Seeking Alpha

Also in Merkel's response to the S&P downgrades comes this chilling idea: She says she will...

Also in Merkel's response to the S&P downgrades comes this chilling idea: She says she will consider legislation to bar institutional investors such as insurance companies from selling bonds when ratings are downgraded, or fell below investment grade. If banning short sales doesn't work, why not step it up a notch and ban selling altogether?
Comments (75)
  • divinecomedy
    , contributor
    Comments (463) | Send Message
     
    And people thought hyperinflation's a joke.
    15 Jan 2012, 08:22 AM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (7484) | Send Message
     
    still the concept of forced selling is ignorant. This is the whole problem with our system. Causing a death spiral helps no way.

     

    Cutting off increased credit or something in that direction is the answer. You can't get somebody addicted to drugs and then just one day cut them off.
    15 Jan 2012, 10:18 AM Reply Like
  • cynic2011
    , contributor
    Comments (652) | Send Message
     
    There is no concept of forced selling. On the contrary the idea is to prohibit the investor selling. This would be an ex post facto law (at least as it regards present owners),which I believe is illegal in Germany.

     

    One could always market a new issue with the proviso that the original purchaser must hold to maturity under all circumstances,but that would undoubtedly raise the rate a lot.
    15 Jan 2012, 11:24 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    Forced selling? I think the idea is forced buyiing, or forced holding.

     

    I hear Bernanke floated that idea for a while: prohibit selling of stocks and bonds in America for the next two years. It would have saved us a lot of money, vis-a-vis all the forced buying of bonds in which he participated to try to ensure the same thing.
    15 Jan 2012, 12:50 PM Reply Like
  • tunaman4u2
    , contributor
    Comments (3404) | Send Message
     
    Stone Fox: You also can't get someone addicted to drugs off by giving them exponentially more either son
    15 Jan 2012, 01:26 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9964) | Send Message
     
    MC,
    See comments on the interpretation and translation issues as made below. The main idea being that insurers and other not be forced to sell just because of a ratings downgrade, which would make sense for the bond holder's viewpoint.
    15 Jan 2012, 03:46 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (4555) | Send Message
     
    This is the model Obama is following. Communist streak runs deep in these people, beware. Stay away from the EU (European Utopia).
    15 Jan 2012, 08:32 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    Obama a communist? If he was a communist he would not have been bending over to US banks for the last three years, he would have been dismantling them and sending bank crooks to Siberian death camps. 'Communist streaks'? I realize this is an attempt at humor; but the 1950's are over and the world has clearly changed in the last 60 years. The trouble is, many of our conservatives in America are still viewing the world through the 1950's eyeglasses that were handed out by Joe McCarthy. Time to update to a pair of 2012 glasses.
    15 Jan 2012, 12:53 PM Reply Like
  • wyostocks
    , contributor
    Comments (8852) | Send Message
     
    Michael, the real problem is that too many liberals in America are still viewing the world through the 1950's eyeglasses that were handed out by Joseph Stalin.
    Time to update to a pair of 2012 glasses and realize how they are destroying this once great country.
    15 Jan 2012, 01:00 PM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    Propoganda of the 1950's crowd. Who destroyed America in 2008? Greedy bankers and their boyfriends in Washington. Not for 'the people' -- but for their own pocketbooks and the glory of the religion of capitalism.

     

    Stalin's dead for a long-time now; Russia is capitalist; China is capitalist (sort of); Vietnam is honoring capitalism, Cuba is teetering, North Korea just had a big death...I don't know anyone singing the glory of communism anymore.

     

    The right uses the communist bogeyman to cripple intelligent discussion, and to try to keep American policy in a tight little spectrum intended to keep narrow-minded business billionaires running the country. The Republicans are using the tactics that worked in the 1980's but which are going to turn them in to obvious dinosaurs over the next decade or so.
    15 Jan 2012, 01:19 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4501) | Send Message
     
    McCarthy was ahead of his time and absolutely correct in his assessments. What you and other socialists like you forget is the absolute horror of what communism actually was and what it ultimately led to.

     

    You didn't then nor do you now appreciate the evil of post World War 2 totalitarianism that came from the niceties of the big 3 at Yalta.

