The FT has kept busy reporting how the International Energy Agency’s decision last week to release 60m barrels of oil reserves has burned some energy traders. In particular, trades based on the relative price differential between Brent crude and Dubai crude have apparently suffered, as the spread between the two has plunged to a six-month low, dropping nearly 50 per cent in just four days apparently. Read more
Blah blah blah, we hate Fitch, blah, speculators boo, blah, from the Greek finance ministry on Friday (via Reuters):
“[The Fitch downgrade] overlooks the additional commitments already undertaken by the Greek government to meet its 2011 fiscal targets and speed up its privatisation programme,” the Finance Ministry said in a statement. Read more
Now — far be it from FT Alphaville to tell the Athens public prosecutor what to do, however…
Greece’s finance ministry has blamed a bank trader’s email for spreading rumours that the country will default this weekend. (We’re going to point out, again, that this timing is utterly silly.) Read more
Details of the European Stability Mechanism, released on Tuesday, promptly sent European peripheral bond yields in a reverse tail spin. As we’ve noted before, the big aim of the ESM is to force the private sector to share in debt losses — which is a nice way of saying it will allow sovereigns to restructure or even (gasp) default once the thing comes into effect after 2013. And in the meantime, there’s lots of talk that Greece or even Ireland, could try to restructure their debt ahead of the 2013 date. Read more
The FT reported on Wednesday that an industry body representing big sugar traders has launched an attack on their high-frequency and algorithmic-based counterparts — along with the New York-based futures exchange that hosts both groups.
The attack came in the form of a letter from the World Sugar Committee to the ICE Futures US exchange. We’ve reprinted it below courtesy of the FT’s Javier Blas. Read more
The world’s top sugar traders have attacked “parasitic” computer traders, criticising the New York-based exchange that hosts the main sugar futures contract for failing to clamp down on their activities, the FT reports. In a strongly worded letter to the ICE Futures US exchange, the chairman of the World Sugar Committee said the presence of high-frequency and algorithmic-based speculative funds “only serves to enrich themselves at the expense of the traditional market users”. The letter is likely to provide ammunition to politicians seeking to clamp down on speculative activity in commodities. Read more
All eyes on the Greek stock market and Hellenic bank shares because Wednesday, September 1, is the day the Hellenic Capital Market Commission’s ban on short-selling of shares listed on the Athens Exchange is set to (finally) end. Prohibition began on April 28, in response to “conditions prevailing in the Greek market” and was extended in June. Although did it actually help, wonders FT Alphaville? Read more
For sure the 2008 financial crisis lingers on in the minds’ of long-only investors, but perhaps it’s surprising to hear the episode scarred the shorts too. And not just because they got banned, scapegoated or squeezed.
Not even death will get in the way of the FSA’s determination to disclose shorts.
The Financial Services Authority — otherwise known as the Britain’s premier zombie financial services regulator — has decided it definitely will be using its remaining powers to ferret out those scurvy short-sellers. Read more
FT Alphaville’s resident germanophone Joseph Cotterill has tracked down the Finanzmärkte Diskussionspapier relating to Germany’s newest and most far-reaching draft law to ban all forms of naked short selling.
A key bit of which may be translated thus: Read more
The federal government wants to ban naked short selling of shares, government bonds in the euro countries and insurance for risks of states in the euro area. Unlike previously planned, but these prohibitions are regulated in a “Law to strengthen the stability of financial markets” and no longer be part of the proposed Investor Protection Act. Read more
Speculators raised their bets against sterling to record levels after the recent UK general election, as worries escalated over the government’s finances, the FT said. Positioning data from the CME, often used as a proxy for hedge fund activity, showed that speculators had extended their bets against sterling from 72,188 contracts to 76,745 contracts, equivalent to $6.9bn, in the week ending May 18.PO Read more
The Greek central bank has been accused of encouraging short-selling in its bonds, reports FT Alphaville. In short, it is suggested that by extending the settlement period for bond trading on its HDAT platform from three days to 10, in late 2009, the bank gave short-sellers more time in which to push down the price of a bond before they had to deliver it. Read more
Germany on Tuesday temporarily banned short selling of debt issued by eurozone countries, according to a statement by the country’s financial services regulator. BaFin cited “extraordinary volatility in debt securities issued by eurozone countries” in its rationale for the move. The ban also extends to so-called ‘naked CDS’ on eurozone debt, and to naked short sales of the shares in ten financial institutions, including Deutsche Bank, Allianz and Commerzbank. The announcement saw the euro slip 1.6 per cent to a fresh 4-year low of $1.2162. Read more
The Federal Financial Supervisory Authority has on Tuesday temporarily banned naked short sales of debt securities issued by eurozone countries for trading on domestic stock exchanges in the regulated market. It has also temporarily banned so-called credit default swaps (CDS) where the reference bond and liability are from a eurozone country, and which does not serve to hedge against default risk (naked CDS). Read more
The chairman of France’s financial regulator, L’Autorité des marchés financiers, seems to be wishing speculative attacks on those European states who declined to support the eurozone bailout at the weekend – most notably Britain. FT Alphaville has the details. Read more
Taking a page from the playbook of their counterparts in Spain and Germany, France’s financial regulators say they intend to use any means necessary to crack down on evil, unpatriotic, rumour-mongering speculators. Read more
Hats off to the Wall Street Journal for delving into the two-facedness of US legislators, at least as far as short selling is concerned.
In a story published on Monday, the Journal reported that “some members of Congress made risky bets with their own money that US stocks or bonds would fall during the financial crisis”. The newspaper conducted its own analysis of congressional disclosures. Read more
Adair Turner is at it again. Having criticised numerous practices in the financial world – among them “socially useless” banks and crazed innovators – Britain’s most senior regulator has a new target in his sights: currency speculators. But currency speculators insist such dealing is needed to help rebalance global economy, according to this FT analysis. Read more
The Hellenic Capital Market Commission, after taking into account the conditions prevailing in the Greek market has decided today to ban short selling of shares listed in the Athens Exchange. The ban becomes effective today 28 April 2010 and remains in force until 28 June 2010. Read more
Add one to the list of Greece CDS-speculator exonerators: Fitch Solutions
The rating agency offshoot has done a study with a slightly different focus; CDS liquidity, a measure of market uncertainty and demand for the credit default swap contracts, as opposed to pure CDS. Read more