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Old 07-29-2008, 02:15 PM   #61
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I don't have to speak to anyone. I know what your all about by your posts.

I'm sure we both have names for each other.

First off, I believe the word or contraction you're looking for is you're, not your.
As to what I'm about, you haven't a clue. You call me an annuity salesman because your buddy does. I am quite diverse and nowhere in here had I mentioned annuities until you decided to use it as some big insult against me, which is ridiculous. I can support absolutely anything and everything I use. I'm not concerned that today annuities are going to be forced to cover their positions. Any guesses why bank stocks have been rising rapidly lately? Take a guess, just one.
To be honest, I'm a bit surprised that a administrator hasn't warned you to stay on topic here.
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Old 07-29-2008, 02:17 PM   #62
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I agree that naked shorting shouldn't be allowed.

The uptick rule is a separate issue, though. I don't see any real reason that you should be required to wait until the price goes up a little to short a stock. Do we require people to wait for the price to go down a little to buy it?
You make a valid point, but it's in place to prevent someone from taking advantage of a free fall. It was removed to assist those hedge funds looking to short the market. There was absolutely no real reason to remove it.
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Old 07-29-2008, 02:19 PM   #63
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I really wouldn't care about hedge funds if it were possible for them to stay in their hedge-fund sandbox.
It's not that simple. They don't have their own sandbox, they affect the entire market. Picture food costs rising rapidly because the owner of a restaurant has help in the kitchen eating all the profits.
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Old 07-30-2008, 07:52 AM   #64
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To be honest, I'm a bit surprised that a administrator hasn't warned you to stay on topic here.
Speaking of marmots, where's a pancake when you need one? We've got our hands full keeping ourselves on topic, let alone the rest of the community.
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Old 07-30-2008, 08:57 AM   #65
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Speaking of marmots, where's a pancake when you need one? We've got our hands full keeping ourselves on topic, let alone the rest of the community.
No thread drift here,someone strapped a 300hp outboard on this thread...........
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Old 07-30-2008, 11:10 AM   #66
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Here ya' go. Maybe you don't believe me or Cramer....

WASHINGTON (Dow Jones)--Emergency restrictions on short-sales in 17 Wall Street firms and housing-finance giants Fannie Mae (FNM) and Freddie Mac (FRE), due to expire just before midnight Tuesday, have been extended through August 12, the Securities and Exchange Commission announced.
The SEC said the additional 10-day extension will give its staff time to collect and analyze data on the impact and effect of the order. It said it would move "immediately" afterward to consider rules imposing short-sale restrictions on the broader market.
The SEC issued the emergency order on July 15, citing concerns that rumor-mongering could spark "sudden and excessive fluctuations" in stock prices and disrupt the fair and orderly functioning of U.S. markets.
The SEC said once the order expires on August 12, it "will not be further extended."
If regulators want to continue the short-selling restrictions for the stocks, they would need to do so through rulemaking. The lengthy federal rulemaking process could be accelerated by issuing interim final rules that are effective immediately but still subject to public comment and possible revisions in the future.
Expanding the restrictions to other stocks could be next.
"That would be a natural follow-on to the emergency action that the commission has already taken," SEC Chairman Christopher Cox told reporters after a press conference at the Labor Department on Tuesday.
According to Cox, "the general approach that the commission will take is to commence notice and comment rulemaking at the earliest possible time to ensure that appropriate protections against illegitimate naked short selling apply generally across the entire market."
The SEC emergency order, which took effect Monday, July 21, applies to Fannie Mae, Freddie Mac, and to 17 publicly-traded Wall Street firms that are primary dealers in U.S. Treasury securities. All 19 firms covered by the order have been given access to borrowing from the Federal Reserve, once reserved for commercial banks.
The order requires short-sellers to pre-borrow shares before engaging in short sales of the targeted companies, which Cox has said is aimed at abusive "naked" short sales. In a last-minute change, announced July 18, the SEC excluded market makers in the stocks from the pre-borrowing requirement.
Short sellers sell borrowed shares in hopes of replacing the shares later at a lower price. The practice is legal and produces profits when stock prices decline. "Naked" short sellers don't borrow shares in advance of short sales, and may never intend to borrow them, which can have punishing effects on a stock's price. While the SEC has tightened rules in recent years to curb naked short selling, it hasn't previously insisted that shares be borrowed before they are sold short.
Cox said the SEC is looking forward to analyzing data on the effect of the temporary restrictions, and has heard that all of its recent actions have "helped to control illegitimate rumor-mongering and other techniques of market manipulation."
In addition to Fannie Mae and Freddie Mac, the stocks covered by the order are: BNP Paribas Securities Corp. (BNPQF, BNPQY), Bank of America Corp. (BAC), Barclays PLC (BCS), Citigroup Inc. (C), Credit Suisse Group (CS), Daiwa Securities Group, Inc. (DSECY), Deutsche Bank Group (DB), Allianz SE (AZ), Goldman Sachs Group Inc. (GS), Lehman Brothers Holdings Inc. (LEH), Merrill Lynch & Co. (MER), Morgan Stanley (MS), Royal Bank ADS (RBS), HSBC Holdings PLC (HBC), JPMorganChase & Co. (JPM), Mizuho Financial Inc., (MFG), and UBS AG (UBS).
-By Judith Burns, Dow Jones Newswires, 202-862-6692; Judith.Burns@dowjones.com
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Old 07-30-2008, 12:11 PM   #67
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Hey Art...

