glassbox

A Solution for the Bad Asset Pricing Problem

Hi Tom! I completely agree with you that those who have made money shorting stocks and deploying destructive practices have withheld capital. In fact, I'm of the opinion that all shareholders (and regulators will have to be the initial sponsor of this movement) should impose a much higher cost of borrowing scrips for shortsellers.

In my opinion, short selling in the current environment is highly lucrative - only because it cost so little to borrow and there is no need for one with a short position to disclose his position (with the excuse that it would make it unprofitable for hedge fund managers and the likes to do their research - what an excuse!). In times like these, capital should be deployed constructively, not destructively.

The US government should not allow the same hedge fund managers who made tonnes of money so called 'cleverly' shorting stocks and buying CDS that created this huge imbalance and putting jobs and stability at risk to be allowed to buy anything at the distressed prices they want.

I firmly believe money should only be made, and cleanly made by creating value, real value that comes in hard work, belief and faith and resilence...not by exploiting a market abberation or inefficiency that these 'intelligent' people know that by doing so, will result in a depression like scenario.



On Feb 09 07:21 AM Tom Armistead wrote:

> This is a bad proposal.
>
> For over a year, those who expect to profit from the destruction
> of the US economy have spread news of doom and gloom, shorted finaincial
> stocks into oblivion, spread rumors and manipulated CDS spreads.
> Meanwhile they have withheld their capital from constructive uses,
> in the expectation of gorging on the proceeds of fire sales.
>
> I am at a loss to understand why the US Government should spend taxpayer
> money to line the pockets of these vultures by agreeing to fund their
> feast.
>
> Better to deprive them of their prey by creating a fair price for
> these assets, many of which are worth far more than what the market
> will pay. I am a small time investor and I can't see why the hedge
> funds should be funded to buy AAA debt at distressed prices. It's
> not supposed to work that way.
>
>
>