     

    And what concession did we get? It was like cutting steak for wolves. Split Berlin in two. You get the right half, we get the left half. What a waste. An entire generation frozen in amber! Look at the Koreas. China gets her northern pet as a concession. Meanwhile South Korea gets to retain freedom and years of economic growth as a result. Communism is an absolute horror. You merely lack the appreciation of it. And socialism is its queer red headed step child.

     

    Communism officially and publicly failed in 1991 with the USSR, the problem is that we have adopted many of its failures ourselves. Socialism is in trouble, but don't tell that to the socialists. Cuba fired over 600,000 of its government stooge 'workers', said it could no longer afford them. Well, duh.

     

    Cuba is ahead of Greece on the learning curve it seems.

     

    Obama said he was going to merge 6 government agencies and symbolically said 'Reagan'. HAHAHAHAHA. He'll save a measly $3 billion over 10 years! What a doof. And, the media, predictably carried his water, again.

     

    No. We need to cut several, several trillion dollars and fire millions of government workers or we'll be Greece in a couple years. But socialism has never been tried, right? We need to try it harder. Yeah, if only Paul Krugman was president, then everything would be alright then.
    15 Jan 2012, 02:29 PM Reply Like
  • coddy0
    , contributor
    Comments (1182) | Send Message
     
    Michael Clark
    Obama a communist? If he was a communist he would not have been bending over to US banks for the last three years, he would have been dismantling them and sending bank crooks to Siberian death camps. 'Communist streaks'?
    ======================...
    There are different stages of Communism. In its final stages it becomes corrupted and then corrupted and weak. Think about Leonid Brezhnev {14 October 1964 – 10 November 1982}
    15 Jan 2012, 11:37 PM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    Is everyone who favors social programs like food for the poor, like reasonably priced health care, like retirement pensions for all workers, a communist? If so, then I can accept the idea that Obama is a communist. I am too I guess. I don't want communism. I think communism is the unbalanced opposite of an unbalalnced capitalism: as you say, corrupt; then corrupt and weak.

     

    The ideal is the balance: capitalism (individualism) and communism (community-ism). This is especially so when your goal is quality of life, not simply quantity (capitalism, in the extreme, is all quantity; communism in the extreme is a complete absence of quantity): the balance has both quality and quantity as equal concerns.
    16 Jan 2012, 12:35 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4501) | Send Message
     
    Yes. Everyone who favors social programs is a socialist, the kid brother of a communist. And they always use 'food for the poor' as their mantra. Look at the literature. Look at Mao's agitprop. Look at Russia's. Its like a Jehovah Witness red book, everyone sitting indian style on green prairies like they're having a 1950's picnic, smiling, the farmers plowing the field for the express purpose of 'feeding the world' and no other ulterior motive than world peace and making the bad things go away.

     

    Retirement pensions are what destroyed GM. They're also what are destroying the state's budgets across the entire nation. Obamacare made 'reasonably priced healthcare' worse as he forced a cramdown. Such is the way of all socialism(ie communism). You are right. Obama is a communist. So are you. Accept it. But first, understand it. I am using the simplicity of the english language, words and their definitions. If some words have ugly endings, it is because that's where all socialism ends up(in Europe) fracturing apart, or in communism with Stalin murdering over 20 million of his own people.

     

    Guess what? I am not a communist. Glad to know you are.
    16 Jan 2012, 12:57 PM Reply Like
  • sr1977
    , contributor
    Comments (364) | Send Message
     
    European post-nuptial agreement: What’s ours is ours and what’s yours is ours.
    15 Jan 2012, 08:46 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    That's the German Pre-Nup with the Periphery.
    16 Jan 2012, 03:22 AM Reply Like
  • Eighthman
    , contributor
    Comments (276) | Send Message
     
    When did Germany become Argentina? How can a bond be valued if it is illiquid or non-saleable?
    15 Jan 2012, 08:59 AM Reply Like
  • WMARKW
    , contributor
    Comments (10483) | Send Message
     
    Eiththman....without valuation, then you have the same outcome as non-mark to market in the banking system. Banksters are more than happy to have someone allow them to avoid addressing to their realities.

