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Paulson won't answer Peak bailout dollar value forcing speculaters to run market.

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Kanigo2 Subscriber

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User ID: 442313
7/15/2008 1:08 PM

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Paulson won't answer Peak bailout dollar value forcing speculaters to run market.

Welcome to the Hunt Brothers remake on our entire Market economy.

Dangerous place to be in right now..

Force and control of large money will force runs on all commodities and financials to yank money out of all investors.

Get your money out of the market now!

They are raping oil at the moment and they are hedging there bets on a dollar amount that they know about on Freddie and Fannie.

Go liquid till the speculators leave!

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Anonymous Coward
User ID: 342843
7/15/2008 1:11 PM

Re: Paulson won't answer Peak bailout dollar value forcing speculaters to run market.	Quote
Can you translate to English, please?

Anonymous Coward
User ID: 373181
7/15/2008 1:12 PM

Re: Paulson won't answer Peak bailout dollar value forcing speculaters to run market.	Quote
yes translation for us yokles that drink floride water please hmmm duhr

Kanigo2 Subscriber

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User ID: 442313
7/15/2008 1:15 PM

Re: Paulson won't answer Peak bailout dollar value forcing speculaters to run market.

Large funds are transferring money to short values and catch quick dollars.

They just dropped oil and are grabbing bank institutions.

They will short those also buy whatever they can quickly make money on leaving small investors in the cold with a loss.

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Anonymous Coward
User ID: 468635
7/15/2008 1:29 PM

Re: Paulson won't answer Peak bailout dollar value forcing speculaters to run market.

Large funds are transferring money to short values and catch quick dollars.

They just dropped oil and are grabbing bank institutions.

They will short those also buy whatever they can quickly make money on leaving small investors in the cold with a loss.

Quoting: Kanigo2

Yeppers, they are running pump and dump on Wamu, Wachovia and Citigroup:

[link to finance.yahoo.com]

Look at the volume. Who wants to bet that at least one of the fine institutions is going tits up on Friday?

Kanigo2 Subscriber

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User ID: 442313
7/15/2008 1:30 PM

Re: Paulson won't answer Peak bailout dollar value forcing speculaters to run market.

Financial speculation involves the buying, holding, selling, and short-selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives, or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. Speculation or agiotage represents one of four market roles in Western financial markets, distinct from hedging, long- or short-term investing, and arbitrage.

Convention, and especially satire, sometimes portray speculators comically as speculating in pork bellies (in which a real market and real speculators exist) and often "losing their shirts" or making a fortune on small market changes. Speculation exists in many such commodities, but, if measured by value, the most important markets deal in futures contracts and other derivatives involving leverage that can transform a small market movement into a huge gain or loss.

Most non-professional traders lose money on speculation, while those who do make money tend to become professionals.[citation needed] Occasionally some dramatic event will occur, such as the effort of the Hunt brothers to corner the silver market or the currency speculations of George Soros or the speculative trading of Nick Leeson, which caused the collapse of Barings Bank.

By some definitions, most long-term investors, even those who buy and hold for decades, may be classified as speculators,[citation needed] excepting only the rare few who are not primarily motivated by eventually selling at a good profit. Some dedicated speculators are distinguished by shorter holding times, the use of leverage, by being willing to take short positions as well as long positions (in markets where the distinction can be reasonably made). A degree of speculation exists in a wide range of financial decisions, from the purchase of a house to a bet on a horse; this is what modern market economists call "ubiquitous speculation."[citation needed]

In Security Analysis, Benjamin Graham gave a definition of speculation in relation to investment: "An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."[citation needed]

The well known speculator Victor Niederhoffer, in "The Speculator as Hero"[1] describes the benefits of speculation:

Let's consider some of the principles that explain the causes of shortages and surpluses and the role of speculators. When a harvest is too small to satisfy consumption at its normal rate, speculators come in, hoping to profit from the scarcity by buying. Their purchases raise the price, thereby checking consumption so that the smaller supply will last longer. Producers encouraged by the high price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant, they sell. This reduces prices, encouraging consumption and exports and helping to reduce the surplus.

Another service provided by speculators to a market is that by risking their own capital in the hope of profit, they add liquidity to the market and make it easier for others to offset risk, including those who may be classified as hedgers and arbitrageurs.

