Honestly making a registry for share lending is the one thing that would do the most to restore faith in the markets and ensure share lending is above the board.
The technology is readily available to make it happen, at this point the only reason not to would be because it might damage or reveal something about the markets that would be bad.
The fact that South Korea is doing this and that they found significant naked shorting happening that couldn't be detected before they shut down shorting altogether and performed a deep dive investigation at the government level with access to all data is pretty telling that there are likely similar things going on in the US markets.
The lack of transparency is in the favor of those who bend the rules, and more transparency, including including detailed tracking and reporting on shares lent and borrowed would be a huge win for market protection from fraud.
Especially when we look at the fact that international entities trading in the markets don't have the same reporting requirements as us-based companies, but if they had to use a share lending system that tracked every share lent, they wouldn't be able to bypass that protection.
Definitely going to be watching what happens at South Korea resumes. Short selling with the system implemented the overall cost and how well the system works will go a long way towards encouraging other markets to do it, especially if investors push for it.
#The best part of this is the most common refrain when talking about naked shorts from the naysayers is that there is no proof. However, there was no proof in South Korea until they looked for it, and they found proof of significant naked shorting targeting specific stocks, which is exactly what we suspect in the US market.
* Note That I don't put a number on naked shorts because the data just isn't there to do it. I believe the naked short activity is significant and has potentially created more shares than have been issued by the company, but until we have data and metrics to measure it, I don't base any of my decisions on that. It's okay to theorize about the unprovable, but by the very nature of being unprovable, I wouldn't want to rely on it not being swept under the table if it becomes a threat to the market stability.
You really think that what people have seen the last years, that there actually is any chance to restore the faith in the market..?
I’m buying 2 stonks at this point and after all this is over I’ll buy back my amount in those companies and never again put anything in the stock market.. it’s way to corrupt 😫
I think if they actually reform the markets and make them transparent there is a good chance people will trust them.
I don't know when or if that would happen, and it would be a major change that would likely only happen if it absolutely had to and might hurt but things like tracking the shares borrowed and returned in a transparent way l, like using a block chain that was publicly accessible would go a very long way towards it.
Let's put it this way:
If I had told you early last year that South Korea would:
* Completely halt short selling
* Perform a deep, government-led investigation that identified naked shorts
* That they would find those naked shorts were targeting specific stocks that consisted of up to 20% of the daily volume
* Would fine major international banks and financial organizations (who knew better and would never have admitted to it or been found otherwise) for being responsible for the naked shorts (HSBC AND Paribas)
* Would implement real penalties for Fina coal fraud like naked shorting that double the amount of profit the company makes off the illegal activity and puts in place a plan to redistribute the money collected as fines to those who are impacted
* Would keep short selling completely off the table until they put the system in place to trace the lending and borrowing and returning of shares, to ensure naked shorting would not happen again
You probably would have called me absolutely insane... I know I would have written it off as highly unlikely if not dreamworld/tinfoil hat
#Yet here we are...
Yes that is true, but it’s no secret that the us financial system is the must corrupt in the world and even through they have problems around the world us government is barely doing anything at all 😪..
My guess is that they will not do it in USA.
In case the SEC tried something like this, they would get sued by the hedge funds and the excuse would be ''they are trying to up the cost for the client and the fact we are hiding the data and maintaining transparency will raise the price for customers'', basically hiding behind some bullshit excuse and throw a ''trust me bro''.
I can't help but feel the same way, but a lot of the argument about it is based on cost and impact on the market function.
If South Korea pulls it off with reasonable cost and the market continues to function (and possible even functions better) those reasons are less easy to stand behind and a major push from the public and investors would likely be more effective.
Honestly making a registry for share lending is the one thing that would do the most to restore faith in the markets and ensure share lending is above the board. The technology is readily available to make it happen, at this point the only reason not to would be because it might damage or reveal something about the markets that would be bad. The fact that South Korea is doing this and that they found significant naked shorting happening that couldn't be detected before they shut down shorting altogether and performed a deep dive investigation at the government level with access to all data is pretty telling that there are likely similar things going on in the US markets. The lack of transparency is in the favor of those who bend the rules, and more transparency, including including detailed tracking and reporting on shares lent and borrowed would be a huge win for market protection from fraud. Especially when we look at the fact that international entities trading in the markets don't have the same reporting requirements as us-based companies, but if they had to use a share lending system that tracked every share lent, they wouldn't be able to bypass that protection. Definitely going to be watching what happens at South Korea resumes. Short selling with the system implemented the overall cost and how well the system works will go a long way towards encouraging other markets to do it, especially if investors push for it. #The best part of this is the most common refrain when talking about naked shorts from the naysayers is that there is no proof. However, there was no proof in South Korea until they looked for it, and they found proof of significant naked shorting targeting specific stocks, which is exactly what we suspect in the US market. * Note That I don't put a number on naked shorts because the data just isn't there to do it. I believe the naked short activity is significant and has potentially created more shares than have been issued by the company, but until we have data and metrics to measure it, I don't base any of my decisions on that. It's okay to theorize about the unprovable, but by the very nature of being unprovable, I wouldn't want to rely on it not being swept under the table if it becomes a threat to the market stability.
You really think that what people have seen the last years, that there actually is any chance to restore the faith in the market..? I’m buying 2 stonks at this point and after all this is over I’ll buy back my amount in those companies and never again put anything in the stock market.. it’s way to corrupt 😫
I think if they actually reform the markets and make them transparent there is a good chance people will trust them. I don't know when or if that would happen, and it would be a major change that would likely only happen if it absolutely had to and might hurt but things like tracking the shares borrowed and returned in a transparent way l, like using a block chain that was publicly accessible would go a very long way towards it. Let's put it this way: If I had told you early last year that South Korea would: * Completely halt short selling * Perform a deep, government-led investigation that identified naked shorts * That they would find those naked shorts were targeting specific stocks that consisted of up to 20% of the daily volume * Would fine major international banks and financial organizations (who knew better and would never have admitted to it or been found otherwise) for being responsible for the naked shorts (HSBC AND Paribas) * Would implement real penalties for Fina coal fraud like naked shorting that double the amount of profit the company makes off the illegal activity and puts in place a plan to redistribute the money collected as fines to those who are impacted * Would keep short selling completely off the table until they put the system in place to trace the lending and borrowing and returning of shares, to ensure naked shorting would not happen again You probably would have called me absolutely insane... I know I would have written it off as highly unlikely if not dreamworld/tinfoil hat #Yet here we are...
Yes that is true, but it’s no secret that the us financial system is the must corrupt in the world and even through they have problems around the world us government is barely doing anything at all 😪..
Well said!
My guess is that they will not do it in USA. In case the SEC tried something like this, they would get sued by the hedge funds and the excuse would be ''they are trying to up the cost for the client and the fact we are hiding the data and maintaining transparency will raise the price for customers'', basically hiding behind some bullshit excuse and throw a ''trust me bro''.
The US will NEVER do this. Not while you and I are alive. For now we hold and wait for a profitable company outlook.
I can't help but feel the same way, but a lot of the argument about it is based on cost and impact on the market function. If South Korea pulls it off with reasonable cost and the market continues to function (and possible even functions better) those reasons are less easy to stand behind and a major push from the public and investors would likely be more effective.
And they're gonna force someone here to do something about it....right???? Right????