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A reverse short bubble is forming!

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barry_1
Super Contributor
According to CNN-Money ,people are shorting everything and anything!....First i've ever heard of it,is there such a thing,or are they whistling in the wind,with this comment?....Opinions SimonPB,Chartist,John,DST,YNWA or any other trader?
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17 REPLIES 17
john_1
Super Contributor
Barry the effect of to many shorts is an interesting one, but ultimitly it serves as an underpin as for every short there has got to be a buy to exit that possition, so the effects is large violent rallies ( like friday) when shorts get nervous and cover. Volitility is the name of the game.
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john_1
Super Contributor
The implication of that kind of article is ..if everybody is doing the same then nobody is thinking...that said we are staring down the barrel of more large fincacial failures and no bale out by the feds. I think the best way to go about it is index shorts vs individual shares as there is much higher levels of liquidity should you need to exit.
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YNWA
Super Contributor
Keep ye powder dry LongTom......commercial property tsunami hasn't started yet, worse scenario than residential....UN will not be dropping financial aid packages either.....Chinese holders of US govt. script haven't even started messing with the Yanks yet (already the Koreans bailed out of the deal...Chinese torture???).....keep them Zeiss Noculars trained to horizon.....keep your powder dry & your finger of fate light on the triggers BMan. Adios
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barry_1
Super Contributor
thanks John for a bit more clarity,i think!....seems u dont think its a bubble then YNWA?
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platsak
Super Contributor
Why would there be a tsunami in commercial property. Surely the SA commercial properties are better geared than youre average residential property speculators portfolio. Barry. Youe a property man. Whats youre take on this.
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john_1
Super Contributor
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barry_1
Super Contributor
yes i was referring to the US market....as far as our local market goes ,commeriial ,retail and indusrtial are the best buys that one can make at the moment as long as there is no increase in the bank rate.
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Brazen
Super Contributor
I'm with Y on keeping your powder dry. Question is, have you got the patience to just do nothing. Hard for me.
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YNWA
Super Contributor
...one stitch plain one stitch pearl...or...perlé?
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Brazen
Super Contributor
You, and your entire herd, will have scarves next winter! And you can drink and knit. Cheers!
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YNWA
Super Contributor
...millie asked for hers to be in pink chinchilla with Cold Duck please
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YNWA
Super Contributor
Barry, I found this article which might stimulate a bit more research. What is interesting is that a run on the Fed is getting more exposure, not in the mainstream media as they are the RA' RA' boys of the US. Even more pertinent is the comment to the article by "Bob" on the forum. As for property, nobody is saying a word about the commercial property problems in the US & apparently they are severe. This is not Joe Soaps backyard...this is the heart of Corporate America. Best property investment destinations: Beijing, Moscow, Gulf States & the Adriatic Coast...."Big Risk: Surging Debt Makes U.S. More Dependent on China, Russia, Gulf States Posted Sep 15, 2008 12:07pm EDT by Aaron Task..... The demise of Lehman Brothers, Merrill Lynch, and Bear Stearns this year has investors contemplating the long-term outlook for other once-venerable institutions, including Dow members Citigroup, AIG and Bank of America. But there's an even bigger financial institution with greater debt and an increasing level of bad loans on its books: The U.S. government. Given the actions already taken, from the Housing Bill to the nationalization of Fannie Mae and Freddie Mac, the U.S. deficit could double to $800 billion in two years, says Nouriel Roubini, of NYU's Stern School and RGE Monitor. (Even worse, the official government deficit figures exclude the costs of the wars in Iraq and Afghanistan, as well as the unfunded liabilities of Social Security and Medicare.) The big risk is that foreign holders of Treasuries will no longer accept low interest rates to help fund U.S. debt spending, says Roubini, noting countries like China, Russia and oil-producing nations in the Middle East have becoming increasingly important holders of Treasuries. Should they demand higher rates to hold U.S. debt or, worse, dump their holdings, it could have profound ramifications on the U.S. economy and the value of the dollar. Roubini further notes the Federal Reserve has put its balance sheet -- and independence -- at risk via its intimate involvement in thus-far failed attempts to stem the crisis. It's tempting to dismiss the notion of a "run" on the U.S. government as unthinkable and some bears have been warning for years, even decades, about such a worst-case scenario. But after the events of this weekend, much less the past six months, it's clear that (almost) anything is possible and no scenario too "outrageous" to seriously contemplate."..............Bob - Monday September 15, 2008 12:20PM EDTTake this a step further, these countries holding US debt can use it as leverage on foreign policy. China invades Taiwan. Middle East war involving Israel. They could easily say to the US "stay out or we dump your Treasury debt and destroy your economy". And we thought oil dependence was a national security issue."
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Not applicable
Ola amigo...seems tis the times for J&J to stand tall. Be careful of 2.30pm today.......last bullet in Bonehead's chamber.....goldman sachs. Me thinks money that was going to save Lehman will be instead used to shore up Goldie's book causing a viscious uptick.adios...
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barry_1
Super Contributor
My late father ,died in 1982 a bank clerk ,was then worried about the US debt,said that their monetary position was untenable and it would have an effect on the world,everyone laughed at him and thought it was senile demetia coming on!Thanks i'll look into it.
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barry_1
Super Contributor
ps my father died in 1992! now looks like i'm sufferin from S dementia!!!!!1
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_nova
Super Contributor
Probably obvious to all but it's noteworthy that this morning the DAX broke below 6000, the FTSE is just above 5000 at 5100, and the TOP40 broke through 23000. Finally the DOW at below 11000. Forget the bear, it's the Bear Raiders who are now in charge. We're going to see volatility like never before
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YNWA
Super Contributor
OK......Barclays has now come out and said it! They specified that they would not touch the toxic $40bn commercial property paper of Lehmans.
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