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TREASURIES-Prices jump after Germany bans naked shorts
Reuters ^ | Emily Flitter

Posted on 05/18/2010 12:04:43 PM PDT by 6SJ7

NEW YORK, May 18 (Reuters) - U.S. Treasuries prices rose on Tuesday, with the 30-year bond rising a full point, as Germany announced it would ban some short-selling activities and Wall Street stocks turned lower.

Treasury yields hit session lows after Germany's Finance Ministry announced a ban on naked short-selling at major banks. The ban would include a prohibition against naked shorting of euro government bonds. For more, click on [ID:nBAT005467]

Germany did not ban all short-selling of bonds, but by banning naked short-selling -- in which a position is taken on a bond without buying or borrowing the asset to support that position -- the government could make shorting more difficult because the supply of bonds to buy or borrow in such cases can become limited.

"If you can't sell a government bond short, then how is the market going to be deep and legitimate?" said Raymond Remy, head of U.S. fixed income at Daiwa Securities in New York. "I think that is bad for any market, but it just puts a little spook everywhere."

(Excerpt) Read more at reuters.com ...


TOPICS: Business/Economy; Foreign Affairs; Germany; News/Current Events
KEYWORDS: bans; germany; jump; naked; nakedshorts; napl; prices; shorts; treasuries
It's a topical article related to the whole Greece / Eurozone debacle, but it also just sounds funny. I have this image *shiver* of naked German tourists with white socks and sandals.
1 posted on 05/18/2010 12:04:43 PM PDT by 6SJ7
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To: Slings and Arrows

Naked Shorts PING! < /sarc >


2 posted on 05/18/2010 12:05:14 PM PDT by a fool in paradise (Throw the bums out in 2010.)
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To: a fool in paradise

“bans naked shorts”

And

Woolly mittens too


3 posted on 05/18/2010 12:06:23 PM PDT by edcoil (RAGE AGAINST THE MACHINE.)
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To: 6SJ7

They’re playing Whack-a-Mole with the markets.............


4 posted on 05/18/2010 12:07:05 PM PDT by Red Badger (When you see Jerusalem being surrounded by armies, you'll know that its desolation is NEAR. Luke 21)
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To: 6SJ7

Parked ... Governments will have things thoroughly screwed up by years end. Socialism, as it always does, goes face down in the mud, and then the rains of global warming comes.


5 posted on 05/18/2010 12:07:41 PM PDT by Tarpon (Obama-Speak ... the fusion of sophistry and Newspeak. It's not a gift, it's just lies.)
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To: 6SJ7
Naked shorts ?


6 posted on 05/18/2010 12:07:51 PM PDT by llevrok (A stranger in my own country)
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To: 6SJ7
Prices jump after Germany bans naked shorts

That is correct sir, nobody under 5 foot in height may appear naked in public...

7 posted on 05/18/2010 12:08:27 PM PDT by apillar
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To: 6SJ7
Are they banned too?


8 posted on 05/18/2010 12:08:54 PM PDT by colorado tanker
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To: 6SJ7; mikrofon; Charles Henrickson
Germany bans naked shorts


9 posted on 05/18/2010 12:09:45 PM PDT by martin_fierro (Ich bin ein bareloiner)
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To: 6SJ7

I understand shorts and think they have a place in a legitimate market, but I do not believe naked shorts have a place.

Try a “naked Pass” bet at the next craps table you visit.


10 posted on 05/18/2010 12:10:00 PM PDT by IamConservative (Liberty is all a good man needs to succeed.)
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To: llevrok

Yikes
for some reason this image is quite disturbing


11 posted on 05/18/2010 12:11:09 PM PDT by DM1
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To: martin_fierro

LOL!!!


12 posted on 05/18/2010 12:11:51 PM PDT by silverleaf
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To: apillar

Call the PPT the stoks is dropping.


13 posted on 05/18/2010 12:11:56 PM PDT by screaminsunshine (S)
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To: 6SJ7
"If you can't sell a government bond short, then how is the market going to be deep and legitimate?"

