that means). Contact me at emansouth @ aol.com

Friday, September 19, 2008

More From The Crisis

1. It strikes me that we are about to witness the law of unintended consequences kick in in a major way. The SEC's outright ban on short selling financial stocks is a perfect example of regulators giving in to political pressure without thinking through the consequences. The details are technical and complex, but, trust me, it's going to get weird out there.

2. I subscribe to something called the Daily Bankruptcy Report produced by Dow Jones. It's a serious trade rag that follows the distressed market for loans and securities. Today they have a piece with the headline, "Chelsea Clinton Attends Lehman Hearing". It's good to know that my firm is shelling out about $4,500 a year so that I can read an article that belongs in the Daily News.

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11 Comments:

  • At 9:31 AM, Blogger nyfunnyman said…

    yes, the ban on short selling is perplexing. it is clear that short sellers are just noticing deficiencies within companies, and those deficiencies are the cause of the downturn. furthermore, say a huge fund, such as Avenue Partners (once we're speaking about chelsea) has to disclose (as the SEC now wants to require hedge funds to disclose short selling) their short positions- wouldn't this aggravate the loss of confidence in the industry more?? am i crazy?

     
  • At 10:29 AM, Blogger ThePeoplesChamp said…

    I agree. Did Lehman go down because people (or rather large institutions) were shorting their stock, or because their stock was worthless paper because bad decision makers put the company in a perilous position with bad debt?

     
  • At 11:52 AM, Blogger Ezzie said…

    I don't understand how they can force the hedge funds to disclose the short positions anyway, assuming they're not registered. And if they are registered, watch how fast they de-register.

     
  • At 8:48 PM, Blogger Jordan said…

    I think the short selling ban is meant to be temporary. Does that play into whether you think it is a good idea? Some of my banker friends think it is good as long as it is only for thirty days, just to give companies a chance to get their house in order and determine what steps they need to take to remain solvent.
    Poorly run companies, or companies with a lot of poor positions don't have an inherent right to continue, but that does not mean that the current instability is a good thing for the individuals involved, as opposed to the macro economic view. Thoughts?

     
  • At 10:31 PM, Blogger MoChassid said…

    Jordan

    There are a few things wrong with the short sell ban. You are telling the market that you can invest as long as you have a positive view of the market. (By the way, I don't have a big problem with restricteing naked shorting).

    But the bigger problem is technical. People short for all types of reasons. They short to hedge long positions, for example. Shorting is a fundamental part of the convertible bond and equity derivatives business.

    None of the implications have been thought out.

    (In fact, I understand that the SEC and mumchim in the market are working all weekend to reign in the rule and make it workable).

     
  • At 3:26 AM, Blogger rebecca said…

    The Tide Rises, the tide Falls

    The tide rises, the tide falls,

    The twilight darkens, the curlew calls;

    Along the sea-sands damp and brown

    The traveller hastens toward the town,

    And the tide rises, the tide falls.

     

    Darkness settles on roofs and walls,

    But the sea, the sea in the darkness calls;

    the little waves, with their soft, white hands,

    Efface the footprints in the sands,

    And the tide rises, the tide falls.

     

    The morning breaks; the steeds in their stalls

    Stamp and neigh, as the hostler calls;

    The day returns, but nevermore

    Returns the traveller to the shore,

    And the tide rises, the tide falls.

    -------by runescape gold

     
  • At 12:28 PM, Blogger Jewboy said…

    Quite a doozy we got going in fantasy football, huh?

     
  • At 5:33 PM, Blogger MoChassid said…

    Jewboy

    If David Harris shows up, I should win. So far this year, he hasn't.

     
  • At 6:06 PM, Blogger Jewboy said…

    I guess time will tell. If only I'd started Santana Moss and/or Maurice Jones-Drew, I'd be in good shape.

     
  • At 8:31 PM, Blogger MoChassid said…

    JB

    It's always about if only...

    If only I'd started Marvin Harrison instead of Tory Holt, or Carson Palmer instead of Aaron Rodgers. etc.

    There's no looking back.

     
  • At 10:29 PM, Blogger Jewboy said…

    True, but I'm new to fantasy football. Good matchup, it came down to a Jets linebacker, of all people.

     

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