As Hank Greenburg says “No amount of regulation can replace good management”. These companies were all badly managed. And the ‘regulators’ were devised in the 1930s when LBOs, CDOs, debt swaps and a hole host of other financial vehicles were not invented.
I’m keeping my powder dry on this one. I’ll be interested to see what Jim Cramer says tonight on this show since he can explain from a trader/insider standpoint who is going to benefit most from this and who won’t.
I’ve yet to find a place which can explain to my why the supposedly illegal practice of naked short selling still exists and is rarely prosecuted. I just dont get it. I know what a naked short is but why was it made illegal in the 30s and then again in 2005 (Reg SHO) but the SEC has had to issue updated regs as recently as this summer to curb its use. WTF??!!
BusinessProfessor, can you help me on this?
“These companies were all badly managed.”
I can agree with that to a point— but it seems awfully strange that so many companies have had the exact same problems. This suggests a systemic cause.
“I’ve yet to find a place which can explain to my why the supposedly illegal practice of naked short selling still exists and is rarely prosecuted.”
Can you give me the quick definition of naked short selling?