How disingenuous. If naked shorts are banned they can still sell the bonds short if they actually have them.

14 posted on 05/18/2010 12:13:52 PM PDT by glorgau
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To: 6SJ7

Holey lederhosen!


15 posted on 05/18/2010 12:14:01 PM PDT by Hunton Peck (In the postmodern land of the blind, the one-eyed man is killed in his sleep.)
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To: screaminsunshine
Speaking of the PPT. from this past February....

Plunge Protection Team Cover-Up

16 posted on 05/18/2010 12:15:00 PM PDT by mewzilla (Still voteless in NY-29.)
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To: martin_fierro

It’s scary you find the pics you do. :O)


17 posted on 05/18/2010 12:17:12 PM PDT by library user
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To: edcoil
"Germany bans naked shorts."


18 posted on 05/18/2010 12:17:45 PM PDT by Dem Guard ("We're Coming to Take You Away ")
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To: a fool in paradise; MeekOneGOP; Conspiracy Guy; DocRock; King Prout; Darksheare; OSHA; ...
Lederhosen-on-the-ground ping!


19 posted on 05/18/2010 12:18:15 PM PDT by Slings and Arrows (Just another day in Oceania.)
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To: 6SJ7

“Germany bans naked shorts”

http://www.youtube.com/watch?v=cu2nmeKvN1I

This is totally hysterical. Everybody should see the above video.

It is a takeoff on those stupid women who paraded nude from the waist up.

It has many hicups, so let it run once (with the sound off so you can be surpised). Then start it up again. It is not offensive.


20 posted on 05/18/2010 12:18:38 PM PDT by Gatún(CraigIsaMangoTreeLawyer)
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To: 6SJ7

30 year fixed mortgage rates down to 4.875%, moving in on 4.750%.


21 posted on 05/18/2010 12:20:06 PM PDT by HereInTheHeartland (Chairman Mao was a community organizer)
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To: 6SJ7

Naked Shorts = Fraud: Trying to sell something that doesn’t exist as you do not own it and have no liabilities if the stock does not sell. Naked shorting is a means to force prices lower by offering a stock at a low price and if it does not sell then the seller has no liabilities.

Normal shorting, and a good thing ofr markets, means the seller has ownership of the stock and a liability. To short sell, one borrows a stock and sells it at market price. the borrower owes the original owner of the stock a share of stock back plus a small fee. To make money, the short seller hopes the stock price goes down so they can buy the stock cheaper than they borrowed it, return the stock to the owner, and pocket the difference.

Naked short sellers do not have the stock to sell, so if the price does not go down they are out nothing. This is market manipulation and fraud. The reason for fraud is that should you buy a naked shorted stock, the seller must then go find stock to sell you. They may not find it.


22 posted on 05/18/2010 12:22:45 PM PDT by CodeToad
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To: mewzilla

Here they come to save the day!


23 posted on 05/18/2010 12:32:16 PM PDT by screaminsunshine (S)
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To: CodeToad

I guess naked shorts is somewhat similar to “buying on margin” back in the 20s? Same result anyway: people making irrational decisions with fiat money.


24 posted on 05/18/2010 12:33:48 PM PDT by ChinaThreat (3)
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To: Slings and Arrows

Naked shorts.

http://conceptrends.com/wp-content/uploads/2008/05/naked_shorts_humor.jpg

(Don’t blame me if you click the link.)


25 posted on 05/18/2010 12:34:05 PM PDT by Responsibility2nd (PALIN/MCCAIN IN 2012 - barf alert? sarc tag? -- can't decide)
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To: ChinaThreat

“buying on margin”

Not really. When you lost on margin you paid on that margin. With naked shorting a seller can walk away with no liabilities.


