dagblog - Comments for " Everything You Wanted to Know About the Tri-Party Repo Market but Didn't Know to Ask"

Sigh...this is true. Far too

cmaukonen — Tue, 12 Apr 2011 18:43:50 +0000

In reply to Maybe because the methods and

Sigh...this is true. Far too many people looking for short term/immediate profits rather than long term.

And as Hawkeye in MASH said "I don't think we remember the bad stuff as well as well think we do."

In the distant (and no so distant) past we quite often had only one shot at screwing up. No we have a large number and don't seem to learn much from it.

Maybe because the methods and

EmmaZahn — Tue, 12 Apr 2011 17:18:40 +0000

In reply to Why does this sound so much

Maybe because the methods and means of finance can be used for evil as well as good?

A 'pool' can be as innocent as co-workers buying a lottery ticket together or as nefarious as the one described at your link as "any conspiracy using manipulative tactics to make a profit'. What makes a 'pool' good or evil is the character of the people in it.

I doubt that there is any other industry or sector whose employees face greater moral temptations to their honesty than finance. Many succumb. Most do not because long-term success in finance requires a degree of honesty and honor to instill trust in counterparties.

Diminishing levels of trust within the tri-party repo market community is what, imo, caused the recent crash just like what happened before when too many in the industry forgot the befores.

We always forget the befores and have to learn it all again.

Why does this sound so much

cmaukonen — Tue, 12 Apr 2011 16:10:17 +0000

In reply to Everything You Wanted to Know About the Tri-Party Repo Market but Didn't Know to Ask

Why does this sound so much like this to me ?

One of the main factors the Pecora Commission cited as a possible cause for the 1929 crash was the wide range of abusive practices on the part of banks and bank affiliates... these abusive practices included a variety of conflicts of interest such as the underwriting of unsound securities in order to pay off bad bank loans as well as "pool operations" to support the price of bank stocks...

http://dailypaul.com/63202/major-stock-market-crash-ahead-comparing-1929-to-2008

Or this.

“Wash sale” refers to trades between colluding parties at the same price to increase trading volume or create the appearance of activity, and interest, in a stock. A “corner” refers to a concentration of ownership, often intentional, in an issue that permits the shareholders to control the issue’s price. Typically, an investor or pool would purchase shares in an illiquid issue and, then, after driving the price up force short sellers to cover their positions at a loss.

A “pool” refers to any conspiracy using manipulative tactics to make a profit. Typically, a pool would accumulate a position, create the appearance of activity, manufacture favorable publicity, and, then, as the price rose, distribute its stock to the public.

http://hubpages.com/hub/Beginners-Guide-to-Financial-Markets-Trade-Clearing-and-Trade-Settlements