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Why we need speculators

  • 19-05-2010 11:17AM
    #1
    Closed Accounts Posts: 39,019 ✭✭✭✭


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Comments

  • Registered Users, Registered Users 2 Posts: 19,607 ✭✭✭✭sceptre


    This post has been deleted.
    Is it too early in the discussion to draw an analogy with black hat hackers? I could come back later.


  • Closed Accounts Posts: 1,553 ✭✭✭Banned Account


    Have to disagree with you on this one. The reasons for dysfunction in the market are manyfold. The fact that quarterly announcements place a value on short term profits, the fact that those who execute transactions and investments are insulated from financial effects of them going awry, the fact that problems arising in the markets now effect people who were not a perty to the transactions in question - these are structural issues which will only be rectified with regulation.


    What speculators are doing is operating in de-regulated areas and taking advantage of the de-regulation of the markets ushered in under the Reagan and Thatcher regimes.


  • Closed Accounts Posts: 3,672 ✭✭✭anymore


    Please donegalfella, if you keep making statements like this, Brian Cowen & Ahern are going to run out of excuses for destroying more of irish Wealth than another group of Irish people ever !
    Irish self esteem depends on the mythology of the ' Market forces have destroyed us ' ! :eek:


  • Banned (with Prison Access) Posts: 6,798 ✭✭✭karma_


    Greed is good...

    Now where have I heard that before.. :rolleyes:


  • Registered Users, Registered Users 2 Posts: 3,375 ✭✭✭kmick


    Speculators seize on arbitrage opportunities the way crows seize on garbage. It is akin to blaming crows for generating the garbage.

    Anyway it helps exports if the euro falls so let it fall.


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  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


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  • Registered Users, Registered Users 2 Posts: 17,789 ✭✭✭✭peasant


    Would you please elaborate on how "naked short selling" (which has now been banned by Germany) is a good thing (for the market, the economy as a whole and the "keeping honest" of governements in particular)?
    Naked short selling, or naked shorting, is the practice of short-selling a financial instrument without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame, the result is known as a "fail to deliver". The transaction generally remains open until the shares are acquired by the seller, or the seller's broker, allowing the trade to be settled.[1] Naked short selling can be used to fraudulently manipulate the price of securities by driving their price down, and its use in this way is illegal.[2] However, the practice is considered benign under certain circumstances, such as trading by market makers.[3]
    http://en.wikipedia.org/wiki/Naked_short_selling

    Conventional wisdom would hold that selling things that you don't own and can't potentially present at the time of sale either is somewhat "iffy", to say the least.


  • Registered Users, Registered Users 2 Posts: 4,693 ✭✭✭Laminations


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    Really? But I thought you were a libertarian? Whatever the cause of the holes in a sinking ship, it's not wise to allow people (not onboard or reliant on said ship) to push elephants through those holes simply fir their own enrichment..


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


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  • Closed Accounts Posts: 1,553 ✭✭✭Banned Account


    This post has been deleted.

    The net effect is the same - poor regulation/non-regulation - the issue is with the regulation in either case. If you look at the regulatory regimes enforced after the Great depression and strengthened after WW2, whilst enforced, they did a good job, the wheels came off after the measures were rolled back under pressure from lobbyists.


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  • Registered Users, Registered Users 2 Posts: 4,693 ✭✭✭Laminations


    Highlighting weaknesses in a system is one thing but exploiting those weaknesses which then in turn exacerbates the problems should not form part of a 'solution' to the weaknesses. It's like punching a kid in the face to demonstrate he can't defend himself. And you are trying to say speculators are doing this for our benefit?


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


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  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    i wrote about this in parallel thread about a retarded move by the EU
    ei.sdraob wrote: »
    You do realise that you can still naked short sell outside the institutions where it was banned?

    its like banning gambling in states

    you endup with money leaving the system to places that do allow it

    in case you havent noticed this is already having a bigger negative impact on the euro than the Greek crisis (and two of them being so close to each other doesnt help matters)

    gambling/speculating/whatever doesnt affect the economy until the state moves in to socialise the risks of these people/institutions, which im quite against as you know by now

    this move is futile and all it accomplished is further weaken the euro and confidence in the eurozone


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


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  • Closed Accounts Posts: 1,553 ✭✭✭Banned Account


    This post has been deleted.

    OR you could just enforce the regulations thus preventing a rather perverse situation whereby those with the capability of creating whispers can manipulate the markets to their own end. My problem with your suggestion is it seems to be very closely aligned to the idea that two wrongs can make a right. History tells us differently.

    Speculators and de-ragulated markets operated freely in the run up to the Great Depression.


  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    OR you could just enforce the regulations thus preventing a rather perverse situation whereby those with the capability of creating whispers can manipulate the markets to their own end. My problem with your suggestion is it seems to be very closely aligned to the idea that two wrongs can make a right. History tells us differently.

    Speculators and de-ragulated markets operated freely in the run up to the Great Depression.

