Posts filed under “Short Selling”

Chanos on Markets, China

Chanos on China

Thu 12 Apr 12 | 07:00 AM ET
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Hedge Fund Titan on the Markets

Thu 12 Apr 12 | 07:55 AM ET

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Category: Short Selling, Video

Higher, but not a blow out take up of ECB’s LTRO

Very short note today, as I have just got back to London and need to get back into the swing of things. Will start writing my daily notes from next Monday. Over 800 banks (523 previously) subscribed for E529.5bn of the ECB’s LTRO funding – slightly above expectations of around E500bn, but, in my humble…Read More

Category: Bailouts, Short Selling, Think Tank

Does Banning Short Sellers Work?

Market Declines: Is Banning Short Selling the Solution?

Robert Battalio
Hamid Mehran
Paul Schultz

Abstract
In response to the sharp decline in prices of financial stocks in the fall of 2008, regulators in a number of countries banned short selling of particular stocks and industries. Evidence suggests that these bans did little to stop the slide in stock prices, but significantly increased costs of liquidity. In August 2011, the U.S. market experienced a large decline when Standard and Poor’s announced a downgrade of U.S. debt. Our cross-sectional tests suggest that the decline in stock prices was not significantly driven or amplified by short selling. Short selling does not appear to be the root cause of recent stock market declines.

Furthermore, banning short selling does not appear to prevent stock prices from falling when firm-specific or economy-wide economic fundamentals are weak, and may impose high costs on market participants.

Hat tip FT Alphaville

Read More

Category: Federal Reserve, Short Selling, Think Tank

The Impact of Phoney Short Squeezes

> Stock investors may take days to distinguish real news from noise, according to Federal Reserve Bank of New York. This is especially true these days, given false announcements of bailouts, Fed interventions and rescues. They tend to cause fake short squeezes that temporarily spike markets, only to see them ultimately head lower. To get…Read More

Category: Analysts, Financial Press, Really, really bad calls, Short Selling, Trading, Web/Tech

Housing’s Big Chill

I always laugh whenever I hear anyone say eejit hack claim “No one saw it coming!” This video — featuring a thinner, less gray version of your humble blogger — discussing the coming housing storm in 2005 gives lie to that claim. The advice: Sell banks, Sell Home Builders, Sell Home Depot and Lowes. Video…Read More

Category: Analysts, Credit, Real Estate, Short Selling

Muddy Waters’ Carson Block: Still short Sino-Forest

Carson Block of Muddy Waters spoke to Bloomberg Television’s Erik Schatzker about Sino- Forest earlier today.

Block said he is still short Sino-Forest and that he isn’t a “ninja assassin” who brings down stocks. He thinks of himself as someone who is “protecting investors.”

Category: Short Selling, Video

UltraShort Indices

I don’t understand why, but I keep seeing portfolios strewn with Ultra-Short inverse funds. These are the ETFs that bet 2X and even 3X that major indices will go down. 20, 30 even 40% of some accounts are laden with these. Please stop. Eventually, the downside bet will be a moneymaker. Eventually. But if you…Read More

Category: Really, really bad calls, Short Selling, Trading

NYT: The Shorts Did in Lehman & Bear!

I’ve been doing the slow burn on a very foolish article in Tuesday’s NYT Dealbook, about European Short Selling rules. The author is somewhat clueless about shorting. He writes: “Companies have long complained that short-selling can lead to stock manipulation. In the financial crisis, managers at Bear Stearns and Lehman Brothers accused large investors of…Read More

Category: Bailouts, Financial Press, Really, really bad calls, Short Selling

Rules for Shorting

I know Whitney Tilson from our Street.com days. He is a smart guy, and a very good Value manager. But like many value guys, he can be early (on trading desks, they call that “wrong”). In his January letter to investors, he discusses some of his recent shorts that have not worked out (see PDF…Read More

Category: Short Selling, Technical Analysis, Valuation

Is China an ‘Enormous Tail-Risk’?

“The Chinese delegation has said all week that there will be double-digit growth for years to come and the Brits have lapped it up. But the data doesn’t add up. We think we’ve experienced credit bubbles over the past few years, but China is the biggest. And yet the global economy is looking to China…Read More

Category: Economy, Short Selling