What do I do with ....

[etowncoug]

Easy answer...cause it is "trading" and not investing. Stock is sold to INVEST in a company. With shorts and puts, it skews the market, the consumer is no longer investing in the company.

Why keep them out of the market? Well Lehman, Goldman Bear Stearns and others put together mortgage default swaps. They bundled these sh!tty loans, got a better rating on them and knew they would default. They get paid on the front end for putting the funds together and being kind enough to sell them to the Norwegian teachers retirement fund claiming a high yield. Then they knew the assets in that fund would default, they shorted them. So who holds the bag? The consumer. Then the federal government had to bail them out.

It would like allowing me to be in a court room as an observer and bookie, taking bets on the verdict. Then eventually either the defense attn or prosecuting attn wants in on the bigger pay day, and justice goes out the window or perceived justice and it becomes a betting sporting event. You are right, I am shortsighted.

The majority of short sellers are hedge funds who are getting against a company similar to one they own as a way of protecting against the downside. Owning Home Depot and shorting Lowe's as an example. The majority of folks who own puts use them as insurance in case the stock falls. I don't see this as a bad thing.

 

[dgibbons]

Easy answer...cause it is "trading" and not investing. Stock is sold to INVEST in a company. With shorts and puts, it skews the market, the consumer is no longer investing in the company.

Why keep them out of the market? Well Lehman, Goldman Bear Stearns and others put together mortgage default swaps. They bundled these sh!tty loans, got a better rating on them and knew they would default. They get paid on the front end for putting the funds together and being kind enough to sell them to the Norwegian teachers retirement fund claiming a high yield. Then they knew the assets in that fund would default, they shorted them. So who holds the bag? The consumer. Then the federal government had to bail them out.

It would like allowing me to be in a court room as an observer and bookie, taking bets on the verdict. Then eventually either the defense attn or prosecuting attn wants in on the bigger pay day, and justice goes out the window or perceived justice and it becomes a betting sporting event. You are right, I am shortsighted.

You're way over your skis.

 

[dgibbons]

The majority of short sellers are hedge funds who are getting against a company similar to one they own as a way of protecting against the downside. Owning Home Depot and shorting Lowe's as an example. The majority of folks who own puts use them as insurance in case the stock falls. I don't see this as a bad thing.

Ed's a simpleton.

 

[CougEd]

Ed's a simpleton.

That's a compliment coming from you.

 

[dgibbons]

That's a compliment coming from you.

Intelligent choice to admit the obvious.

 

[Flatlandcoug]

You're way over your skis.

I'm no defender of ED.....but he isn't wrong on his post. The things that were done in the name of "profit" back in that time period were pretty disgusting and the entire financial industry was party to it. And anyone who doesn't think that people in the financial industry don't spend 12 hours a day right now trying to find a way to screw over people to make a profit is just sticking their head in the sand. Of course.....when I say "people", I don't mean that they target individuals, but those big financial companies don't care how many people lose as long as they get their profits.

 

[dgibbons]

I'm no defender of ED.....but he isn't wrong on his post. The things that were done in the name of "profit" back in that time period were pretty disgusting and the entire financial industry was party to it. And anyone who doesn't think that people in the financial industry don't spend 12 hours a day right now trying to find a way to screw over people to make a profit is just sticking their head in the sand. Of course.....when I say "people", I don't mean that they target individuals, but those big financial companies don't care how many people lose as long as they get their profits.

Yes he was. Totally small minded, with no concept of the hows, whys, and whats of anything. It was typical Ed, pulling things out of his backside.

 

[CougEd]

Yes he was. Totally small minded, with no concept of the hows, whys, and whats of anything. It was typical Ed, pulling things out of his backside.

Which part is inaccurate? Lehman Bros, New Century, Goldman, Countrywide BC, Mila(CEO was a grad of Granite Falls) and many others packaging loans that were ultimate crap? Or their was a problem with the ratings with regards to these bundled mortgages? Or that the people who bundled the crap bet they would default? Which one are you struggling with?

Or are you struggling with the fact that the fed had to bail out these toxic assets?

