German Iron Lady to buck the market?
Discussion
German Chancellor Angela Merkel on Thursday slammed "treacherous" practices by banks during the Greek crisis and said governments must crack down on speculators hunting profits in the turmoil.
Merkel, whose Christian Democrats face a tough re-election battle in Germany's most populous state Sunday, railed against gamblers on the financial markets who she said were exacerbating an already volatile situation.
"First the banks failed, forcing states to carry out rescue operations. They plunged the global economy over the precipice and we had to initiate recovery packages. Because of these packages, we have become indebted and now, they are speculating against these debts -- that is really very treacherous," she said.
"Governments must regain their supremacy over the markets, which they no longer have, and for that we need much stricter global rules," she added, at a debate on Europe organised by a public broadcaster.
Merkel said it was now up to the European Union member states to reassert their authority and shore up the financial rules governing the bloc.
"We must clearly demonstrate that in Europe we have the political power, each in his own country, of getting back on the track of the Stability and Growth Pact," she said.
"It is a fight of policy against the markets. That is how I see it personally but I am determined -- as are my colleagues, I am certain -- to win this fight and we will be victorious, I am sure."
source
Merkel, whose Christian Democrats face a tough re-election battle in Germany's most populous state Sunday, railed against gamblers on the financial markets who she said were exacerbating an already volatile situation.
"First the banks failed, forcing states to carry out rescue operations. They plunged the global economy over the precipice and we had to initiate recovery packages. Because of these packages, we have become indebted and now, they are speculating against these debts -- that is really very treacherous," she said.
"Governments must regain their supremacy over the markets, which they no longer have, and for that we need much stricter global rules," she added, at a debate on Europe organised by a public broadcaster.
Merkel said it was now up to the European Union member states to reassert their authority and shore up the financial rules governing the bloc.
"We must clearly demonstrate that in Europe we have the political power, each in his own country, of getting back on the track of the Stability and Growth Pact," she said.
"It is a fight of policy against the markets. That is how I see it personally but I am determined -- as are my colleagues, I am certain -- to win this fight and we will be victorious, I am sure."
source
There's a lot of stuff of that nature on TV at the moment, comments from received wisdom holders that markets are in control and governments are not. Hardly surprising as market viewpoints are based on a more valid form of truth than anything held by politicians in government. Politicians seemingly believe their own twaddle now and expect others including the markets to do the same. Delusional.
Traders are predicting chaos on the world's second-largest government bond market after the German authorities on Tuesday announced a ban on all naked short-selling in European public debt, as well as shares in the country's 10 largest financial institutions
The unprecedented step saw the euro sink to a four-year low after Germany said that from midnight shorting of credit default swaps of any European government would be banned. The prohibition is an attempt to counter speculators that Berlin believes are trying to destabilise the region's sovereign bond market.
Traders greeted the move by BaFin, the German regulator, with a mixture of anger and astonishment. One bond trader said he expected Wednesday's trading session to be one of the most volatile in living memory: "It will be complete chaos, I really don't know what the Germans think they are doing."
The unprecedented step saw the euro sink to a four-year low after Germany said that from midnight shorting of credit default swaps of any European government would be banned. The prohibition is an attempt to counter speculators that Berlin believes are trying to destabilise the region's sovereign bond market.
Traders greeted the move by BaFin, the German regulator, with a mixture of anger and astonishment. One bond trader said he expected Wednesday's trading session to be one of the most volatile in living memory: "It will be complete chaos, I really don't know what the Germans think they are doing."
( NAW ) 05/18 02:31PM GERMANY'S BAFIN SAYS BAN TAKES EFFECT FROM MAY 19 TO MARCH 31, 2011 AND 'WILL BE CLOSELY MONITORED'
( NAW ) 05/18 02:32PM GERMANY'S BAFIN SAYS BAN ON SHORT-SELLING ALSO APPLIES TO SHARES OF 10 LEADING FINANCIAL INSTITUTIONS
( NAW ) 05/18 02:33PM GERMANY'S BAFIN SAYS STEP 'DUE TO EXTRAORDINARY VOLATILITY WITH GOVERNMENT BONDS IN EURO ZONE'
( NAW ) 05/18 02:35PM GERMANY'S BAFIN SAYS MASSIVE SHORT SELLING COULD HAVE LED TO EXCESSIVE PRICE MOVEMENTS
( NAW ) 05/18 02:36PM GERMANY'S BAFIN SAYS MASSIVE SHORT SELLING COULD HAVE ENDANGERED FINANCIAL SYSTEM STABILITY
No comment.
