Woo this is getting more interesting, baru minggu lepas lu ban Short Sell on Some stocks, Sov Debts and CDS
Ze Germans are banning naked short on EUR? For real ka pakcik
All the banned transactions involve methods of betting against companies, bonds or currencies without having an underlying economic interest in the security.
I admire the effort but don't think its gonna work if the ban is not done on a Global Basis.....unless you plan to go the Malaysian way of not allowing OffShore trading of MYR(even with that market can always create synthetic bets via Non deliverables trades settled in other currencies).......I wonder if the Germans can act alone on Currency in the EuroBlock?
Makes me wonder (hari ni gua banyak wonder) how bad the "real" situation is in Europe......scary siut
This is a topic of interest to me..........as I find the currency market as the Melting Pot of All markets and only boys will balls of steel can really play....but there is something clearly not right about the whole thing.........
Let us start with the fact that it is a Global Market without A Global Central Bank or a Global Regulator.....
everyone got their own view on how it should be.......the individual issuers who are Sov Nation has their own set of agenda on what constitute reasonable value and amount to be issued.........the job entrusted to their respective Central bankers who are kacang putih compared to the Global Players who collectively could easily collaborate to raid a particular currency using leveraged trades......
Take the "Carry Trade" whereby one borrow in a lower yielding currency and invest in a higher yielding currency.......it is Economically Valueless according to Mr Turner Chairman of UK FSA.........this monkey totally agree with him....
I had an idea sometime ago on how we could deal with the issue......
It kinda goes something like this
The Creation of a synthetic Gold Market only accessible to Central Bankers for them to clear the actual BOP this would provide a barrier against speculative activity. The market will operate with the Bank of International Settlements to act as the Central Counterparty for Clearing. Each country will participate into a guarantee scheme which will be embedded into the clearing fees. Reserve pooling arrangement and multilateral currency swap arrangement will also be a component. All Currencies will be Traded based on individual Cross Currency rather than relying on the USD as a reference point. More here
Had a long discussion with bro hishamh on the matter.......panjang nak mampus....if you are into currency regimes do check it out.....
I know its far fetched with zero political will to do anything about this matter.....but until when should we allow people to buy and sell currencies without any underlying? Or should we leave it alone and let the market sort it self out
anyway lets just see how ze germans fare with their new measure.........
Is this the beginning of a new world order on Financial Market Regulations and Supervision?
I wonder..........wooooonder