     

    Their realities are simply that they have always tired to make money in a fractional, undercapitalized model. Perhaps the bankster's business model needs to be simplified to that their options for "losing money" are reduced.
    15 Jan 2012, 03:40 PM Reply Like
  • Uncle Pie
    , contributor
    Comments (3784) | Send Message
     
    Don't worry, the investment banks will immediately invent a derivative which will allow you to sell a bond without selling the bond. It will
    trade in the Cayman Islands or someplace.
    15 Jan 2012, 09:08 AM Reply Like
  • phxcrane
    , contributor
    Comments (550) | Send Message
     
    Your Right. Thank God. Can you imagine if there was no way around this stupidity? I don't know why Merkel would say something this foolish. She must be trying to scare someone.
    15 Jan 2012, 11:34 AM Reply Like
  • coddy0
    , contributor
    Comments (1182) | Send Message
     
    phxcrane
    I don't know why Merkel would say something this foolish. She must be trying to scare someone.
    ======================...
    It comes from her job description
    Either she said something or she is no leader
    15 Jan 2012, 11:47 PM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    That's what happens when a Scientist gets invited to participate in a financial event.

     

    She hasn't a clue.
    16 Jan 2012, 03:24 AM Reply Like
  • cynic2011
    , contributor
    Comments (652) | Send Message
     
    Mr. Market would deal with it in any event. It's disappointing to see Merkel start acting French.
    15 Jan 2012, 09:26 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    If Merkel starts 'speaking' French, then maybe we can throw her into the dust-heap with John Kerry and Mitt "Big Love" Romney. The motto of American politicians: "When Stupidity sells, then you just got to make more of it to sell and make a killing."

     

    That's the trouble with the business mentality in power.
    15 Jan 2012, 12:55 PM Reply Like
  • nasdaq99
    , contributor
    Comments (114) | Send Message
     
    Start acting French? Do a wiki for Angela Merkel. She's socialist through and through. They all are. And they will go on and on until they run out of someone else's money. Socialists always need more and more because they just didn't do it BIG enough last time. Ben, Obama, Merkel, G-Pap, they all just needed a little bit more of someone else's money. The world is run by socialists. Next up: Fascism. It's where we are headed. In fact, the mere mention of forbidding selling is the first step toward fascism.
    15 Jan 2012, 03:41 PM Reply Like
  • WMARKW
    , contributor
    Comments (10483) | Send Message
     
    Big Love?
    15 Jan 2012, 03:41 PM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    Big Love was a HBO series that ran for years (very good actually) about a Mormon Polygamist politican in Utah, his three wives, and his insane clan, killing, stealing and trying to kill.

     

    I hear Mitt was furious about it coming along just when he had plans for the "Big Love" Campaign for the presidency.
    15 Jan 2012, 11:04 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (4143) | Send Message
     
    "Fascism. It's where we are headed. In fact, the mere mention of forbidding selling is the first step toward fascism."

     

    Get a grip. There was no mention of forbidding selling. That was a translation error.
    15 Jan 2012, 11:33 PM Reply Like
  • coddy0
    , contributor
    Comments (1182) | Send Message
     
    Michael Clark
    bout a Mormon Polygamist politican in Utah, his three wives, and his insane clan, killing, stealing and trying to kill.
    I hear Mitt was furious about it coming along just when he had plans for the "Big Love" Campaign for the presidency.
    ======================...
    are you long lost child of this family ?
    15 Jan 2012, 11:53 PM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    Not to my knowledge, Coddy. Of course, if you go back far enough, I am. I am even related to you, Coddy.
    16 Jan 2012, 12:38 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    Socialist! Lets execute them! God wants us to execute socialists!

     

    Jesus was a socialist, by the way. His doctrine was love, peace and sharing world wealth.

     

    Today's Christians are generally not Christians. They are Pauleans (followers of Saint Paul) or they are Romans (who executed Jesus).
    16 Jan 2012, 12:39 AM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
     
    Yes, I totally agree.
    16 Jan 2012, 12:41 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    Mr. Clark is right.

     

    They actually come from my woodpile, those "pseudo" Christians, actually "reformist Jews", to be technically correct.

     

    Jesus, for Christians, replaced Jewish law. For traditional Jews, the commandments (mitzvot) and Jewish law (halacha) are still binding.

