Sweet: Europe triggers Nuclear Option to burn Speculators

HAMISH_MCTAVISH

Generali wrote: »

From your article:

Ah, my mistake then, so a naked short wouldn't apply to forex, only to the shorters of equity markets.

Of which I'm sure there were many though.:D

Given the number of "black Monday" blog and forum posts doing the rounds over the weekend, with the usual suspects cheering on the carnage to come, I rather suspect a lot of these doomsters got their fingers badly burned. And not before time..

As you've probably realised, I find the entire concept of profiting from carnage to be deeply immoral, because it gives market participants motive to cause the carnage to begin with.

But today is a very good day.....

The Eurozone have finally got their act together and realised the danger posed by allowing speculators to run riot.

And the response is substantial, with the leaders coughing up half a trillion Euros and declaring the "wolfpacks" will be beaten at all costs.

I said it before, and I'll say it again, the contagion cannot and will not be allowed to spread.

Harry_Powell

dopester wrote: »

Sarkozy, the fool! Sarkozy has fallen for it, taken the bait, entered the run and followed it to be torn apart near the high stand, storms of splinters before the fire - or absorbed and digested - or the attacks quenched and drowned, by the markets.

Dopester, is this actually supposed to mean anything, or is it just a random convergence of English words?

A thousand apes sat at a thousand typewriters?

[Deleted User]

and indeed there will be weeping and wailing today, op

:rotfl::rotfl::rotfl:

serves them right

Generali

HAMISH_MCTAVISH wrote: »

Ah, my mistake then, so a naked short wouldn't apply to forex, only to the shorters of equity markets.

Of which I'm sure there were many though.:D

Given the number of "black Monday" blog and forum posts doing the rounds over the weekend, with the usual suspects cheering on the carnage to come, I rather suspect a lot of these doomsters got their fingers badly burned. And not before time..

As you've probably realised, I find the entire concept of profiting from carnage to be deeply immoral, because it gives market participants motive to cause the carnage to begin with.

But today is a very good day.....

The Eurozone have finally got their act together and realised the danger posed by allowing speculators to run riot.

And the response is substantial, with the leaders coughing up half a trillion Euros and declaring the "wolfpacks" will be beaten at all costs.

I said it before, and I'll say it again, the contagion cannot and will not be allowed to spread.

The Euro is up about 2 1/2% vs USD so anyone short will have got their fingers burnt.

TBH, a lot of the weakness of currencies like the Euro, US Dollar and Sterling look to me more like a carry trade than an bet on a falling currency given what has happened to higher interest rate currencies like the Aussie dollar.

A carry trade is when you borrow at a low interest rate in one currency and lend that money at a high interest rate in another. For example, you can borrow in the UK or Europe at sub 1% and lend the money to an Aussie bank at about 5%. That's a great bit of business unless FX rates move against you. Warren Buffet(?) described it as like picking up nickels in front of a moving bulldozer - mildly profitable for a while but catastrophic if it goes wrong.

A carry trade is undoubtedly speculative but it does provide a very useful function by redistributing funds with low demand for money and thus a low interest rate to places with high demand and thus a high interest rate.

[Deleted User]

look out for quick offers wanted on cheap property, suddenly on the market

silvercar

Thanks for all the explainations.

I export to Europe and on friday took out foreign exchange contracts to sell Euros over the next few months. Not so much to make money but to cover my position when I know I should have so much Euro coming in. Got a rate about 1.15:)

michaels

Presumably for every speculator getting burned there is another one who bet the other way making a mint? Why is one group more deserving than the other?

HAMISH_MCTAVISH wrote: »

:rotfl::rotfl::rotfl::rotfl:

You heard it here first folks, Hamish was right...... Again.

And dear god do I hope some hedgies and forex hounds get screwed into oblivion with a naked short position.

Euro up 1% in pre market trading already......:D

StevieJ

michaels wrote: »

Presumably for every speculator getting burned there is another one who bet the other way making a mint? Why is one group more deserving than the other?

I suppose one is seen as destructive, i.e, gaining from failure.

michaels

I have some savings - I keep them in cash but that means that every day I am 'shorting' shares, gold etc by deciding that the risk/rewards of putting some of my savings in to these other assets are not worthwhile - I don't see why speculating or the price of something increasing is any more moral than on the price falling - take agricultural products - going log wheat basically says you are hoping that some breadline Africans will starve whereas shorting the contract says you hope they will be able to afford to eat...

StevieJ wrote: »

I suppose one is seen as destructive, i.e, gaining from failure.

Harry_Powell

Depends if the shorting also includes a bit of price manipulation or invented media hysteria to drop the price. Didn't Bin Laden short shares on sept 11 because he knew prices were going to fall after his attack?

michaels wrote: »

I have some savings - I keep them in cash but that means that every day I am 'shorting' shares, gold etc by deciding that the risk/rewards of putting some of my savings in to these other assets are not worthwhile - I don't see why speculating or the price of something increasing is any more moral than on the price falling - take agricultural products - going log wheat basically says you are hoping that some breadline Africans will starve whereas shorting the contract says you hope they will be able to afford to eat...