I don't care if you are an annuity salesman as long as you are not trying to sell like a lot of the ones that come and go...

As for hedge funds... you are only taking a look at one side of the equation. There were many hedge funds that went under due to the sub prime mess.... they lost billions...

Some hedge funds might be doing some things that are 'not right', but may be doing it legally... I would suspect that most are doing what is right and legal... if they are trading illegally, then they should be prosecuted and sent to jail...

Hedge funds do have thier place.... they help determine the 'right price' for an asset at a particular place and time... they look for the small price differences (futures vs current or dollar vs yen vs euro)... they exploit this price difference until it goes away, making money doing that...

Heck, if you can do it you would....
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Old 07-30-2008, 12:14 PM   #68
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Texas Proud, I think what Art G is saying is not that they what they are doing is illegal, it is that what they are doing SHOULD be and WAS illegal until the uptick rule was eliminated and the naked shorts (should be illegal, according to Art G). He is not arguing based off of the legality of what they are presently doing. Please correct me if I am wrong, though, do not want to misrepresent you.
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Old 07-30-2008, 12:53 PM   #69
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Here's the problem, the people in power have made it possible for these mega hedge funds to have special rules that were not intended for the general public. If Senators and Congressmen can make 50% by altering a rule then the powers that be have made it possible to, in reality, steal from the public. If you note, they are only looking to fix the rule for banks. Now, why would that be? Could it be because they don't want to kill the golden goose, they merely want to give the appearance of correcting situations that have gotten way out of hand.
I'm not saying all hedge funds are evil. I'm saying the rules for hedge funds, the large capital that they control, and the controlling people who are involved with them have allowed it to alter the market. For those of you thinking it doesn't affect you, you're mistaken.
Citric, what they are doing IS illegal. It's just that it is being allowed to happen anyway. They are trying to enact a rule that is already in place. However, they are only trying to enact it on to what is most visible.
Texas Proud, hedge funds don't determine the right price, the market itself is supposed to do that. Someone coming in with a big stick and beating a stock into submission is not helping things.
I can keep giving metaphors if you'd like, but it seems pointless.
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Old 07-30-2008, 04:02 PM   #70
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Let's give a good example of the issue... and the potential pitfalls..

Though this was not a hedge fund, IIRC the Hunt family decided to corner the market on silver... the price skyrocketed to an unbelievable price... heck, my brother was selling anything he could find to make some money..

But, this could not go on forever and the price spike was corrected and silver came back down to it's 'real' price... and the Hunt's got clobbered...