     

    Jesus is seen by Jews as someone who challenged the religious authorities of his day for their practices. In this view, he meant to improve Judaism according to his own understanding not to break with it.

     

    The Catholic Church (Universal Church) was a reformist idea of Jesus, as "Catholic" is latin for "universal", everyone is welcome.

     

    Peter WENT to Rome, (still played for our team), he wasn't Italian, but his tailor was! He was ordered to build this first Universal (Catholic) Jewish Reformist Church. He also became the first Jewish Pope, I say the first, as there where more than a few.

     

    Oy! Pope still wears our team's cap though, nu?

     

    Jesus was even credited with a "market correction event" as well, according to their book, money changers being cast out of the temple.
    16 Jan 2012, 03:53 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    I wanted to cast Hank Paulson out of the temple, Doctor V. But I have never found the Jehovah's Witness temple in which he has been hiding.
    16 Jan 2012, 04:10 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    Wait!

     

    "Hammering" Hank Paulson is a Christian Scientist, or?
    16 Jan 2012, 04:27 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    I stand corrected. He IS a Christian Scientists, not a JWitness. No wonder I haven't been able to find him and cast him out.

     

    I thought he was a devil, in fact. But I'm not sure there are any devils in the Christian Scientist faith. I think devils are searched at the door and not let in.
    16 Jan 2012, 09:11 AM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4501) | Send Message
     
    Heh heh. Nice try, Mikey.

     

    But this sounds like a union contract gone seriously awry. And yes, it was from ... Jesus own mouth. (pssst. Those are the words in red).

     

    Matt 20:1-16 "For the Kingdom of Heaven is like a man who was the master of a household, who went out early in the morning to hire laborers for his vineyard. When he had agreed with the laborers for a denarius a day, he sent them into his vineyard. He went out about the third hour, and saw others standing idle in the marketplace. To them he said, ‘You also go into the vineyard, and whatever is right I will give you.’ So they went their way. Again he went out about the sixth and the ninth hour, and did likewise. About the eleventh hour he went out, and found others standing idle. He said to them, ‘Why do you stand here all day idle?’ "They said to him, ‘Because no one has hired us.’ "He said to them, ‘You also go into the vineyard, and you will receive whatever is right.’ When evening had come, the lord of the vineyard said to his steward, ‘Call the laborers and pay them their wages, beginning from the last to the first.’ "When those who were hired at about the eleventh hour came, they each received a denarius. When the first came, they supposed that they would receive more; and they likewise each received a denarius. When they received it, they murmured against the master of the household, saying, ‘These last have spent one hour, and you have made them equal to us, who have borne the burden of the day and the scorching heat!’ "But he answered one of them, ‘Friend, I am doing you no wrong. Didn’t you agree with me for a denarius? Take that which is yours, and go your way. It is my desire to give to this last just as much as to you. Isn’t it lawful for me to do what I want to with what I own? Or is your eye evil, because I am good?’ So the last will be first, and the first last. For many are called, but few are chosen."

     

    I know the height of a man's ego is to make god into their own image(ie Jesus was a communist), but last I heard it was the other way around, we were supposedly made in His.

     

    Read the passage. It reads like the free market, tells people to buck up and be responsible for their own agreement they previously made and to stop whining. Oh, I forgot, the chief aim of a union is to whine. Darn.
    16 Jan 2012, 01:02 PM Reply Like
  • WMARKW
    , contributor
    Comments (10483) | Send Message
     
    And of course, the interesting thing about Jesus is that in these verses, as in His whole life, there was no such thing as compulsion. Not so with the "isms" you speak of. Jesus was not about forcing one to help his brother, but helping one to see that they if they loved one another, they would help automatically.
    16 Jan 2012, 06:32 PM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    Only in the new book.
    17 Jan 2012, 01:44 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    Of course you are right WMarkW. Jesus didn't need followers. He had followers because he had Wisdom (he was married to Shekinah, the Jewish goddess of Wisdom, the spirit of the Moon, who rules the Night-Cycles) -- and his followers were in pain and needed help.

