Reply to: Shorting ban sends bank shares soaring

[aceboy]

Another interesting article: http://www.bbc.co.uk/blogs/thereporters/robertpeston/

They are surging in part because of the FSA's crackdown on short-sellers but mostly because of the overnight news that the US Treasury Secretary, Hank Paulson, and the Chairman of the Federal Reserve, Ben Bernanke, are preparing a bold - or possibly impetuous - plan to tackle what can now be classified as the most severe and intractable malfunction of the banking system since the late 1920's.

The drying-up of liquidity from money-market funds is in part what drove HBOS to acknowledge that the game was up, and that a rescue takeover by Lloyds TSB was the best form of protection for its savers and shareholders.

[Peoplesoft bloke]

Gordon is a tosspot.

Wow that's radical - most posters on here seem to have formed a cosy back slapping consensus that he's a genius

[AtW]

Well that is certainly true - it is a side show really.

Yes it's a side show, basically punting - it has no effect on the market, I don't really care about that (so long as insiders don't abuse it) - volumes are low too.

[KentPhilip]

The market's back up 8%?

Gordon has saved us! Hooray for the Son of Manse!

Gordon is a tosspot.

[KentPhilip]

It's not the same at all. The profits/losses might be the same (unlikely as spread betting involves leverage where as shorting may not involve it), but in terms of effect on the market spread betting is a side activity. You might as well think that spread betting on football match affects its outcome - not unless some insiders are betting and going to rig the result.

Well that is certainly true - it is a side show really.

But then what is to stop the big shorters like that bloke the Daily Mirror had a go at yesterday setting up their own "spreadbet firms" and go for gold.

[stackpole]

The market's back up 8%?

Gordon has saved us! Hooray for the Son of Manse!

[aceboy]

The interesting thing about the whole Ban is that it is only in 29 ftse100 listed companies, and does not apply to market makers...

http://www.bloomberg.com/apps/news?p...9cjWk&refer=uk

Edit: also you do not have to close out existing short positions, so the market jump today may not be as a result of this ban

[ThomasSoerensen]

Like the avatar BTW.

Should casino's offer new roullette maybe? Just with a big "1" in the middle with odds 1/1 - 1 ?

AtW - tsk tsk

[aceboy]

This doesn't make sense to me - what advantage would there be to anyone in defaulting on their mortgage?

Well as it can to take upto 3 years to settle the dispute, you live somewhere for 3 years with out paying anything then move on....

I didn't go into the full ins and outs as we didnt have time, but I bet it would bugger your credit rating....

[AtW]

er yes it is either exactly the same or very similar.

It's not the same at all. The profits/losses might be the same (unlikely as spread betting involves leverage where as shorting may not involve it), but in terms of effect on the market spread betting is a side activity. You might as well think that spread betting on football match affects its outcome - not unless some insiders are betting and going to rig the result.

[ace00]

FTSE 100 .FTSE 5,275.00* +395.00 (8.09%)

It's all better now. Nothing to see here. Move on.

[KentPhilip]

It's not the same, but it is indeed very different operation from shorting - that involves selling shares which may affect market, where as spread betting doesn't. I suppose I'll let you off this one.

er yes it is either exactly the same or very similar. If you short a stock and it goes down in price you make a profit. If lots of people do this then it moves market prices. That's the whole idea of markets and price movements.

Spreadbetting does not involve selling of physical stock but you can be sure that the spreadbetting firms will nett off their exposure on the markets themselves so the effect on the markets is the same or very similar.

[KentPhilip]

So all the market's woes are due to short sellers and nothing to do with lending people 125% of over-valued houses to people who can't pay it back?


Somebody needs kicking and it isn't the shorters.

Exactly.

[bobhope]

So all the market's woes are due to short sellers and nothing to do with lending people 125% of over-valued houses to people who can't pay it back?


Somebody needs kicking and it isn't the shorters.

[Peoplesoft bloke]

Do any of you lot know what you are talking about?

No, but I never claimed to.