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For anyone out their holding energy and mining stocks I think this is a must read:
http://jessescrossroadscafe.blogspot...-new-york.html
Note: the original source for the info is a Financial Times piece linked in the article.
My favourite part: "Its like setting a fire in a crowded theatre after having charged high admission prices for a musical production that did not exist, and then having thugs at all the exits to charge even stiffer fees to leave the building."
Some key quotes:
According to this report Goldman Sachs is disclosing the most largely held positions of some hedge funds and distributing the list to others with the objective of fomenting a group effort in shorting them, artificially driving down the price, creating more forced redemptions and losses for the fund investors.
Can you imagine if some other company was doing that? With the financial stocks?
Think the elimination of the uptick rule and the widespread toleration of naked shorting is an accident?
The second point of interest is the targeting of specific sectors such as emerging markets, mining, and energy stocks.
What this will accomplish, beside the obvious short term racketeering, is to exaggerate the downward move in some prior favorites, setting up some potentially lucrative short covering rallies when the stocks reach ridiculous valuations on the forced selling and targeted shorting, after the trading banks cover their shorts and buy in for pennies on the dollar.
And don't think for a minute that Goldman and their ilk does not have a 'most shorted' list that it is circulating around to its own select group of traders to target those buys.
We still wonder if some of the Wall Street banks are using their privileged information to short squeeze the European banks who they loaded up with fraudulent debt and are now in dire need of short term dollar liquidity. This is a classic rip-their-face-off after you kick them maneuver.
Its like setting a fire in a crowded theatre after having charged high admission prices for a musical production that did not exist, and then having thugs at all the exits to charge even stiffer fees to leave the building.
And watch to see who benefits the most from this bailout plan and what they do with your money."
What's the take-away? I am a bit disappointed in myself that I didn't recognise that "value" can be overrun by market dynamics (liquidity) to the extent it has. There's actually some risk left in a company trading at roughly one times projected earnings. Whocouldanode? Do you sell it? Its hard to come up with a reason why you would? Except that it'll probably go lower LOL.
http://jessescrossroadscafe.blogspot...-new-york.html
Note: the original source for the info is a Financial Times piece linked in the article.
My favourite part: "Its like setting a fire in a crowded theatre after having charged high admission prices for a musical production that did not exist, and then having thugs at all the exits to charge even stiffer fees to leave the building."
Some key quotes:
According to this report Goldman Sachs is disclosing the most largely held positions of some hedge funds and distributing the list to others with the objective of fomenting a group effort in shorting them, artificially driving down the price, creating more forced redemptions and losses for the fund investors.
Can you imagine if some other company was doing that? With the financial stocks?
Think the elimination of the uptick rule and the widespread toleration of naked shorting is an accident?
The second point of interest is the targeting of specific sectors such as emerging markets, mining, and energy stocks.
What this will accomplish, beside the obvious short term racketeering, is to exaggerate the downward move in some prior favorites, setting up some potentially lucrative short covering rallies when the stocks reach ridiculous valuations on the forced selling and targeted shorting, after the trading banks cover their shorts and buy in for pennies on the dollar.
And don't think for a minute that Goldman and their ilk does not have a 'most shorted' list that it is circulating around to its own select group of traders to target those buys.
We still wonder if some of the Wall Street banks are using their privileged information to short squeeze the European banks who they loaded up with fraudulent debt and are now in dire need of short term dollar liquidity. This is a classic rip-their-face-off after you kick them maneuver.
Its like setting a fire in a crowded theatre after having charged high admission prices for a musical production that did not exist, and then having thugs at all the exits to charge even stiffer fees to leave the building.
And watch to see who benefits the most from this bailout plan and what they do with your money."
What's the take-away? I am a bit disappointed in myself that I didn't recognise that "value" can be overrun by market dynamics (liquidity) to the extent it has. There's actually some risk left in a company trading at roughly one times projected earnings. Whocouldanode? Do you sell it? Its hard to come up with a reason why you would? Except that it'll probably go lower LOL.
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