     

    In the world based on Love, which is the nature of the Night-Cycle (as opposed to Will Power, Day-Cycle), living in Wisdom -- equality, love, sharing) is the obvious choice. But when the two worlds meet, the Selfish ("I am") world and the Unselfish ("I am that I am") world there is misunderstanding, hostility, warfare. Wisdom gets crushed by Ego.

     

    The Selfish World-View (based in the Ego) did not comprehend the Wisdom of Jesus -- they did comprehend the Will-Based Epistles of Paul, however.

     

    “In the beginning was the Word, and the Word was with God, and the Word was God… All things were made by him… And the light shineth in the darkness and the darkness comprehended it not…”

     

    I am not anti-Paul. Paul was brilliant, in fact. I'm just saying most of today's Christians are followers of Paul's theology. Most of today's Christians, if Jesus returned today as he was 2,000 years ago, would consider him a devil, a traitor, or a hippie, and would support his crucifixion again.
    17 Jan 2012, 02:09 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    Tell that chief aim of unions to Jimmy Hoffa, hasty climbers have sudden falls, nu?
    17 Jan 2012, 03:59 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    Yes, only in the New Book. I use poetic license to marry concepts from the Old and the New Book which I do in order to clarify what I believe was/is the intended idea.

     

    Clearly, New Bookians are going to bristle at the idea that Jesus was married to the Shekinah (the Virgin Moon, from whom he gained his Wisdom.
    18 Jan 2012, 05:54 AM Reply Like
  • Pilot-9
    , contributor
    Comments (519) | Send Message
     
    No wonder our stock and bond markets are going up. CDO anyone?
    15 Jan 2012, 09:27 AM Reply Like
  • Dr. V
    , contributor
    Comments (1179) | Send Message
     
    Ask the mREIT buyers, they love crappy ideas, and high risk......they have bought CDO like products without checking.

     

    Tip: You don't buy stock for dividend. You buy it for:

     

    1) Share price growth value
    2) Voting rights, company control

     

    Dividends are peanuts. Quit getting excited over a lousy 40-60 cent dividend on stocks you own 100 shares in.
    17 Jan 2012, 01:49 AM Reply Like
  • Okeverythingistaken
    , contributor
    Comments (12) | Send Message
     
    Shouldn't they be spending their time dealing with and fixing the underlying cause instead?
    15 Jan 2012, 09:30 AM Reply Like
  • WMARKW
    , contributor
    Comments (10483) | Send Message
     
    Okevery.....HA, HA, HA, HA, HA, HA, HA.....LOL.....Rolling over. Are you kidding me, that would then force the banksters to admit they are the worthless criminals they are. Of course the problems should be fixed, but the banksters run the world, and there is no way the politicians will abondon the banking brotherhood....that would end the politicians pipeline to the $$$$$$.
    15 Jan 2012, 03:44 PM Reply Like
  • wyostocks
    , contributor
    Comments (8852) | Send Message
     
    All this just proves that the entire EU has no clue what they doing.
    All they are doing is throwing crap at a wall and waiting to see what sticks.
    Really, no different from what Obama and the Fed are doing in America.
    15 Jan 2012, 10:04 AM Reply Like
  • Fueled By Randomness
    , contributor
    Comments (292) | Send Message
     
    This is a typical politician's response to a problem. If something happens which you don't agree with, outlaw it. If something you think should happen doesn't happen, subsidize it. And when all your meddling has produced an even bigger mess than the one you started with, blame the opposition, ambiguous "dark forces" or other countries and DEMAND MORE POWER!
    15 Jan 2012, 10:19 AM Reply Like
  • wyostocks
    , contributor
    Comments (8852) | Send Message
     
    It's that damned Right Wing Conspiracy doing it again.
    15 Jan 2012, 10:37 AM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    The Right Wing Conspiracy drove the train over the cliff. Now the Left Wing Conspiracy is trying to pretend that the train is NOT going to eventually hit the ground.
    15 Jan 2012, 12:57 PM Reply Like
  • Jeff Spiller
    , contributor
    Comments (23) | Send Message
     
    So what she is saying is that the large institutional investors that world governments (a.k.a taxpayers) spend billions bailing out, in part because they bought risky investments, should be forced to hold risky investments.
    15 Jan 2012, 10:20 AM Reply Like
  • tclark13
    , contributor
    Comments (136) | Send Message
     
    Where I come from if you can't sell it, you don't buy it. I assume the next legislation after prohibiting selling this garbage will be to force the institutions to buy it!
    15 Jan 2012, 10:47 AM Reply Like
  • bigbenorr
    , contributor
    Comments (915) | Send Message
     
    unless they just skip to the end and nationalize everything.....
    15 Jan 2012, 11:55 AM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (525) | Send Message
     
    Nobody should be allowed to sell anything for less than they paid for it.