If a certain market - for example, pork bellies - had no speculators, then only producers (hog farmers) and consumers (butchers, etc.) would participate in that market. With fewer players in the market, there would be a larger spread between the current bid and ask price of pork bellies. Any new entrant in the market who wants to either buy or sell pork bellies would be forced to accept an illiquid market and market prices that have a large bid-ask spread or might even find it difficult to find a co-party to buy or sell to. A speculator (e.g. a pork dealer) may exploit the difference in the spread and, in competition with other speculators, reduce the spread, thus creating a more efficient market.

Some side effects

Auctions are a method of squeezing out speculators from a transaction, but they may have their own perverse effects; see winner's curse. The winner's curse is however not very significant to markets with high liquidity for both buyers and sellers, as the auction for selling the product and the auction for buying the product occur simultaneously, and the two prices are separated only by a relatively small spread. This mechanism prevents the winner's curse phenomenon from causing mispricing to any degree greater than the spread.[citation needed]

Speculative purchasing can also create inflationary pressure, causing particular prices to increase above their true value (real value - adjusted for inflation) simply because the speculative purchasing artificially increases the demand. Speculative selling can also have the opposite effect, causing prices to artificially decrease below their true value in a similar fashion. In various situations, price rises due to speculative purchasing cause further speculative purchasing in the hope that the price will continue to rise. This creates a positive feedback loop in which prices rise dramatically above the underlying value or worth of the items. This is known as an economic bubble. Such a period of increasing speculative purchasing is typically followed by one of speculative selling in which the price falls significantly, in extreme cases this may lead to crashes. Overall, the participation of speculators in financial markets tends to be accompanied by significant increase in short-term market volatility. This is not necessarily a bad thing, as heightened level of volatility implies that the market will be able to correct perceived mispricings more rapidly and in a more drastic manner.

If all the Large hedge funds are now speculators we are in for a world of hurt

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"GLP has some batty shit, but yours takes the fucking biscuit "-Disputed-

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Anonymous Coward
User ID: 468635
7/15/2008 1:39 PM

Re: Paulson won't answer Peak bailout dollar value forcing speculaters to run market.

Pertinent to the thread:

Emergency order today: Fannie Freddie must be "pre-borrowed"

Later rule: issues to be addressed across "Entire market"

Here is some detail from bloomberg:

SEC to Order Limits on Short Sales of Fannie, Freddie (Correct)

By Steve Geimann

(Corrects headline to eliminate extra word.)

July 15 (Bloomberg) -- U.S. Securities and Exchange Commission Chairman Christopher Cox said the agency will limit short-sales by primary dealers trading shares of Freddie Mac and Fannie Mae.

Cox told the Senate Banking Committee that an emergency order will be released today, that will subject short sales in both mortgage buyers to a ``preborrowed requirement.''

``In addition to this emergency order, we will undertake a rule making to address the same issues across the entire market,'' Cox said in his remarks to the committee.

Kanigo2 Subscriber

Subscriber

User ID: 442313
7/15/2008 1:47 PM

Re: Paulson won't answer Peak bailout dollar value forcing speculaters to run market.

I would like to point out-- That is only Freddie and Fannie-

The rest of the banks and ALL Commodities are going to get extremely VOLATILE!

This is like a GIANT RAPE of every other investor that doesn't watch the market with an Eagles Eye.

Each Fund is going to try to fight for dominance and a LOT of them will loose.

This is like Cannibalism.

They will eat you too for a snack if you get in the way.

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"GLP has some batty shit, but yours takes the fucking biscuit "-Disputed-

Hurray for Anarchy! This is the happiest moment of my life.

Anonymous Coward
User ID: 468635
7/15/2008 2:04 PM

Re: Paulson won't answer Peak bailout dollar value forcing speculaters to run market.

I would like to point out-- That is only Freddie and Fannie-

The rest of the banks and ALL Commodities are going to get extremely VOLATILE!

This is like a GIANT RAPE of every other investor that doesn't watch the market with an Eagles Eye.

Each Fund is going to try to fight for dominance and a LOT of them will loose.

This is like Cannibalism.

They will eat you too for a snack if you get in the way.

Quoting: Kanigo2

SEC wants to outlaw all naked shorts across the board.....which is kind of funny because naked shorting is already against SEC regs.....just not enforced. How are they going to enforce the new reg, if they couldn't enforce the old reg?

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