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Politics : View from the Center and Left

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To: TimF who wrote (85324)	9/18/2008 4:32:31 PM
From: Katelew	Read Replies (2) of 541944

I think I've explained it as best I can, and your responses suggests you are understanding at least how it could happen, even tho you want to reject that it did happen. I'll close down this topic by saying this. There's billions and billions of speculative monies in the world (called "hot" money) always circulating looking for the next opportunity to profit. I'm not passing judgment since I speculate, too. I'm just saying this is what is. This money will get in early, run a price up or down, and wait until the trend pulls in all the other less sophisticated investors. Then it leaves and goes on to something else. You may get a better understanding if you now pay attention to the unfolding drama regarding the role of short-selling, esp. naked short-selling, in bringing down many of the financial names. One of their games has been to buy the CDS of a firm thus giving themselves insurance against that firm defaulting on it obligations. Then that firm would be targeted by shortsellers, most likely in collusion with each other, i.e. more than one hedge fund working together like a pack of jackels. This process would be like me taking out a life insurance policy on a perfect stranger and then killing them in order to collect. It's legal for these funds to purchase the CDS and legal to short, but not really ethical and certainly destructive to the target firm and the stock market as a whole. The role of naked short selling in the market is now becoming the topic du jour, so study this and maybe you'll see why the actions of excess speculation in commodities this year was so obvious to people like me who've been in the markets forever and worked for Wall St. firms.

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