Germany said “auf Wiedersehen” to naked short selling, but it appears the ban is doing nothing but raising fears that Europe is in the midst of a financial crisis of its own. Traders are already clamoring to close out open positions, but who knows if the ban will really prevent a financial calamity.
Germany’s BaFin financial services regulator said it instituted the ban because “exceptional volatility” in euro-area government bonds and credit-default swaps, massive short-selling was leading to excessive price movements which “could endanger the stability of the entire financial system.”
The ban on naked short-selling of CDS and European government bonds takes place starting at midnight on lasts until March 31, 2011. It also applies to naked short-selling in shares of 10 banks and insurers.
They include: Aareal Bank AG, Commerzbank AG, Deutsche Bank AG and Deutsche Postbank AG, insurer Allianz SE; reinsurers Hannover Re AG and Munich Re AG; Generali Deutschland Holding AG, MLP AG, and Frankfurt stock exchange operator Deutsche Boerse AG.
senseless to short commerzbank. there´s no value below nil.
So buying a German CDS risk against a basket of French, Dutch and Swiss risk… is verboten!! SPERZIBOZEN!!!
Isn’t naked short selling already supposed to be illegal? Yes. If you don’t borrow shares, and you have no intentions on buying them back, then it is illegal. Naked short selling is used by many hedge funds and off shore entities to destroy stocks by taking away their ability to raise capital and create a stable stock price environement. I use MicroCapReports to find which stocks are safe from massive dilutioin scams, because those often work hand in hand with NSS
The way i interpret it is that Germans are prejudice of people with short penis.Yes, Germany bans men going naked with short “sell”.
-Airhead
hmm…. the overseas market are off 2% on average this morning…..failure.
Can still short the index… now all we need is to find the volume and liquidty to take out the DAX… that’ll learn ‘em.
- hedgie with a heart set on revenge.
@6 – ditto. also, are the krauts going to delist from NY and London? No passaran! Venceremos!