So I can see where a hedge fund can affect the price with short sales (naked or clothed ) in the short run, but the fundamentals of the company will win out in the long run. And if the fundamentals are BAD, well, then they are right are they not? And why should they not be able to make money on a company that is way overpriced?
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Old 07-30-2008, 04:13 PM   #71
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What a lame excuse for a thread:
Inane proposition put forward with no supporting details or evidence. What should be done to fix the alleged problem? Discuss.....
No thanks. I have better things to do with my time.
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Old 07-31-2008, 09:21 AM   #72
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Let's give a good example of the issue... and the potential pitfalls..

Though this was not a hedge fund, IIRC the Hunt family decided to corner the market on silver... the price skyrocketed to an unbelievable price... heck, my brother was selling anything he could find to make some money..

But, this could not go on forever and the price spike was corrected and silver came back down to it's 'real' price... and the Hunt's got clobbered...


So I can see where a hedge fund can affect the price with short sales (naked or clothed ) in the short run, but the fundamentals of the company will win out in the long run. And if the fundamentals are BAD, well, then they are right are they not? And why should they not be able to make money on a company that is way overpriced?
Here's a difference. If no rules are in place requiring those hedge funds to EVER cover their position, then it's like playing in a poker game with someone who can just print their own money. The same thing is going on in penny stock investing and the SEC is all over warning people of the pitfalls. CEO's just printing shares hilly nilly. The difference is that huge hedge funds are doing the same with legitimate companies. Perception becomes reality if you keep shorting down the price of the stock.
To be honest, I would have expected this group of savvy investors to take this thread in a whole different direction. Where there should be outrage, there seems to be acceptance. It's like Global warming I guess, "what the heck can I do about it?" Or the dying of the coral reefs. I guess we've come to accept that if we're lucky, we can get a very tiny piece of that pie?
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Old 07-31-2008, 09:23 AM   #73
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What a lame excuse for a thread:
Inane proposition put forward with no supporting details or evidence. What should be done to fix the alleged problem? Discuss.....
No thanks. I have better things to do with my time.

LOL! Well thank you very much for playing! Gotta love the guy with nothing to add, other than to waste his time to tell us he doesn't plan to waste his time! Imagine how much time you would have saved if you hadn't turned on the computer today! You could have had another donut!
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Old 07-31-2008, 11:50 AM   #74
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ArtG, I understand very well what you are talking about. Note that I wrote "if it were possible". It's not possible, and these toxic, unregulated entities and instruments will remain out there until they all blow up, every one of them, OR market regulators rein them in somehow. There is no will for the latter so they will stay out there.
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Old 08-01-2008, 11:57 AM   #75
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It would be really nice if any ex-hedge fund employees on board could enlighten us to what really goes on.
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Old 08-01-2008, 02:40 PM   #76
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that's sarcasm, right?
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Old 08-03-2008, 04:22 PM   #77
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Just came across this short 2-part BBC presentation on credit default swaps:

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Old 08-04-2008, 12:48 AM   #78
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The MBA president says right out: Wall Street should "not try to do all these fancy financial instruments"!
The creation of complex financial markets has brought about economic progress. These sophisticated instruments, like derivatives, have facilitated risk-sharing on a global scale, boosting innovation and hence prosperity. There is no economic rationale for distinguishing this “virtual capitalism” from “real capitalism”: nothing real has ever been produced without first being financed. The new instruments aren’t free of problems, as seen in the subprime failure. Financial enterprises are enterprises like any other—they think up new ideas, try them out, and sometimes crash. But even in a time of financial crisis, the global benefits of the new financial markets have surpassed their costs. The debate among economists today concerns only the degree of transparency and regulation necessary for their effective functioning.

Economics Does Not Lie by Guy Sorman, City Journal Summer 2008
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Old 08-04-2008, 04:45 AM   #79
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nothing real has ever been produced without first being financed.
excuse me?
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Old 08-04-2008, 09:34 AM   #80
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Many years ago, a man I consider the smartest I've ever met regarding financial matters (and more) told me that whatever I do, stay away from derivative products. This was good advice then, better now.
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