 

[etowncoug]

Which part is inaccurate? Lehman Bros, New Century, Goldman, Countrywide BC, Mila(CEO was a grad of Granite Falls) and many others packaging loans that were ultimate crap? Or their was a problem with the ratings with regards to these bundled mortgages? Or that the people who bundled the crap bet they would default? Which one are you struggling with?

Or are you struggling with the fact that the fed had to bail out these toxic assets?

You do realize the government didn't bail out Lehman Brothers, right? You do realize the government didn't bail out Bear Stearns, right? You do realize the government didn't bail out Merrill Lynch, right? You realize the government didn't bail out Washington Mutual, right? You do realize the government didn't bail out countless other banks which went belly up, right? Finally, you do realize the government made money on TARP and lost money on the auto bailout which took place around the same time.

 

[FnuLnu]

Ed's a simpleton.

The Wulff of Wall Street?

 

[CougEd]

You do realize the government didn't bail out Lehman Brothers, right? You do realize the government didn't bail out Bear Stearns, right? You do realize the government didn't bail out Merrill Lynch, right? You realize the government didn't bail out Washington Mutual, right? You do realize the government didn't bail out countless other banks which went belly up, right? Finally, you do realize the government made money on TARP and lost money on the auto bailout which took place around the same time.

What's your point? Yes, I know they let WAMU go. I know they let Stearns go. did I say they didn't. Who paid the ultimate price for these junk mortgages that were packaged in the Norwegian teachers pension or other pension funds? shareholders who had no idea Killinger bought Gold coast Mortgage a sub prime lender who had crap for business and WAMU soon went down after that?

Sterlings Savings. Did they repay their Tarp funds. Who gave Citi, Chase, Wells, BOFA their liquidity?

But not sure of your point? Are you saying these entities that I mentioned didn't package up garbage and then bet they would default?

How about this...who paid for Leo Mozilo golden parachute to walk out the door with I believe 160 million dollars for a company that was worthless?

You are right makes sense to short companies. Especially when an entity knew they would fail. Not all that dissimilar to the Houston hitters knowing what was being thrown next

 

[random soul]

Do they though? Again, the stock market has quit being about ownership in companies and financial fundamentals and more about gambling and gaming the system. I always laugh when a company reports their earnings and they report $4.95 per share instead of $4.98......and the stock falls 10% because "they didn't meet expectations". The stock market is a necessary evil for us at this point as a vehicle for retirement savings, but the whole damned thing is a charade with "liquidity" necessary for brokers and financial companies to extract money from the system. They'll tell you that liquidity is necessary for the system to work and prevent bubbles, but the reality is that investors that are deeply involved with the stock market and are using it as their income only want liquidity because without it, they can't buy a Maserati because they won't have as many trades to skim profit from. Liquidity that turns into excessive volatility isn't a good thing for people being told that they need to invest in the stock market to have money to retire.

Short selling might have a hypothetical purpose, but is not a good thing when you have billionaires and financial companies willing to manipulate the market for financial gain. They will never have total control, but they'll do everything that they can to get their piece of the pie. I still remember with fondness putting hundreds of dollars per month into my kids college savings account in 2008 and 2009, watching the broker scrape his percentage off the top and watching the stock market fall and see that $500 dwindle to $450 (or less). The market came back.....but it's important for everyone outside the financial sector to remember that most of the people that work in the financial sector don't care about you and your money, they only care about how much of it that they can get from you.

This isn't an attack on you......it's just the reality of the system. I read on article that talks up the importance of short selling and when it came down to it, it was just a bunch of propaganda that said that regular investors were too stupid to properly value stocks and that short sellers were the only check to prevent bubbles. It's a nice fantasy, but we see bubbles all the time because the truth is.....short sellers want companies to get overvalued so that they can take advantage of the fall.

A great deal of large scale private equity at the moment has effectively become strip-mining the broader economy, and manufacturing and retail have suffered the brunt of it. Not every retailer that's gone under lately has gone under because of crappy management. The combo of fewer customers with less disposable income and hedge funds buying out the place, loading it up with debt, and then selling off the pieces is a one-two punch that only the biggest of giants could fend off. It's legal, but it's pillaging with accountants, lawyers, and tailored suits instead of berserkers and viking helmets, and it needs some form of thoughtful regulation.