|
PureBytes Links
Trading Reference Links
|
Concluding my speculative piece on the state of the markets and
the 'short selling ban'.
Summary:
The runction on world markets started from the, still influential, US
market.
The fundamental causes are:
- US private and corporate debt is at record levels and going up the
chart exponentially. Eventually there has to be a day of reckoning.
Living beyond ones means is a disease of modern culture and the
dominant generations.
- the balance sheets of some of Americas top 500 were/are pretty
parlous, especially the financials.
Institutions are selling them down to re-establish their fundamental
value (price discovery as they say)... it takes a while and the
markets tend to overshoot the mark.... better late than never I
suppose.
The US upsets flowed over to others, especially Europe, because they
are so financially/mentally/emotionally intertwined.
Small out of the way economies, like Australia, were only affected to
a limited extent but their financials took the hit as well.
The story, bandied around by the coalition of the financially
willing, is that the markets were victimised by shortsellers/hedge
funds but this is a beat up of WMD proportions ... all for the
benefit of the public.
'World leaders' are meeting in NewYork even as we speak... I would
love to be a fly on the wall to see what ends they have in mind.
Institutions with healthier balance sheets are now looking for
bargains.
The ban on 'short selling' is a banNOT in the US but looking serious
elsewhere....perhaps the US doesn't really want a ban OR is it a nice
idea that is too difficult to implement OR are they softening us for
draconian restrictions in the future?
Volatility in the markets continued this week (post ban).
Volatility is not caused by short selling etc as such - it is an
indicator of market sentiment... the markets are spooked and rather
like a child who has been woken by the sight of a ghost, they will
not go back to sleep, in that bed again, without a good deal of
soothing.
The markets have very short term memories though.
Gold is a market sentiment indicator and when sentiment settles down
so will gold.
100 seems to be the unofficially agreed new floor for oil????
If so economies are in for a slow wind-down.
Random Evidence:
1) Australia - market controlled by hedgers/short sellers?
- Aus shorting is limited to under 500 stocks/etf's
- only 10% of total shares can be shorted (for approved instruments)
- foreign money can't just flood in and short Aus (it takes time to
move money around/open accounts etc). Regulators can cut off foreign
capital inflow anyway.
- here is a link to current Aus shorts (cumulative).
Post the Sept19 shorts ban the list looks much the same as it did a
week earlier... shorts are still in place so they were long term
hedging OR a part of normal market activities and NOT the result of
short term speculation.
%'s of shorts relative to shorting limits and total shares are very
low.
http://www.asx.com.au/data/shortsell.txt
2) Australia - exposure of Aus banks is limited and factored in
already!
Here is a current article discussing exposure and the fact that Aus
banks have already raised capital ratios well above requirements.
http://business.theage.com.au/business/anz-doubles-capital-raising-
20080904-49za.html
ANZ and NAB are deemed to be the banks with most exposuure and CBA,
WBC with the least... their share prices over the last few months
reflect this.
However it is old news.
Link to official market announcements page > enter ANZ > search and
refer to price sensitive PDF's
16/9/2008 Lehman exposure is minor and 28/07/2008 trading update
(plus earlier price sensitive releases) that discuss
exposure/provisions, cash earnings etc and the fact that forward divs
will be maintained at a forward yield of around 7-8% relative to
current stock price.... the Aus public have already paid for this via
higher margins and fees etc
3) US - volatility continues despite short bans.
GM was heavily sold down yesterday 23/9/2008 by institutions??? and
because of the auto balance sheets ... nothing to do with
speculators???.... price was volatile but volume was half 3 month ave
vol == lack of buyers rather than an excess of naked sellers????
Chrysler proits tumble
http://online.wsj.com/article/SB122217870530867245.html?
mod=yahoo_hs&ru=yahoo
4) speculators move to other shorting mechanisms to work around
financial short bans
link to current CBOE put/call ratio and vols page >> take the top link
http://www.cboe.com/data/PutCallRatio.aspx
put/call ratio late last week was extremely high.
vols on 16-19th inclusive were top 4/5 vols ever.