     

    That should put some confidence back into the market
    15 Jan 2012, 10:52 AM Reply Like
  • Econdoc
    , contributor
    Comments (2944) | Send Message
     
    you a right. the best way to get people to buy something is to tell them they may not be allowed to sell it if things change.

     

    what a pack of idiots. there is no other word for these people. they cannot help themselves.

     

    E
    15 Jan 2012, 11:27 AM Reply Like
  • WMARKW
    , contributor
    Comments (10483) | Send Message
     
    Econdoc....you are spot on. And if I were S&P, my response would be to automatically knock the ratings of every EU sovereign nation down a notch just to reflect that idiocy.
    15 Jan 2012, 03:47 PM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (4143) | Send Message
     
    "Econdoc....you are spot on. And if I were S&P" etc.

     

    Except that it never happened. Just a mistranslation. See below.
    15 Jan 2012, 04:11 PM Reply Like
  • FrannyR
    , contributor
    Comments (20) | Send Message
     
    Oh dear, this whole kerfuffle is based on a bad translation.
    15 Jan 2012, 11:04 AM Reply Like
  • Adjusted Return
    , contributor
    Comments (378) | Send Message
     
    FrannyR, I'm not sure if your comment is sarcastic (as so many comments here are) but bad translation is indeed the case - and a simply sad FT mistake. If you're actually interested you can read the actually accurate FT Deutschland version - http://bit.ly/xsZIF6.

     

    This is nothing else than suggestions - that have often been put forward in the past - to modify regulatory and legal texts that contain ratings thresholds. That means that downgrades wouldn't automatically result in institutional investors HAVING TO sell and would avoid automatic pro-cyclical consequences.

     

    For an excellent discussion of how rating agencies became powerful through, among other things, the inclusion of ratings in various frameworks regulating financial institutions, see Frank Partnoy's early 2000 work.
    15 Jan 2012, 11:49 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (4143) | Send Message
     
    Oh...thank goodness...you're right!

     

    Mit einer Gesetzesänderung will die CDU die Folgen einer Herabstufung durch eine Ratingagentur begrenzen. Versicherungen und Banken müssten sich unabhängig vom Urteil der Bonitätswächter machen und eigene Beurteilungen von Anlagen vornehmen, sagte der stellvertretende Vorsitzende der Unionsfraktion Michael Meister bei der Vorstandsklausur der CDU in Kiel....
    Kanzlerin Angela Merkel (CDU) begrüßte den Vorschlag. "Das ist schon einen Gedanken wert", sagte sie in Kiel. Die strikten Regeln würden einen "sich selbst verstärkenden Effekt" auslösen. "Deshalb sei es sehr wertvoll, "sich das mal anzuschauen und zu überlegen, wo man gegebenenfalls Gesetzesänderungen machen könnte", sagte Merkel.

     

    Synopsis:

     

    Michael Meister of the CDU proposes that insurers and banks not be constrained by the opinions of ratings agencies. They should be able to make independent determinations. (There'd have to be a change in some law somewhere for that to be possible.)

     

    Merkel says, yeah that makes sense. Good idea.

     

    Worth noting:
    Later in the same article, Merkel says the ratings agencies aren't taking into account that Germany will need to do more than the other nations. This seems rather significant to me.