26 posted on 05/18/2010 12:42:35 PM PDT by CodeToad
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To: Slings and Arrows
Pants on the ground
Pants on the ground
You can't short stocks
With your pants on the ground
27 posted on 05/18/2010 12:46:38 PM PDT by Enterprise (Dan Rather said Obama is so incompetent he couldn't sell watermelons.)
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To: 6SJ7

......If you can’t sell a government bond short, then how is the market going to be deep and legitimate......

The old fashioned way. You borrow the bond, then sell it short.


28 posted on 05/18/2010 12:48:44 PM PDT by bert (K.E. N.P. +12 . Ostracize Democrats. There can be no Democrat friends.)
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To: CodeToad

Good point. Absolutely no liability with naked shorting. I have lost ALL faith in our markets. No where left to put my $$$ (whats left). My theory is that we continue to see this shift of investments from the Eurozone into US Treasuries. After the EURO falls apart (taking the UK w/it, and rightfully so), there will eventually be a failed US Treasury auction which sets off the mother of all crashes. Then Asia deteriorates with no one to buy their goods. Almost like another good ‘ol Dark Ages. Maybe not quite as bad and prolonged this time. But the Great Depression will look like a damn good time compared to what i see coming.

The only way out of this mess is through a complete and total global economic reset unfortunately. Of course, this scenario implies a linear progression, which never happens in reality.


29 posted on 05/18/2010 12:49:38 PM PDT by ChinaThreat (3)
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To: Enterprise

At the very least it would cause comment on the trading floor.


30 posted on 05/18/2010 12:49:53 PM PDT by Slings and Arrows (Just another day in Oceania.)
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To: Responsibility2nd

I clicked the link.

I blame you.


31 posted on 05/18/2010 12:51:12 PM PDT by Slings and Arrows (Just another day in Oceania.)
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To: Slings and Arrows

lolol

Now I know what you want for your birthday.

(Not that I’m getting them for you. But I know you know - You want them.)

lololol


32 posted on 05/18/2010 12:53:18 PM PDT by Responsibility2nd (PALIN/MCCAIN IN 2012 - barf alert? sarc tag? -- can't decide)
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To: Slings and Arrows

This has the makings of the threads where we analyze the value of the Dong.


33 posted on 05/18/2010 1:06:30 PM PDT by GOP_Raider (<----Click over there for a special message from GOP_Raider)
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To: ChinaThreat

” complete and total global economic reset unfortunately. Of course, this scenario implies a linear progression”

Toally agree. History is non-linear. Today, peace; tomorrow, war. I bet no one in Germany in 1933 thought they would be in a world war in 1939. IN the US, December 6th, 1941 was a good day. December 7th was non-linear.


34 posted on 05/18/2010 1:13:24 PM PDT by CodeToad
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To: GOP_Raider

Naked Short Sales pushed more than one business under in 2008, and can be cited as a major contributory factor to the Great Recession.

You want to sell short, do it by “borrowing” the stock, so that the seller has liability and responsibility to replace the stock at the end of the trading session. The player should have “skin” in the game, not a total lack of liability.


35 posted on 05/18/2010 1:13:49 PM PDT by rstrahan
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To: Responsibility2nd

No thanks. People could tell what religion I am.


36 posted on 05/18/2010 1:13:54 PM PDT by Slings and Arrows (Just another day in Oceania.)
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To: GOP_Raider

Or discuss the Moro Islamic Liberation Front.


37 posted on 05/18/2010 1:14:35 PM PDT by Slings and Arrows (Just another day in Oceania.)
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To: CodeToad

Do you think that the uptick rule should be reinstated for regular shorts if they ever banned the naked shorts? Just curious


38 posted on 05/18/2010 1:16:35 PM PDT by Lilpug15 (The Forgotten Man: He works, he votes and he generally prays - but He Always Pays": Sumner)
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To: Lilpug15

Nope. Shorting is fine. It is a valid technique and should be employed as anyone wants. The reason the uptick rule was established was because there is extreme naked shorting. I have personally been involved with stocks that have been proven to have been naked shorted for many times the amount stock was ever issued.


39 posted on 05/18/2010 2:59:28 PM PDT by CodeToad
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