5) the big boys (or girls) are looking for bargains
examples:
buffet buys financial survivors
http://www.forbes.com/2008/09/23/buffett-goldman-banks-markets-
cx_mm_0923buffett.html?partner=yahootix
Euro banks cash up to buy financials
http://online.wsj.com/article/SB122220793000968729.html?
mod=yahoo_hs&ru=yahoo
Once again - copy broken links to Word - use backspace to put them
back together and they are good to go.
Good trading.
brian_z
--- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@xxx> wrote:
>
> Link to a summary of international short selling regs:
>
>
http://www.asx.com.au/about/pdf/20080923_update_on_asic_response_to_sh
> ort_selling.pdf
>
> Articles laying out OneChicago's position are worth a look:
>
> http://www.onechicago.com/
>
> Interesting that the US started it all and UK/Australia ended up
with
> the most restrictive regs.
>
> UK is talking very tough.
> Aus is writing new permanent legislation (to be announced).
> USA is prevaricating?
>
> (to put broken link back together copy to Notepad and use backspace)
>
> brian_z
>
>
>
> --- In amibroker@xxxxxxxxxxxxxxx, "brian_z111" <brian_z111@> wrote:
> >
> > May you live in interesting times (old Chinese curse?)
> >
> > If we haven't learnt something about trading, from the Freddie,
> > Fannie and Friends affair, we never will.
> >
> > Depending which color shades you wear (I'm speaking as a
freelance
> > trader) - some early speculation:
> >
> > - meetings, between politicians and institutional king makers,
will
> > continue behind closed doors (making or breaking fortunes while
we
> > sleep or take the kids to weekend activities)
> >
> > - short selling bans are not all created equal, of equal length,
> or
> > equally distributed (Aus == total ban justified because of the
> > possibility that a flood of short money looking for a home will
> sink
> > the ship) ... they vary from country to country.
> >
> > - hedge funds are the bad guys (always reassuring to find the man
> in
> > the black hat)
> >
> > - will politicians ever get it right?
> >
> > - agree with Tomasz that backtested systems, in some cases, might
> end
> > up being fit only for the rubbish bin (only if the 'ban' sticks)
> >
> > - they are beating the grass to drive out the snakes (the drums
> will
> > die down soon) .... are they in the right patch?
> >
> > - let's not over react. Get the facts first. What opportunities
> still
> > exist for short selling and how can we play them (paper/TV talk
on
> > this subject is about as entertaining/real as BigBrother)?
> >
> > - IMO the markets have changed in recent times (globalism and the
> > power of speculators) - look out for Global market regulations.
> >
> > - speculators took control of the markets in the dotcom bubble
(for
> > the first time in history?).... once we have tasted forbidden
fruit
> > there is no turning back.
> >
> > - speculators (some of us?) are still around, cashed up and
> > knowledgeable and ready to play (they didn't lose money in the
last
> 6
> > months they piled it on)... they are not going to go away and
hide
> > under the bed.
> >
> > - speculators will move to new playgrounds (already the first day
> of
> > trade this week showed high volatility in stocks continue, record
> > breaking moves in oil and gold)
> >
> > - a trader can still leverage a lot of stock, buy and then sell.
> > When they sell is the volatility produced any different cf to
> holding
> > the stock and shorting OR just straight out shorting?..... so
> market
> > mechanisms still exist for speculators to 'move the markets' to
> some
> > extent.
> >
> > - will the institutions that play on the short side take this
lying
> > down (exchanges, brokers, funds) e.g. will the options industry
OR
> > the SSF exchange fold up their tents (if all shorting is banned)?
> >
> > - already, in Australia, the monopolistic ASX suffered a > 1%
fall
> in
> > the first day of new trading, (ex the short sell ban) - punters
> > believe the profits of listed exchanges, without the turnover
> created
> > by short selling, will be slashed.