( NAW ) 05/18 02:32PM GERMANY'S BAFIN SAYS BAN ON SHORT-SELLING ALSO APPLIES TO SHARES OF 10 LEADING FINANCIAL INSTITUTIONS
( NAW ) 05/18 02:33PM GERMANY'S BAFIN SAYS STEP 'DUE TO EXTRAORDINARY VOLATILITY WITH GOVERNMENT BONDS IN EURO ZONE'
( NAW ) 05/18 02:35PM GERMANY'S BAFIN SAYS MASSIVE SHORT SELLING COULD HAVE LED TO EXCESSIVE PRICE MOVEMENTS
( NAW ) 05/18 02:36PM GERMANY'S BAFIN SAYS MASSIVE SHORT SELLING COULD HAVE ENDANGERED FINANCIAL SYSTEM STABILITY
No comment.
Not that I support such a ban, and without wanting to come across as thick- but does short-selling actually create wealth in the sense of labour-value? Loans and share-issues clearly can, by giving a company/person the ability to increase their earning/work/labour value. Is there an obvious path I'm missing?
Additionally- are there checks in place to stop speculators from hiring large quantities of shares such that they could dump them en masse and artificially lower the shares value? Or is my thinking on what short-selling is miles off?
Additionally- are there checks in place to stop speculators from hiring large quantities of shares such that they could dump them en masse and artificially lower the shares value? Or is my thinking on what short-selling is miles off?
Durruti said:
( NAW ) 05/18 02:31PM GERMANY'S BAFIN SAYS BAN TAKES EFFECT FROM MAY 19 TO MARCH 31, 2011 AND 'WILL BE CLOSELY MONITORED'
( NAW ) 05/18 02:32PM GERMANY'S BAFIN SAYS BAN ON SHORT-SELLING ALSO APPLIES TO SHARES OF 10 LEADING FINANCIAL INSTITUTIONS
( NAW ) 05/18 02:33PM GERMANY'S BAFIN SAYS STEP 'DUE TO EXTRAORDINARY VOLATILITY WITH GOVERNMENT BONDS IN EURO ZONE'
( NAW ) 05/18 02:35PM GERMANY'S BAFIN SAYS MASSIVE SHORT SELLING COULD HAVE LED TO EXCESSIVE PRICE MOVEMENTS
( NAW ) 05/18 02:36PM GERMANY'S BAFIN SAYS MASSIVE SHORT SELLING COULD HAVE ENDANGERED FINANCIAL SYSTEM STABILITY
If you don't mind me asking, what feed is that? Is it publically available?( NAW ) 05/18 02:32PM GERMANY'S BAFIN SAYS BAN ON SHORT-SELLING ALSO APPLIES TO SHARES OF 10 LEADING FINANCIAL INSTITUTIONS
( NAW ) 05/18 02:33PM GERMANY'S BAFIN SAYS STEP 'DUE TO EXTRAORDINARY VOLATILITY WITH GOVERNMENT BONDS IN EURO ZONE'
( NAW ) 05/18 02:35PM GERMANY'S BAFIN SAYS MASSIVE SHORT SELLING COULD HAVE LED TO EXCESSIVE PRICE MOVEMENTS
( NAW ) 05/18 02:36PM GERMANY'S BAFIN SAYS MASSIVE SHORT SELLING COULD HAVE ENDANGERED FINANCIAL SYSTEM STABILITY
HundredthIdiot said:
What have they banned - naked short selling or all short selling?
OK, from another thread it looks like it's only the naked short selling which is banned.More here.
Is this a big problem, other than the perception that the need to clamp down on speculators makes the Eurozone look weak?
Merkel said:
"First the banks failed, forcing states to carry out rescue operations. They plunged the global economy over the precipice and we had to initiate recovery packages. Because of these packages, we have become indebted and now, they are speculating against these debts -- that is really very treacherous," she said.
Nice story. Pity it's utter b
ks. Greece's governments make each failed bank look like a model of financial probity. The country cooked the books in a spectacular manner to get into the Euro and has continued to do so. Its financial reports are fantasy accountancy. That is why it is so vulnerable to attack. Gaz. said:
anonymous said:
[redacted]
She's more unpopular than Brown ever was and she knows it too, if she was after votes she wouldn't have contributed to the Greek bailout and EU safety net, it was political suicide. glazbagun said:
Not that I support such a ban, and without wanting to come across as thick- but does short-selling actually create wealth in the sense of labour-value? Loans and share-issues clearly can, by giving a company/person the ability to increase their earning/work/labour value. Is there an obvious path I'm missing?
No secondary market trade creates any wealth as such.glazbagun said:
Additionally- are there checks in place to stop speculators from hiring large quantities of shares such that they could dump them en masse and artificially lower the shares value? Or is my thinking on what short-selling is miles off?
If you try to offer a significant quantity at once you'll see prices falling before your order is executed (it becomes more of a buyers' market (I refer to exchange-traded securities like stocks here, btw)), so you'll shoot yourself in the foot. There are disclosure requirements once your position exceeds a certain proportion of the outstanding for stocks, but I'm not sure about bonds as they're not exchange-traded.
Edited by anonymous-user on Friday 21st May 10:04
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