Germany seeks to extend ban on naked short-selling

[dipsydoodle]

Source: guardian.co.uk

Germany wants to introduce a ban on "naked" short selling of shares and derivatives that could include all company stocks, as part of a clampdown on speculators.

A draft finance ministry document says measures aimed at stabilising financial markets would include a "ban on naked short selling of shares, including derivatives referring thereto," Reuters reported today. The document does not state whether the proposal is aimed at all shares, or specific companies.

The controversial ban would cover euro currency derivatives not used for hedging. Naked short-selling is the practice of selling shares without owning them, borrowing them, or ensuring that they can be borrowed in the future.

A week ago Germany unilaterally banned the naked short-selling of eurozone government bonds, their credit default swaps (CDS) and the shares of the country's 10 biggest financial institutions. The country's sudden crackdown on speculators triggered fresh turmoil in financial markets, leading to a sell-off in shares and wild swings in the euro. The ban on naked short-selling – widely blamed in the country for the deepening eurozone debt crisis – was intended to shore up the embattled single currency, but backfired and caused the euro to slide to a four-year low against the dollar.

Read more: http://www.guardian.co.uk/business/2010/may/25/germany-extend-naked-short-selling-ban

[MineralMan]

1. Well, I'm all for it, if it looks like this:

[dipsydoodle]

2. Nice one

Cyril.

You might need to be english to grasp that.

BTW - thanks for your "appalling lack of knowledge" post a few days back

:hi:

[Joanne98]

5. LOL! I stole your picture!

[dmallind]

3. Damn good idea. We should too.

It's about time we allowed trades only on underlying assets owned by the trading parties.

[happygoluckytoyou]

4. IN A RELATED STORY larry craig says quit picking on him, it was a wide stance, not nekked or short

[Uncle Joe]

6. Kicked and recommended.

Thanks for the thread, dipsydoodle.

[valerief]

7. The Germans also have solar panels on all their houses. Seems like they cleaned out

the Nazis and we got them all.

[Old Troop]

8. I'm sorry. The mental picture of naked stock and bond traders is too

disturbing.

[davidinalameda]

9. I thought this had something to do with tourists

and naked people selling them stuff

I need to go lay down

[ikri]

10. Naked short selling is nothing short of fraud

There is no justifiable reason not to ban naked short selling outright and aggressively prosecute anyone caught doing so.

If you have some spare time read some of the articles on deepcapture.com about the naked short selling trade and the damage it causes to businesses.