The remuneration of managers must be capped It is in our interest but also that of the RussiansAnd yet the dollar appreciates as a well rare4 in 2005 some economists saw a finish 35 hoursAll play today with the codes of the sportThis time a global cooperation is neededBerlin pushes the purchasewith des cleanvehiclesThe task is immense but the path is narrowStock markets are still in hue and to diaIt would have been easier to listen to usJust they returned they revert undesirable. The vendors discovered did not chance, this Thursday, October 9, in New York. Stock indexes were unscrewed strongly. With a slump of 7.33, the Dow Jones went to find this day is May 2003 levels. The reasons were not missing at such a rout. AIG, world insurance giant, already engulfed the loan of $ 85 billion granted by the US Federal Reserve. Morgan Stanley, still surviving Investment Bank, was struggling to find a partner to the Japan. General Motors has cash concerns.
That misfortune on the "blue chips" of Wall Street. That bad news concerning three of the 950 values which have benefited from an exceptional protection on the part of regulators against the attacks of the short sellers. Full of bad luck, these "outlaws", who have the impertinence to sell securities that they borrow with the objective of lower back and to accept value, were released the same day. Scapegoats are all found. They are used. During the great depression of 1929, they had already been denounced. And even as early as 1733 by the English in a previous speculation. This weekend, the American Banking Association called for the Securities & Exchange Commission (SEC), Constable of the stock market, to prevent new deal on the titles which had benefited from a shield for three weeks.
Yet, during this period of tranquility, the downward pressure was not loosened on these values. Their courses have even lost more than 20. That chain failures have fueled fear of other investors. The fault is in incumbent not to short sellers. But their winning return and caused alarm. Curious on the part of banks conducting also thus in their markets, "shortant" the course of their neighbouring rooms. Strange on the part of institutions which in recent years have increased by alternative and took management control of "hedge funds". Those that are dedicated to the same today. And who are likely to know the fate of these large investment banks, because they also denied actions today. The sale in the open part of their strategies. "hedge" means "cover" in the language of Shakespeare. For them, it is sufficient to sell securities of a company or a sector, or even a currency to cover positions that they purchase... Sometimes of banks. The problems of several months offered a great opportunity to cover downward.
But, lately, events rushed. And the courts began to drag more reason. Some investors, be they managers of "hedge funds", or banks, or even individuals, traders found nothing better than short sell securities that they did not have the intention to borrow prior. For the good and simple reason that they did not intend to continue on the subject. There were Legion of allersretours in "intraday", i.e. in the day. Consciously or unconsciously, they exploited a loophole in the regulation and blithely method of "naked short-selling."
The securities borrowed from institutions must be delivered within three days. The broker who does not practice loan-loan and that takes the order cannot afford to wait this time to place the order for his client on the market. If the idea came to him, it is certain that his client would see its competitor. And he further a commission. By reopening the gates, the SEC met a promise that within three days of the adoption of Paulson's plan, concerning the rescue of the US financial system, sales could resume. It has also relieved some sectors which, fragile, had to support the sales of "hedge funds" in need of coverage since September 19.
It has not done not more lightly because it has implemented statement of positions vendors device. Any "hedge fund" will have to report to the CST. For large, more than 100 million dollars of assets to the counter, they will be made public. In the spirit, it is not question of kill this business but of morality, to ensure that the seller borrows much titles prior. In France, the authority of des marchés financiers (AMF) proposed that there is a certificate from the lender. So small they are, these measures have bounded practice. If the investor exceeds the limits, it fraud. Woe to him! At the resumed session, the players were warned. And if this is not sufficient to reassure leaders of rated establishments, other measures could follow. The "uptick rule", dating from 1938, that the SEC was, with hindsight, inappropriately deleted on July 5, 2007, is back in the order of the day. It forces the investor to sell above the upward course of the last transaction. A true retarder. Market, the Nasdaq and the New York Stock Exchange, companies themselves have concocted proposals which they have expressed to the SEC, including to protect a value of the short sellers for the three days following a fall of 20 in a session.
Some evoke the possibility of playing with alternating current, i.e. the circuit, to curb the fervour. Such involvement of scholarships at the bedside of their users is. The vendor interest decreased by 13.4 in September, and was more 3.88 of positions shares at September 30. Especially, during the three weeks of abstinence, activity on Wall Street fell by a third party! Brokers, market companies see their interest in the maintenance of this market, just as more discrete, the traditional fund managers and institutions. And for good reason. Lend securities dealers for days reported a few subsidies allowing some to reduce the costs of management of their funds, 30 to 40 basis points. In addition, if it provides liquidity, selling would also virtues to reduce volatility in the markets and tighten the price ranges to purchase and sell securities. It does not kill a such hen to the egg of gold; He explained the rules of the game.