     

    ("Sie rechne auch nicht damit, dass durch die Herabstufung Deutschland beim Rettungsschirm mehr tun müsse als andere Länder.")
    15 Jan 2012, 12:44 PM Reply Like
  • Tack
    , contributor
    Comments (14286) | Send Message
     
    These bad translations wouldn't happen to be associated with folks with short-side agendas? Naaaa.....
    15 Jan 2012, 03:05 PM Reply Like
  • WMARKW
    , contributor
    Comments (10483) | Send Message
     
    Well, then if they are not constrained to sell, perhaps they should be constrained to "MARK - TO - MARKET". Oh, sorry, when not constrained to sell, there would be no market, thus the balance sheet becomes un-knowable.
    15 Jan 2012, 03:51 PM Reply Like
  • Pilot-9
    , contributor
    Comments (519) | Send Message
     
    Ahh wienerschnitzel, ein translation error eh?
    15 Jan 2012, 11:40 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (4143) | Send Message
     
    Great way to sabotage the next round of debt auctions!
    15 Jan 2012, 11:56 AM Reply Like
  • cynic2011
    , contributor
    Comments (652) | Send Message
     
    Maybe Angela's husband is short the bund.
    15 Jan 2012, 11:59 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (4143) | Send Message
     
    Funny...Cantor allusion. Unfortunately I posted my snide comment before realizing this is a mistranslation.
    15 Jan 2012, 12:49 PM Reply Like
  • SeeNoEvilHearNoEvil
    , contributor
    Comment (1) | Send Message
     
    Great and so since banning short sales has worked so well Right !
    15 Jan 2012, 12:39 PM Reply Like
  • swissfrank
    , contributor
    Comments (517) | Send Message
     
    I don't know if this story has been taken from the FT. It sounds like it.

     

    There was a HUGE translation error in the FT. The real story (as the German language original made clear) is that Merkel is thinking about ALLOWING insurance companies to BUY bonds which fall below AAA. The current position is that German insurance companies may not buy such.

     

    The whole point was that Merkel was responding to the S&P downgrades by saying, well, OK, it's happened. We could respond by easing the restrictive policy we have and let the insurer buy, say, Austrian or French stuff even though it is no longer AAA.

     

    ... Apologies, Adjusted Return (above). I see that you've got to the truth of this before me.
    15 Jan 2012, 12:47 PM Reply Like
  • nasdaq99
    , contributor
    Comments (114) | Send Message
     
    I guess it doesn't matter that policy holders signed on expecting that their policy was backed by AAA paper? Let's see, i'm about to buy insurance for my family...will i sign with the AAA guys or the BB guys.....who's assets can trade down to 50-40-30 cents on the dollar/euro....hmmmm. Slippery slope that the credit ratings seek to avoid. In fact it's quite a brainless utterance.
    15 Jan 2012, 03:56 PM Reply Like
  • SA reader
    , contributor
    Comments (176) | Send Message
     
    This is going to absolutely send Eurozone bond yields soaring since everyone will be selling these things. Horrible idea to even mention it. I guess they want to send us all into a recession after all.
    15 Jan 2012, 05:40 PM Reply Like
  • minecanary
    , contributor
    Comments (740) | Send Message
     
    The law will be pointless. Anyone silly enough not to sell tomorrow before they can pass such a stupid law deserves to lose their money. Look out below.
    15 Jan 2012, 08:41 PM Reply Like
  • 867046
    , contributor
    Comments (398) | Send Message
     
    One issue with Merkel's suggestion would be that companies would go for the BB paper to maximize profits or lower costs. Ultimately this is another kind of socialism, the corporate kind, which would increase the already large amount of financial engineering and opacity found in corporate financial statements.
    15 Jan 2012, 11:59 PM Reply Like
  • Michael Clark
    , contributor
    Comments (10173) | Send Message
     
    86: Corporate socialism is fine with our anti-socialists. They'd rather give their tax money to billionaires than to help fund a system of health-care that doesn't bankrupt anyone who really needs it.

     

    Long live enlightened conservatism!
    16 Jan 2012, 12:43 AM Reply Like
  • JohnBinTN
    , contributor
    Comments (2666) | Send Message
     
    I consider myself an "anti-socialist", and I disagree with both giving tax money to billionaires AND a government-run health care scheme.
    16 Jan 2012, 05:58 PM Reply Like
  • realornot
    , contributor
    Comments (1281) | Send Message
     
    At the end, all bonds become worthless so no selling is needed!

     

    hold on to your junks!

     

    r/n
    16 Jan 2012, 12:51 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs