tag:blogger.com,1999:blog-4490468598422095060.post7768726690389972028..comments2024-03-17T07:55:12.096-07:00Comments on FOFOA: Paulson's Fundamental FlawsFOFOAhttp://www.blogger.com/profile/17152544684132776239noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-4490468598422095060.post-54227278971284065902009-10-23T09:43:05.582-07:002009-10-23T09:43:05.582-07:00Naked short sellers are the real problem. They nev...Naked short sellers are the real problem. They never borrow an owned share. They create shares the same way the FED creates dollars. The real struggle is that they are not policed and they can crush companies with the aid of the brokerages.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-46497875570304369392009-08-12T01:35:28.928-07:002009-08-12T01:35:28.928-07:00Martijn,
Armstrong seems to agree with me. This ...Martijn,<br /><br />Armstrong seems to agree with me. <a href="http://1.bp.blogspot.com/_cvdgPlEKW9k/SoJ-Wcl3AAI/AAAAAAAAAnc/m5Whw1uLTo4/s1600-h/Shorts.JPG" rel="nofollow">This</a> is from his latest.<br /><br />FOFOAFOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-88706342884544547872009-07-14T12:59:10.464-07:002009-07-14T12:59:10.464-07:00Short sellers do indeed influence the market.
If ...Short sellers do indeed influence the market.<br /><br />If they believe it too high, they initiate downward movement by shorting. And yes, they usually set goals, and apply the breaks once the train arrives at their set destination.<br />Also, if it turns out to be heading in the wrong direction they do indeed jump off, thereby accelerating it.<br />Shorting allows market participants to make orMartijnhttps://www.blogger.com/profile/10691085642452851905noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-36310006293538286312009-07-14T11:43:54.301-07:002009-07-14T11:43:54.301-07:00Why does a short seller "cover" when it ...Why does a short seller "cover" when it turns out he was wrong and the price rises? Doesn't this limit his profits too? Actually, it kills them. But still, he must cover because he must deliver. This is the same in a downward move. He must deliver what he has sold short. So he must buy ON THE WAY DOWN. Time is a function in here. The time in which he is legally allowed not FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-27882538192695046522009-07-14T08:27:30.138-07:002009-07-14T08:27:30.138-07:00I don't buy this reasoning.
A short seller se...I don't buy this reasoning.<br /><br />A short seller sells a stock, expecting the price to go down. When it drops sufficiently, he will buy it back.<br /><br />However, if it is dropping fast and no sight of a bottom is there, why buy it? Why buy a stock that will decline more (and as it declines improves your profits)?<br /><br />Perhaps short selling does moderate markets a bit, but it Martijnhttps://www.blogger.com/profile/10691085642452851905noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-60871169508660489662008-09-21T05:49:00.000-07:002008-09-21T05:49:00.000-07:00One reason I call manipulation a form of price con...One reason I call manipulation a form of price control is that it's producing the very consequences that arise when price controls are invoked: frozen markets, shortages, price disconnects, black markets. Frozen markets can be seen in lending and housing; shortages, price disconnects and emerging "black markets" (ex-COMEX, eBay) can be seen in precious metals.<BR/><BR/>And I totally agree with Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-90523512859662191602008-09-20T19:55:00.000-07:002008-09-20T19:55:00.000-07:00Dave,You are absolutely right that price controls ...Dave,<BR/><BR/>You are absolutely right that price controls are always bad. If prices are not set by the marketplace based on supply and demand, then problems always arise. Shortages happen if the price is held too low and markets freeze up if the prices are too high as can be seen today in the housing market.<BR/><BR/>But I think it is more of a price distortion than a price control. The Fed FOFOAhttps://www.blogger.com/profile/17152544684132776239noreply@blogger.comtag:blogger.com,1999:blog-4490468598422095060.post-58000499762567355782008-09-20T16:13:00.000-07:002008-09-20T16:13:00.000-07:00Very good points, especially the analogy about the...Very good points, especially the analogy about the insects. Of course, banning short selling is a specific case of more general market manipulation, which is endemic today. In effect, all this market manipulation constitutes a form of price control, and that's never a good thing.Anonymousnoreply@blogger.com