> >
> > - fair playing field? Aus regulators decided to ban all short
> selling
> > in Aus indefinitely, following a weekend ring around with their
> > international mates ..... come Monday morning they had to hastily
> > cancel the first hour of trade (no headline announcements there)
> > after the instutionals quickly got on the phone to the Aus
> regulators
> > to add a few quick patches to suit their needs etc etc
> >
> > - speculators might move over to pounding other non-financial
> targets
> > (GM)
> >
> > - outside the US punters can do naughty things like spread
> > betting ... so far some of the big players are 'regulated' and
> > compliant e.g. IG Markets .... is it possible 'dealers' like this
> > will move outside of regulation and develop exotic shorting
> > alternative (businesses always develop products to meet demand)?
> >
> > Watch this space?
> >
> > Those who made a killing on Gold in the last 6 months - was it
good
> > luck or good management? ... remember what goes up fast
(possessing
> > the quality of momentum) can also come down fast.
> >
> > Did anyone using mechanical/AT systems take a haircut based
> > on 'unprogrammable contextual moves'?
> >
> >
> > brian_z
> >
> >
> >
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, "Tomasz Janeczko" <groups@>
> > wrote:
> > >
> > > Yuki,
> > >
> > > On a more positive note - I am sure that list members would
> > > love to hear your opinion about the similarities (if any)
> > > between Japan in the early nineties, and the US now.
> > >
> > > In Bernanke famous speech (2002) that Patrick mentioned earlier
> in
> > this thread
> > >
> >
>
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default
> > .htm
> > > we can find this:
> > > "The Japanese situation is a complex one [...]
> > > Japan's economy faces some significant barriers to growth
besides
> > deflation,
> > > including massive financial problems in the banking and
corporate
> > sectors and a large overhang of government debt.
> > > private-sector financial problems have muted the effects of the
> > monetary policies that have been tried in Japan,
> > > even as the heavy overhang of government debt has made Japanese
> > policymakers more reluctant to use aggressive fiscal policies
> > > [...] Fortunately, the U.S. economy does not share these
> problems,
> > at least not to anything like the same degree"
> > >
> > > Unfortunatelly the last sentence does not seem to be valid in
> 2008.
> > >
> > > Best regards,
> > > Tomasz Janeczko
> > > amibroker.com
> > > ----- Original Message -----
> > > From: "Tomasz Janeczko" <groups@>
> > > To: <amibroker@xxxxxxxxxxxxxxx>
> > > Sent: Monday, September 22, 2008 12:43 PM
> > > Subject: Re: [amibroker] Re: How did everyone do last week?
> > >
> > >
> > > > Hello,
> > > >
> > > > In his post Patrick just added single sentence to
> > > > make sure I notice his private e-mail in my inbox.
> > > > I can not see anything wrong with that.
> > > > I have seen hundreds of posts on this list mentioning
> > > > that somebody posted something via private channel,
> > > > and nobody complained.
> > > > Could we continue in a (more) friendly atmosphere?
> > > > Thank you in advance and have a good day.
> > > >
> > > > Best regards,
> > > > Tomasz Janeczko
> > > > amibroker.com
> > > > ----- Original Message -----
> > > > From: "Yuki Taga" <yukitaga@>
> > > > To: "vlanschot" <amibroker@xxxxxxxxxxxxxxx>
> > > > Sent: Monday, September 22, 2008 12:18 PM
> > > > Subject: Re: [amibroker] Re: How did everyone do last week?
> > > >
> > > >
> > > >> Hi vlanschot,
> > > >>
> > > >> You overrate your ability to engender panic by several
orders
> of
> > > >> magnitude.
> > > >>
> > > >> And yes, you cannot possibly imagine how I coped last week,
> nor
> > this
> > > >> week, nor during any week, unless you take the other side of
my
> > > >> trades.
> > > >>
> > > >> I just find it strange that you had to announce that you
sent a
> > > >> private email -- on a public list.
> > > >>
> > > >> Also, FWIW, I think I was part of this community before you
> > were, and
> > > >> I don't think it has changed that much.
