pairsarb's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/267393/comments http://seekingalpha.com/article/96770-a-trader-reflects-on-a-scary-week?source=feed#comment-261975 261975
Last week didn't seem about "stability," but more about panic. The artificial floors the two men in question attempt block the markets from trading where they truly need to in order to weed out the sick and weak companies. Ban on short selling....ridiculous. Today those same financial dropped arguably more than in history as a group, reflecting in the short term the true demand for these companies. Certain market makers did not perform their duties today because of the short sale ban, and they were well within their rights as their own power was breached because of this ban. The markets are there to reveal true price. The actions of Paulson and Bernake should have been worded "in the efforts to avert true price discovery because we don't like the prices being discovered....."

The long bias this author has clearly puts him in favor of these rescue attempts. We are not talking fires and neighbors lives here, we are talking about money. There are no lives lost if insolvent companies die in a financial fire. There may be a period of panic, but the new and existing strong models will grow through the ashes of the dead models.

Any attempt to delay the important initial pain and suffering lengthens the time to healthy recovery. It's unfortunate for the long term that those who have been unthinkingly indoctrinated to be biased on the long side unconditionally have the power and means to delay important financial purging. If the author wants to use a better fire analogy, look to nature. Natural burns preserve and renew. It's only when these natural burns are prevented by man that we have catastrophic wild fires that are far worse than nature, by itself, could have engineered.

]]> Mon, 22 Sep 2008 19:11:14 -0400
Last week didn't seem about "stability," but more about panic. The artificial floors the two men in question attempt block the markets from trading where they truly need to in order to weed out the sick and weak companies. Ban on short selling....ridiculous. Today those same financial dropped arguably more than in history as a group, reflecting in the short term the true demand for these companies. Certain market makers did not perform their duties today because of the short sale ban, and they were well within their rights as their own power was breached because of this ban. The markets are there to reveal true price. The actions of Paulson and Bernake should have been worded "in the efforts to avert true price discovery because we don't like the prices being discovered....."

The long bias this author has clearly puts him in favor of these rescue attempts. We are not talking fires and neighbors lives here, we are talking about money. There are no lives lost if insolvent companies die in a financial fire. There may be a period of panic, but the new and existing strong models will grow through the ashes of the dead models.

Any attempt to delay the important initial pain and suffering lengthens the time to healthy recovery. It's unfortunate for the long term that those who have been unthinkingly indoctrinated to be biased on the long side unconditionally have the power and means to delay important financial purging. If the author wants to use a better fire analogy, look to nature. Natural burns preserve and renew. It's only when these natural burns are prevented by man that we have catastrophic wild fires that are far worse than nature, by itself, could have engineered.

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