Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: Paxb2u who wrote (81163)	9/20/2008 1:01:25 PM
From: Dr. Voodoo	Read Replies (1) of 94695

Pax. SKF uses derivatives to maintain it's 200% tracking of the index. They are not short financials. Now,,, to think this doesn't screw up everybody's mathematical models? No clue what to do. Impossible to predict. I think, there are a lot of people who are going to be adding to their SKF positions next week. Since there are no shorts, and it will take time for people to cover or deliver, I expect next week to be a wild ride. The SEC says they can hold the ban on short sales till well into next month. I think they are going to monitoring the markets to insure that there isn't a repeat of what has happened. I can agree with rules on naked shorting, and I would almost be inclined to believe a significant amount of this caused some of the problems, but banning short sales altogether is bad. I think they just need to figure out how to insure no more shares are traded than what are technically available to borrow at any given point, and allow arbs and market makers to work within this to create spreads that are sensible and fully liquid. V

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