> > > >>
> > > >> You can go back to trying to look clever now; I won't
attempt
> to
> > get
> > > >> into your way. But frankly, the bulk of the membership here
is
> > > >> probably not the least bit interested to know that you sent
an
> > email
> > > >> to anyone who is a member of this list (or the list owner),
the
> > > >> contents of which they will probably never share.
> > > >>
> > > >> And personally, I could not be less interested. But I find
it
> > > >> strange nonetheless.
> > > >>
> > > >> Yuki
> > > >>
> > > >> Monday, September 22, 2008, 6:43:26 PM, you wrote:
> > > >>
> > > >> v> Hi Yuki,
> > > >>
> > > >> v> You seem quite emotional about emails. I can only imagine
> how
> > you
> > > >> v> coped last week. Anyway, you just confirmed why I
> > increasingly feel
> > > >> v> this community has changed over the years in terms of its
> way
> > of
> > > >> v> communicating and sensitivities to rules. I believe there
> > have been
> > > >> v> plenty of other references in this group to private
emails,
> > and
> > > >> v> personally I never realized my email would cause such a
> > reaction.
> > > >>
> > > >> v> In other words, I won't bother again forwarding
references
> > which I
> > > >> v> thought other readers might find interesting. You can
calm
> > down now.
> > > >>
> > > >> v> PS
> > > >>
> > > >>>>
> > > >>>> v> I've send you a private e-mail re my own opinion.
> > > >>>>
> > > >>>> That would be "I've sent" of course, and highly
illuminative
> > for the
> > > >>>> list members, at that. Why would you mention on list that
> you
> > sent
> > > >>>> someone a message off list? Would you suspect they are
not
> in
> > > >>>> receipt of such message? Would you like to get
subscribers
> to
> > your
> > > >>>> off list messages?
> > > >>>>
> > > >>>> I've sent a number of people private emails. And I'm
> beating
> > my
> > > >>>> benchmark by more than 30 percent.
> > > >>>>
> > > >>>> Phooey.
> > > >>>>
> > > >>>> Yuki
> > > >>>>
> > > >>
> > > >>
> > > >>
> > > >>
> > > >>
> > > >>
> > > >>
> > > >> ------------------------------------
> > > >>
> > > >> Please note that this group is for discussion between users
> only.
> > > >>
> > > >> To get support from AmiBroker please send an e-mail directly
> to
> > > >> SUPPORT {at} amibroker.com
> > > >>
> > > >> For NEW RELEASE ANNOUNCEMENTS and other news always check
> DEVLOG:
> > > >> http://www.amibroker.com/devlog/
> > > >>
> > > >> For other support material please check also:
> > > >> http://www.amibroker.com/support.html
> > > >> Yahoo! Groups Links
> > > >>
> > > >>
> > > >>
> > > >
> > > > ------------------------------------
> > > >
> > > > Please note that this group is for discussion between users
> only.
> > > >
> > > > To get support from AmiBroker please send an e-mail directly
to
> > > > SUPPORT {at} amibroker.com
> > > >
> > > > For NEW RELEASE ANNOUNCEMENTS and other news always check
> DEVLOG:
> > > > http://www.amibroker.com/devlog/
> > > >
> > > > For other support material please check also:
> > > > http://www.amibroker.com/support.html
> > > > Yahoo! Groups Links
> > > >
> > > >
> > > >
> > >
> >
>
------------------------------------
Please note that this group is for discussion between users only.
To get support from AmiBroker please send an e-mail directly to
SUPPORT {at} amibroker.com
For NEW RELEASE ANNOUNCEMENTS and other news always check DEVLOG:
http://www.amibroker.com/devlog/
For other support material please check also:
http://www.amibroker.com/support.html
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/amibroker/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/amibroker/join
(Yahoo! ID required)
<*> To change settings via email:
mailto:amibroker-digest@xxxxxxxxxxxxxxx
mailto:amibroker-fullfeatured@xxxxxxxxxxxxxxx
<*> To unsubscribe from this group, send an email to:
amibroker-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|