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5/20/2010

Time to arrest the big fund managers for treason

I just read this from the Telegraph. From Telegraph “Germany’s ‘desperate’ short ban triggers capital flight to Switzerland” A year ago, Germany’s financial regulator BaFin warned that the toxic debts of the country’s banks would blow up “like a grenade” once hidden losses from the credit crisis caught up with them. An internal memo at the time showed that BaFin feared write-offs might top 800bn (£688bn), twice the reserves of Germany’s financial institutions. Nobody paid much attention. But the regulator’s shock move on Tuesday night to stop short trading on banks, insurers, eurozone bonds as well as a ban credit default swaps (CDS) on sovereign debt has left markets wondering whether the slow fuse on Germany’s banking system has finally detonated. BaFin spoke of “extraordinary volatility” and said CDS moves were jeopardising “the stability of the financial system as a whole”. It is unsettling that the BaFin should opt for such drastic measures a week after EU leaders thought they had overawed markets with a 750bn rescue package and direct purchases of Greek, Portuguese and Spanish debt by the European Central Bank. BaFin’s heavy-handed move seems to proclaim that the rescue has failed.... The big fund managers think they are very smart in shorting the Euro or any stocks or currencies in a big way to make money. Such action is an equivalent to a run on the banks. It is a deliberate attempt in creating fear which could precipitate into a crisis while govts and regulators are trying to solve the problem. Those involved in such activities should be arrested for treason. The sentiment in the stock market is now so bad that everyone is staying out. The cumulative actions of the big speculators will destroy the world's financial system if not put to a stop. They are criminals!

14 comments:

Anonymous said...

Oh, there are celebrating the arrival of more hedge funds into Asia. When Europe and America are trying to contain the damage of these big crooks, Asia is welcoming them and rolling out the red carpets.

Are Asians that stupid?

Chua Chin Leng aka redbean said...

When Goh Keng Swee invited the MNCs into Jurong, he knew that they were here to make money. But at least they made their money elsewhere by exporting their products. And provide jobs, paid for the infrastructure and local services provided to them.

The funds came here, paid for some services, provided a few jobs, buy made their money from the local investors, bringing them to the cleaners. What is the net gain, to the country and to the funds?

Speedwing said...

Bubbles, bubbles everywhere. Lets wait and see which one will pop first. Singapore has welcomed many hedge fund providers. It is good for the country and the economy on the whole. GDP will be into double figures soon. I suggest you start investing Redbean, make sure you don't miss the boat.

Matilah_Singapura said...

Those arsehole European welfare states need to die lah.

They fucking borrowed money to do all sorts of shit – no one can spend more than they are able to produce, and no one can spend money as if there was no tomorrow.

Paulson and other smart people simply used the system in place – making unrepayable debt into “assets”.. Your constant “argument from evil” is a weak position. You are blaming human nature – there is no solution to that.

Chua Chin Leng aka redbean said...

Two wrongs don't make a right. They may be welfare states. But no one shall allow the big funds to do whatever they want to destroy the values of stocks and currencies for their own benefits.

You said it, the Aussies have a system to manage the shortists. But in many stock exchanges the system is a make belief. The killer is the big shorting and not the small shorting by the small individual investors. And they allow the big funds to short at will, providing scrip lending to help them to do it. How crazy can it be?

And the stupid stock owners lend their scrips to the funds to destroy their values for a small commission! Unbeliever! eg the value of their stocks can be sold down by 50% for them to earn 1% commission. Can you beat that?

Chua Chin Leng aka redbean said...

Speed, the best thing to do now is to get out of stocks.

Anonymous said...

They produce nothing, yet they reap the biggest rewards. With the rewards they are able to spend like nobody's business and creating bubbles in every kind of shit they go into.

Who suffers? Those doing donkey work to earn an honest living have to cope with all the increase cost of living through the creation of those bubbles. They have been double slammed. First by losing money on dubious products created by those swindlers and then having to cope with increases in every thing which they can ill afford.

And to think that some people are inviting these swindlers here to continue the carnage.

What a sad world this is turning into.

Anonymous said...

To anon 6.24, the Singapore govt has opened the immigration door wide open to mwelcome all sorts of speculators. As long as they have cash they can come and make more cash. The ultimate losers are the poor Singaporeans. Don't worry GE is coming and soon the angpows will be distributed to compensate for your loss. Remember to mark your X in the correct place, ie if you get a chance to draw that X.

Anonymous said...

The World is full of crooked talents.
Crafty successful entrepreneurs pry on fellowmen to make themselves even more FILTHY Rich. AND SOME GOVERNMENTS ARE MAKING MONIES FROM THEIR PEOPLE.

And the ambition of power crazy men such as one in Thailand now has caused huge damages to the Nation he administers. His leadership has came about under suspicious circumstances and the turmoils that resulted from his leadership is not unexpected.

Then his military forces makes a greater blunder under his guidance for taking his side when they are supposed to be neutral and not meddle in politics.

And the Head of the United Nation must take the cake for coming out to make some useless noises after live were lost and maimed when his duty is/was to prevent any.

No wonder, a young man in SIN who appeared in Ch U Programme hosted by Quan Yi Fong, when asked what wish he has, answered that he wants to wipe out mankind. He certainly has a good understanding of the SICK WORLD.

patriot

Chua Chin Leng aka redbean said...

I will write a follow up article on this mess called 'The twisted logic of high finance.'

Anonymous said...

One power hungry man jeopardize the wellbeings of his nation for a long time to come.

And

yet he is not able to understand and know his deeds.

May his people bring him to justice soon.

Matilah_Singapura said...

Aiyah folks, speculators make a much better market in terms of keeping trading volumes up and ensuring liquidity. Speculators lose money too – most of them do, most of the time. To me – the more speculation, the better.

Redbean’s argumanet, is as usual fatuous: the idea to to go short or long is to make a prediction to make lovely sexy money. Govts borrow like there is no tomorrow and spend more and more. They issue all sorts of “IOUs” and even encourage the creation of derivatives from those IOU’s.

Speculators smell blood – there’s a buck to be made because someone is attempting to break basic laws of the universe: “you cannot eat more than you can earn”. So they “tekan” the govt in the market.

The govt – who was wrong all along, and even behaving “immorally” – is the first to the microphone and quickly blames “greed” of speculators for tanking the market. The fact was they, the govt, destroyed the assets in the first place.

The shorting of the Euro is likely to continue for awhile, and I’ll be cheering it’s demise.

To add a comment to the Aussie bourses: the Aust govt has been hammered in the market before – especially the bond and currency markets when they’ve over-borrowed and spent like drunken sailors. At the moment the markets are punishing Aust’s currency and equities for stupid govt decisions to tax the fuck out of our miners.

Thank goodness for bourses – sure there are shenanigans going on – where there’s big money, you are going to get “fun and games”… but for the most part markets help moderate the actions of the state.

Chua Chin Leng aka redbean said...

We need speculators. More important we need a level playing field. If the speculators are having unfair advantage over the small investors, the latter have the right to demand fairness.

Any regulator putting up an unfair system is cheating the small investors. And this is also against fair trading acts and the rules and regulations of trading.

Anonymous said...

And the Regulators and Regulating Bodies are set up and run by GOVERNMENTS???

???????

patriot