    Yes close regulation has worked wonders for the USSR


  • Moderators, Science, Health & Environment Moderators Posts: 6,391 Mod ✭✭✭✭Macha


    This post has been deleted.
    What about the crazy dip in the markets last week? What about the influence of less-than-credible rating agencies? The market is extremely vulnerable to manipulation and to describe it as intuitively "steering prices to their correct levels" completely ignores this fact.


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


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  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    taconnol wrote: »
    What about the crazy dip in the markets last week? What about the influence of less-than-credible rating agencies? The market is extremely vulnerable to manipulation and to describe it as intuitively "steering prices to their correct levels" completely ignores this fact.

    so you (well the EU actually) propose replacing manipulation by private companies with manipulation by state company/agency

    yes that would work out great in end :rolleyes:

    btw I wouldnt call what the credit companies did manipulation, they are too incompetent for that as have been shown by history


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


    This post has been deleted.


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  • Closed Accounts Posts: 1,553 ✭✭✭Banned Account


    ei.sdraob wrote: »
    Yes close regulation has worked wonders for the USSR

    Kind of braod statement here - to what and when are you actually referring - the USSR is no more?

    Cheers


  • Closed Accounts Posts: 9,364 ✭✭✭ei.sdraob


    Kind of braod statement here - to what and when are you actually referring - the USSR is no more?

    Cheers

    I wonder why its no more :rolleyes:

    take the example of Germany (so much loved by pro-regulation crowd)

    postwar you have a closely regulated and controlled east vs liberal west (it was more economically liberal than even the US at times)

    which one came out better in the end?


  • Posts: 7,714 ✭✭✭ [Deleted User]


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    Id have thought you'd be against that sort of thing..
    (providing a social service..)


  • Moderators, Science, Health & Environment Moderators Posts: 6,391 Mod ✭✭✭✭Macha


    This post has been deleted.
    Why do you resort to totally exaggerating what I wrote? That is not what I said.
    This post has been deleted.
    I didn't say that we shouldn't have a market? I said that markets are more open to manipulation that you seem willing to admit and I don't see any justification for governments not stepping in to limit the sort of activities that are not the result of simple market forces but genuine attempts to manipulate the market.

    The problem with debating with market fundamentalists is that everything is explained away by the logic that "the market knows best". So the ECB & IMF pledge €120bn to save Greece from defaulting on its debt and then Moody's moves to downgrade Greece's debt, something that makes absolutely no sense, yet I'm sure this will somehow be explained away.


  • Closed Accounts Posts: 1,553 ✭✭✭Banned Account


    ei.sdraob wrote: »
    I wonder why its no more :rolleyes:

    take the example of Germany (so much loved by pro-regulation crowd)

    postwar you have a closely regulated and controlled east vs liberal west (it was more economically liberal than even the US at times)

    which one came out better in the end?


    Ok, so the USSR broke up because of a heavily regulated financial market system:confused:

    But now, you have changed your mind and want to discuss Germany instead?

    Have you any idea as to what type of financial market regulations were in place in West Germany or the USSR or are you confusing my points with general state control?


  • Registered Users, Registered Users 2 Posts: 5,857 ✭✭✭Valmont


    Speculators and de-ragulated markets operated freely in the run up to the Great Depression.
    Really? What was the Sherman act then? The federal reserve act in 1913? I'm tired of this "evil market deregulation" stuff being constantly thrown about. It doesn't take a degree in economics to look even slightly deeper.


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


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  • Closed Accounts Posts: 18,163 ✭✭✭✭Liam Byrne


    I can't disagree more with the OP's post.

    If all of the necessities were traded on the basis of need, then the world would be a better place.

    Having dollars or oil - or even property - more expensive just because someone with sufficient funds stockpiled it in order to make a quick buck - contributing nothing - is sickening.

    Everything the OP posted is ignoring the negative effects of the speculation itself.


  • Closed Accounts Posts: 1,553 ✭✭✭Banned Account


    Valmont wrote: »
    Really? What was the Sherman act then? The federal reserve act in 1913? I'm tired of this "evil market deregulation" stuff being constantly thrown about. It doesn't take a degree in economics to look even slightly deeper.

    The former was merely an anti-trust law, the latter dealt with ensuring that banks held reserves - it wasn't strongly enhanced or ammended until the 1930's.


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  • Registered Users, Registered Users 2 Posts: 557 ✭✭✭Madd Finn


    This post has been deleted.


    Spot the rational objectivist. Somebody who doesn't believe in God but insists that we all believe in the "hidden hand" of the market.

    Never mind all that spooky spiritual business; here's an intangible reality that you should all worship. :eek:

    Penury good, decency bad.
    Selfishness is holy, generosity is immoral.
    Individual good, society bad.

    God bless--well not God obviously but you know what I mean--Milton Friedman, Damn JM Keynes to hell.

    If there is one. :rolleyes:


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